^v 


w 


UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 


SCHOOL  OF  LAW 
LIBRARY 

Gift  of 
John  Adams 


Wrn.  J.  Jy/r/ipafrick. 


A   TREATISE 


ox    THE 


mCORPOEATIO^^  AXD   ORGAKIZATIOX 
OF   CORPORATIONS 


Digitized  by  the  Internet  Archive 

in  2008  with  funding  from 

IVIicrosoft  Corporation 


http://www.archive.org/details/frostincorporatiOOfros 


A    TREATISE 


ox    THE 


INCORPORATION  AND  ORGANIZATION 


OF 


CORPORATIONS 

CREATED  UXDER  THE  "BUSINESS  CORPORATION  ACTS" 

OF  THE  SEVERAL  STATES  AND  TERRITORIES 

OF  THE  UNITED  STATES 


Including  therein  a  Synopsis-Digest  of  the  General  Incorporation  Acts 

of  the  several  commonwealths,  avith  decisions  bearing  thereon; 

ALSO,  Forms  for  drawing  Charters  cnder  the  Laws  of  the 

SEVERAL    States    and    Territories  ;    General    and 

Specific  Object   Clauses   for  insertion   in 

Charters  ;  By-Laws,  Minutes,  etc.,  etc. 


BY 

THOMAS    GOLD   FROST,  LL.D.,  Ph.D. 

OF  THE  NEW   YORK  BAR 

Author  of  "  Treatise  on  Guaranty  Insurance,"  "  The  French 
Constitution  of  1793,"  etc. 


Wm.  J.  Kir/cpatrick. 


BOSTON 
LITTLE,  BROWN,  AND   COMPANY 

1005 


Copyright,  1905, 
Bv  Little,  Brown,  and  Company, 


All  rii^hts  reserved. 


T 


THE    UXIVEKSITY    ]^KESS.    GAMBKIDGE,    U.  8.  A. 

T 


TO 

JOHN    B.    BROWN,  Esq. 

OF    THE    ILLINOIS    BAR 

THIS    WORK    IS    DEDICATED    BY    HIS    FRIEND,   COLLEGE    CLASSMATE 

AXD    FIRST    LAW    PARTNER 

THE  AUTHOR 


PREFACE 

The  present  work  might  with  no  inconsiderable  degree  of  fitness 
have  been  entitled  "  A  Treatise  on  Comparative  Incorporation 
Law  in  the  Several  Commonwealths  of  the  United  States."  Such 
a  work  if  properly  prepared  should  not  fail  to  interest  the  active 
practitioner  as  well  as  the  public  at  large.  One  of  the  greatest 
difficulties  met  with  in  the  preparation  of  the  volume  here  pre- 
sented, has  been  to  successfully  condense  the  subject  matter  thereof 
without  eliminating  any  matters  of  real  importance.  If,  in  place 
of  the  customary  copious  references  so  freely  offered  in  support 
of  principles  of  corporation  law  universally  considered  to  be 
sound,  the  reader  finds  only  a  single  citation,  he  may  rest  assured 
that  careful  investigation  has  satisfied  the  author  that  it  repre- 
sents the  prevailing  doctrine  relative  to  tlie  particular  proposition 
in  support.of  wliich  it  has  been  cited.  This  method,  it  is  believed, 
will  meet  with  favor  at  the  hands  of  the  profession  for  the  follow- 
ing reasons : 

The  vast  majority  of  the  decisions  of  the  courts  of  this  country 
rendered  prior  to  1870,  in  so  far  as  they  relate  to  questions  of 
corporation  law,  are  for  the  most  part  a  veritable  legal  "junk- 
shop"  representing  either  what  is  now  "liorn-book  law,"  or  else 
overruled  cases.  Many  of  these  conlain  enunciation  of  principles 
of  corporation  law  the  soundness  of  which  no  one  in  these  days 
would  venture  to  dispute,  or  else  they  represent  propositions  of 
law  whicli  are  no  longer  regarded  as  sound.  The  c()r[H)riili()n 
law  of  to-day,  by  engrafting  into  its  su])ject  matter  accepted  prin- 
ciples of  agency  and  estop[)el,  has  assumed  ;i  form  which  the 
cor[)oration  lawyer  of  fifty  years  ago  would  find  great  difficulty  in 

recognizing. 

vii 


TREFACE. 

In  the  preparation  of  this  work  utility  and  accuracy  have  been 
kept  constantly  in  mind.  The  writer  has  made  free  use  of  certain 
exceptional  iacilitios  that  have  been  open  to  him  through  his 
professional  connections,  including  access  to  a  large  number  of 
forms  as  well  as  a  great  deal  of  correspondence  with  state  ollicials 
in  the  various  commonwealths.  The  forms  for  drawing  charters 
in  the  various  states,  while  prepared^  by  the  author,  have  also 
been  approved  in  every  instance  by  competent  attorneys  who 
reside  in  the  state  under  the  laws  of  which  the  draft  of  the 
charter  was  made. 

All  of  this  has  been,  it  is  hoped,  to  the  advantage  of  the  pro- 
fession and  the  public  at  large. 

THOMAS   GOLD   FROST 

76  William  Street,  Neav  Yokk  Citt,  N.Y. 
December  1,  1904. 


vui 


TABLE  OF  CONTENTS. 


Table  of  Cases xv 

Introduction 1 


§ 

1. 

§ 

2. 

§ 

3. 

§ 

4. 

§ 

5. 

§ 

G. 

§ 

7. 

§ 

8. 

§ 

9. 

§ 

10. 

§ 

11. 

§ 

12. 

§ 

13. 

§ 

14. 

§ 

15. 

§ 

16. 

§ 

17. 

§ 

18. 

§ 

19. 

§ 

20. 

§ 

21. 

§ 

o.-) 

§ 

23. 

§ 

21. 

§ 

2.'). 

§ 

2G. 

PART  I. 

INCOEPORATIOX    AND    ORGANIZATION"    OF 
CORPORATIONS. 

CHAPTER  I. 

DRAFTING    THE   CHARTER. 

Page 

General  Remarks  ou  Corporate  Charters 9 

lucorporators 1'- 

Corporate  Name 14 

Corporate  Purposes 15 

Number  of  Corporate  Purposes  permitted 19 

Collateral  Attack  upon  Corporate  Purposes  and  Powers      ...  21 

Effect  of  Inserting  Illegal  Purposes 28 

Corporate  Powers,  Classification  of 29 

Common  Law  Powers,  Definition  of  ;  Enumeration  of   ...     .  30 

Riglit  to  a  Corporate  Xame       31 

Right  of  Perpetual  Succession 31 

Right  to  adopt  and  use  a  Corporate  Seal 32 

Power  to  acquire,  hold,  and  dispose  of  Real  and  Personal  Property  32 

Power  to  appoint  Corporate  Officers  and  Agents        33 

Power  to  establish  By-Laws        33 

Power  to  sue  and  be  sued 34 

Express  Powers,  Definition  of ;  Enumeration  of 34 

Power  of  Corporations  to  purchase  their  own  Stock       ....  30 
Power  to  subscribe  for,  purchase,  and  hold  Stock  in  other  Cor- 
porations        37 

Pow(!r  to  consolidate  witii  other  Cor[ioratious 38 

Power  to  transact  all  or  any  Part  oi  iU*-  Corporate  Husiness  out- 
side of  the  State  of  its  Doniicil(!       38 

Power  to  perform  Constituent  Actsoutsideof  the  Domiciliary  State  40 

Power  to  extend  Corporate  Existence 40 

Power  to  change  the  Corporate  Name 41 

Power  to  increase  or  decrease  Capital  Stock 41 

Power  to  issue  Preferred  Stock 41 


X  TABLE    OF    CONTENTS. 

Pago 

§  27.     Power  to  change  the  Corporate  Purposes 46 

§  2S.     Power  to  change  Number  of  Directors 46 

§  20.     Power  to  cliange  the  Corporate  Domicile  and  Princijial  Place  of 

Pusiness 47 

§  '^O.     Power  to  acquire  and  enforce  a  Lion  upon  Stock  to  secure  the 

Payment  of  Debts  Due  the  Corporation 47 

§  31.     Power  to  levy  Assessments  against   the   Stockholders  with  the 

Kiglit  to  forfeit  their  Stock  for  Non-payment  thereof       ...  48 

§  o"2.     Power  to  authorize  Voting  by  Proxy  at  Stockholders'  Meetings  49 

§  33.  Power  to  permit  Cumulative  Voting  in  the  Election  of  Directors  49 
§  34.     Power  to  issue   Stock  as  full  paid  in  Exchange  for  Property  or 

Services 49 

§  35.  Power  to  dispose  of  Corporate  Assets  as  an  Entirety  ....  51 
§  36.     Power  to  voluntarily  dissolve  the  Corporation  without  Recourse 

to  the  Courts 52 

§  37.     Power  to  insert  in  the  Charter  Provisions  for  the  Regulation  of 

the  Internal  Affairs  of  the  Corporation 53 

§  38.     Power  to  authorize  Directors  to  adopt  By-Laws 55 

§  39.     Power  to  authorize  Appointment  of  Executive  Connnittee  from 

the  Board  of  Directors 56 

§  40.     Power  to  enlarge  or  diminish  Corporate  Powers 56 

§  41.     Power  to  change  Par  Value  of  Shares 57 

§  42.     Power  of  Bondholders  to  vote  at  Election  of  Directors   ....  57 

§  43.     Power  to  classify  Directors 57 

§  44.     Power  to  amend  Articles  before  Organization 58 

§  45.     Power  to  surrender  Charter  before  Organization 58 

§  46.     Power  given  to  Minority  Stockholders  to  compel  Purchase  of  their 

Holdings  upon  Consolidation 58 

§  47.     Incidental  Powers,  Definition  and  Enumeration  of 59 

§  48.     Power  to  make  Contracts 60 

§  49.     Power  to  borrow  Money 60 

§  50.     Power  to  give  and  accept  Customary  Evidences  of  Debt     ...  60 

§  51.     Power  to  mortgage  and  pledge  Real  and  Personal  Property     .     .  60 

§  52.     Power  of  Amotion 60 

§53.     The  Modern  Doctrine  of  Ultra  Vires 61 

§  54.     Corporate  Domicile 65 

§  55.     Board  of  Management 67 

§  56.     Capital  Stock 07 

§  57.     Limitations  upon  Amount  of  Capital  Stock 09 

§  .58.     Par  Value  of  Capital  Stock 70 

§  .59.     Amount  of  Stock  Subscriptions 70 

§  60.     Amount  of  Stock  paid  in 72 

§  61,     Amount  of  Stock  with  which  a  Corporation  may  begin  Business  73 

§  62.     Duration  of  Corporate  Existence 73 

§  63.     Date  of  Annual  Meeting 74 

§  64.     Limitation  upon  Corporate  Indebtedness 74 

§  65.     Exemption  of  Stockholders  from  Personal  Liability       ....  75 

§  66.     Adoption  of  By-Laws  by  Directors 75 

§  67.  Provisions  for  the  Regulation  of  the  Internal  Affairs  of  the  Cor- 
poration         76 


§ 

70. 

§ 

71. 

§ 

72. 

§ 

73. 

§ 

74. 

§ 

75. 

§ 

76. 

§ 

77. 

§ 

78. 

§ 

79. 

§ 

80. 

§ 

81. 

§ 

82. 

TABLE    OF    CONTENTS.  XI 

Page 

§  68.     Miscellaneous  Provisions  relative  to  Contents  of  Articles  of  In- 
corporation        76 

§  69.     Construction  of  Charter 77 


CHAPTER  II. 

PROCURING    THE    CHARTER. 

Signing  the  Articles 79 

Acknowledgment  of  Execution  of  Articles        79 

Publication  of  Articles 80 

Atlidavit  as  to  Stock  Subscriptions 81 

Anti-Trust  Affidavit 81 

Special  Requirements  in  Particular  States    . 81 

Powers   of    State    Officials   relative    to    accepting    or  rejecting 

Articles       , 82 

Right  to  Mandamus  State  Officials  for  refusing  to  file  Articles     .  84 

Organization  Tax 84 

Form  in  which  Charter  is  granted 86 

Filing  and  recording  in  Local  County  Offices 86 

Distinction  between  (Zeyi/re  and  c/e/oc/o  Corporations    ....  87 
Right  of  Parties  other  than  the  State  to  collaterally  impeach 

Corporate  Existence       88 

§  S3.     Right  of   State  to  attack  Corporate  Existence  in  Direct   Pro- 
ceedings        90 

§  84.     When  does  Corporate  Existence  commence  ? 92 


CHAPTER  III. 

ORGANIZATION    OF    CORPORATIONS    AFTER    INCORPORATION. 

The  Incorporators'  Organization  ^Meeting   ........  95 

Organization  Meeting,  how  called 96 

Organization  Meeting,  where  held 96 

Steps  Necessary  to  complete  Organization 98 

Adoption  of  By-Laws 99 

Election  of  Directors 100 

Power  to  hold   Meetings  for  the  Election  of  Directors  without 

the  Domiciliary  State 104 

Voting  by  Proxy lot 

First  Directors'  fleeting        105 

Election  of  Corporate  Officers lo7 

Appointment  of  Executive  Committee 107 

Stock  Assessments        108 

Certificates  re<iuired  to  be  made  by  Officers  or  Directors  after 

Organization 109 

Time  in  wliich  Corporation  must  organize  and  commence  Business  109 

Stock  Certificates 110 


§ 

85. 

§ 

86. 

§ 

87. 

§ 

88. 

§ 

89. 

§ 

90. 

§ 

91. 

§ 

92. 

§ 

93. 

§ 

94. 

§ 

9.5. 

§ 

96. 

§ 

97. 

§ 

98. 

§ 

99. 

Xil  TABLE    OF    CONTENTS. 

CHAPTER   IV. 

ISSUANCE    AND   PAYMKNT    OF   CAPITAL    STOCK. 

Page 

§  100.     General  Remarks  as  to  the  Issuance  and   Payment  of  Capital 

Stock  upon  tlie  Organization  of  a  Corporation 112 

§  101.     Iklanner  of  Payment  of  Capital  Stock 113 

§  10'2.     Payment  of  Capital  Stock  in  Services ,     .     .  120 

§  \0'^.     Payment  of  Capital  Stock  in  Property 120 

§  104.     Statement  of  True  Value  Rule 122 

§  105.     Statement  of  Good  Faitli  Rule 123 

§  106.     Statement  of  "  Speculative  Value  Rule  " 125 

§  107.     Effect  of  Appraisal  of  Property  by  Directors  under  Statutory 

Authority,  when  taken  in  Exchange  for  Stock 137 

§  lOS.     Effect  of  Appraisal  of  Value  of  Property  by  State  Officials  when 
the  same  is   taken  by  Corporations  in  Exchange  for  their 

Capital  Stock 139 

§  109.     Meaning  of  Non- Assessable  Stock 141 

§  110.     Meaning  of  Full-Paid  Stock 142 

CHAPTER  V. 

LEGISLATIVE    CONTROL   OVER    DOMESTIC    CORPORATIONS. 

§  111.  Statement  of  Principal  INIethods  by  which  Legislative  Control 

over  Domestic  Corporations  is  obtained 145 

§  112.  Amendment  of  Charters       .     .     .     .   • 145 

§  113.  Reserved  Right  of  the  State  to  repeal  Charters        153 

§114.  Legislative  Control  over  Dissolution  of  Corporations    ....  154 

§  115.  Forfeiture  of  Charters 157 

§  116.  The  Police  Power  of  the  State 160 

§  117.  Legislative.  Investigation  into  Corporate  Affairs 164 

§  118.  Legislative  Requirement  of  Annual  Reports  from  Corporations  164 

§  119.  Inspection  of  Corporate  Books 165 

§  120.  Anti-Trust  Legislation    .     .     .     » 167 

§  121.  Regulation  of  Internal  Affairs 168 

§  122.  Liability  of  Stockholders  for  Debts  of  the  Corporation      .     .     .  109 

§  123.  Statutory  Liability  of  Directors 174 

§  124.  Extension  of  Corporate  Existence 176 

§  125.  Taxation  of  Domestic  Corporations .177 

§  126.  Regulation  of  the  Right  of  the  Consolidation 178 

CHAPTER   VL 

LEGISLATIVE    CONTROL    OVER   FOREIGN    CORPORATIONS. 

§  127.     Extent  of  Legislative   Power  of  the  various  Commonwealths 

over  Foreign  Corporations 180 

§  128.     Doctrine  of  State  Comity 184 

§  129.     Wliat  constitutes  doing  Business  on  the  Part  of  a  Foreign  Cor- 
poration within  the  State 190 


TABLE    OP    CONTENTS.  XI 11 

Page 
§  130.     Penalty  for  transacting  Business  in  a  Foreign  State  without 

obtaining  a  Permit 105 

§  131.     License  Tax  on  Foreign  Corporations 198 

§  132.     Annual  License  Tax  on  Foreign  Corporations 199 

§  133.     To  what  Extent  is  the  Taxing  Power  of  the  State  with  reference 

to  Domestic  and  Foreign  Corporations  engaged  in  Interstate 

Commerce  limited  by  the  "  Commerce  Clause  "  of  the  Federal 

Constitution? 202 


PART  II. 

SYNOPSIS-DIGEST  OF  THE  INCORPORATIOX  ACTS 
OF  THE  SEVERAL  STATES  AND  TERRITORIES 
OF   THE   UNITED   STATES 211-39G 

APPENDIX   TO   PART   IL 

SYNOPSIS-DIGKST   OF    THE    BUSINESS    CORPORATIOX   ACT. 

Dominion  of  Canada 39G 

Manitoba        397 

Hawaii 398 

Philippines 399 

Porto  Rico 400 


PART   III. 

FORMS   AND  PRECEDENTS. 

Specific  Object  Clauses 403-442 

Forms  for  drawing  Charters  in  all  the  States  and  Territories      .     .  443-508 

General  Object  Clauses  for  Insertion  in  Charters 509-510 

Clauses  regulating  Ru.siness,  etc 510-511 

Composite  Form  of  Minutes 512-518 

Coniiiosite  Form  of  By-Laws 519-524 

Miscellaneous  Forms  and  Precedents 521-507 

Suggestions  relative  to  the  Drafting  of  Charters  and  the  Preparation 

of  Minutes  for  tlic  Organization  Meetings  of  Corporations     .     .  507-570 

Table  of  Organization  Taxes  for  all  the  States  and  Territories    .     .  571 

Table  of  Annual  Franchise  Taxe.s  for  all  the  States  and  Territories  572 

Mi.scellaneous  'J'ables        573-587 


General  Index 589-Gll 

Index   to   Synopsis-Digest   of    the   I.ncorporation  Acts   of 

THE  Several  State.s  and  Terkitokik.s 013 

Index  to  Precedents G15-G22 


TABLE  OF  CASES. 


[The  references  are  to  pages.] 


A. 

A.  C.  I.  Co.  ?;.  Ellis,  loOInd.  212;  o9N.  E.  679 267 

A.  C.  Society  v.  Gartell,  2;]  Ga.  448 257 

A.,  6tc.  R.  R.  Co.  V.  Fletcher,  35  Kan.  236  ;  10  Pac.  596 40 

A.  L.,  etc.  Co.  v.  Mete.  R.  Co.,  157  III.  641 ;  42  N.  E.  153 77,88,178 

A.  M.  &  G.  B.  Co.  V.  Bulkley,  107  Mich.  447 ;  05  N.  W.  291 298 

A.  M.  F.  Insurance  Co.  v.  Jesser,  87  Mass.  446 291 

A.  M.  L.  I.  Co.  r.  Owen,  15  Gray  (Mass ),  491 192 

A.  R.  R.  Co.  V.  KidJ,  29  Ala.  221 33 

A.  S.  A.  &  G.  Co.  V.  Whittier,  117  Mass.  451 109 

A.  S.  Co.  r.  Heiilenheimer,  SOTexas,  344;  15S.  W.  1038 13 

A.  S.  Mining  Co.  y.  Company,  78  Cal.G29;  21  Pac.  373 232 

A.  S.  &  W.  Co.  V.  Eddy,  130  Mich.  266  ;  89  N.  W.  952 298 

A.  T.,  etc.  Co.  I'.  Hays,  1(55  Pa.  St.  489;  30  Atl.  93G 125 

A.  &  L.  T.  Co.  V.  Ilolthoiise,  7  Ind.  59 KiO 

A.  &  N.  T.  Ry.  Co.  v.  Smith,  15  0.  St.  328 94 

A.  &  R.  A.  L.  Co.  u.  State,  63  Ga.  2183 179 

AI)l)ott  I'.  Company,  33  Barb.  (N.  Y.)  583 146 

Abbott  V.  Company,  4  Neb.  416 11,  87 

Acme  Men.  Agency  v.  Hochford,  10  S.  I).  203 ;  72  N.  W.  460 366 

Adams  v.  Com[)any,   Fed.  Cases,  47 9 

Adams  Ex.  Co  v.  Ohio,  166  U.  S.  224 205 

Adv.  Ben.  Order  v.  Company,  195  Pa.  St.  002  ;   46  Atl.  102 354 

Afferton  v.  Company,  07  Ind.  334 93 

Ag.  B,ink  V.  Burr,  24  Me.  256 72 

Albright  v.  Association,  102  Pa.  St.  411       28,  54 

Albright  y.  Company,  8  N.  M.  110;  42  Pac.  73 330 

Aldrich  v.  A.  C.  &  1).  Co.,  24  Ore.  32;  32  Pac.  750 351,  352 

Alliance  Trust  Co.  r.  Wilson,  9  Kan.  891  ;  59  Pac.  177 277 

Ailing  V.  Wenzel,  133  111.  264 ;  24  N.  K.  551 122 

Allison  u.  Coal  Co.,  87  Tenn.  60;  9  S.  W.  226 75,368 

American  Broom  &  Brush  Co.  v.  Addicks,  19  N.  Y.  Misc.  Rep.  36 192 

American  Clay  .Mfg.  Co.  v.  Am.  Clay  Mfg.  Co.,  198  Pa.  St.  189 ;  47  Atl.  930   15, 83,  352 

American,  etc.  CMiristian  Union  r.  "^'ount,  101  U.  S.  350 181,  192 

American,  etc.  Co.  v.  .lolmston,  60  Fed.  503 GG 

American  II.  S.  Co.  v.  O'Rourke,  23  .Mont.  530;  59  Pac.  910 313 

American  Ins.  Cr).  v.  Owen,  15  (irav,  491 295 

American  Ins.  Co.  /;.  Wellman,  69  Ind.  413 209 

American  Order,  etc.  ?•.  Merritt,  151  Mass.  558;  24  N.  E.  018 26 

American  Tube  &  Iron  Co.  '•.  Company,  165  Pa.  St.  489;  30  Atl.  940    ....  121 

American  Tube  Works  i;.  Machine  r.).,  l.",!*  Mass.  5;  29  N.  E.  63 292 

Anilergon  flarriage  Co.  v.  Pungs,  127  Mich.  543;   80  N.  W.  1040 297 

Andres  r.  Fry,  113  Cal.  124;  45  I 'ac.  534 50 

Andrews  ?•.  Andrews,   110  111.223 83 

Andrews  v.  Company,  37  .Me.  256 20 

Applicati(m  of  I,a  Societt',  etc.,  123  Cal.  625:  56  Pac.  458 2.'U 

Arapahoe,  etc.  Co.  v.  Stevens,  13  Col.  634  ;  22  I'nc.  823 120 


xvi  TABLE   OF   CASES. 

Aronts  v.  Conipanv,  101  Fed.  133 158 

Arms  V.  Conant.  'M  Vt.  744 06,  103,  101 

A*lilaii<l  Lumber  Co.  r.  Detroit  Salt  Co.,  114  Wis.  66;  89  N.  \V.  904     ....     3'J3 
Asliiev  r.  Kvan,  49  O.  St.  5U4  ;  31  N.  E.  721  ;  153  U.  S.  436      ....     85,  203,  210 

Ashlev  Wire  Co.  r.  Companv.f.O  111.  Ap.  179 38,40 

AslitoM  c  Burbank,  2  Dill.  (U.  S.)  435;  Fed.  Cases,  582. 46,147 

Asiwille  Div.  c.  Osten,  92  N.  C.  578 3:]7 

Aspinwall  r/ (,/.  r.  ().  &  >L  K.  K.  Co.,  20  Iml.  492 40,104 

Ateliisoii  Bank  r.  Dtirfee.  18  Mo.  431;  24  S.  W.  133 48 

Atterburv  )'.  Kno.x,  4  H.  Monroe  (Ivy.),  90 185 

Attorney  General  (•.  Bay  State  Min.  Co  ,  99  Mass.  148 178 

Attorney  General  r.  Company,  93  Wis.  604;  67  N.  W.  1138 393 

Attorney  General  c  Company,  35  Wis.  425 391 

Attornev  General  v.  Ferkin,  73  Mich.  308 176 

Augusta'  Bank  v.  I'^arle,  13  I'eters,  51'.)  {see  Bank  of  Augusta  v.  Earle). 

AiiitmanTavlor  Co.  c.  Mead,  22Kv.  Law  Bep.  1189;  60S.  W.  294 280 

Austin  V.  Berlin,  13  Col.  198 ;  22  Fac.  433 109,  286,  237 

Austini;.  Tennessee,  179  U.S.  343;  45  L.  E.  224   . 164,208 


B. 

B  B.  &  T.  Co.  V.  J.  B.  T.  Co.,  101  Tenn.  545 ;  48  S.  W.  228 ■    13,  98 

B.  B.  Co.  V.  A.  &  C.  Co.,         Ariz.  ;  35  Fac.  983 22(J 

B.  B.  11.  Co.  V.  Buck,  68  Me.  81 96,106 

B.  G.  L.  Co.  V.  ClaflTv,  151  N.  Y.  24  ;  45  N.  E.  390 02 

B.  J.  C.  C.  Co.  V.  Sclierr,  50  W.  Va.  533  ;  40  S.  E.  514 85,  39!) 

B.  F.  Co.  V.  Rose  et  <d.,  95  Wis.  145 ;  70  N.  W.  302 391 

B.  K.  V.  O.  Co.  r.  Hanley,  15  Utah,  506;  50  Fa.  611 63 

B.  W.  S.  Co.  V.  Inhabitants  of  Braintree,  146  Mass.  482  ;  16  N.  E  420  .     .     .     91,  92 

B.  &  M.  C.  C.  &  S.  M.  Co.  I'.  M.  O.  F.  Co.,  89  Fed.  529 51 

B.  &  ().  Ry.  Co.  V.  Maryland,  88  U.  S.  (21  Wall.)  450;  22  L.  E.  678  .     .     .    .  85,  203 

Babbitt  I'.  Field,  Ariz. ;  52  Pac.  775 228 

Babbitt  V.  E.  J.  I.  Co.,  1  Stew.  Dig.  208,  sec.  13 96 

Badger  Faper  Co.  v.  Rose,  95  Wis.  45  ;  70  N.  W.  302 92,  93 

Baines  i-.  Babcock,  95  Cal.  581 ;  27  Pac.  674 232 

Baker  f.  Backus,  32  111.  79 61,88,113 

Baker  ('.  Cincinnati,  11  O.  St.  534       85 

Bakers'  Appeal,  109  Fa.  St.  461 49 

Balfour  V.  Company,  27  Ore.  300;  41  Fac.  164 351 

Ball  f.  Toman,  119  Cal.  35;  51  Fac.  546 175 

Baltimore  City  Fass.  Co.  v.  Ilambleton,  77  Md.  341 95 

Baltimore,  etc.,  Tel.  Co.  v.  Company,  37  La.  Ann.  883 69 

Banet  v.  Company,  13  III.  504 46,  147 

Bankr.  Alden,  129  U.  S.  372;  32L.  E.  725 124,125 

Bank  y.  Company,  103  Cal.  594;  37  Fac.  499 232 

Bank  o.  Company,  17  Ap.  Div.  (N.  Y.)  524 160 

Bank  v.  Company,  18  Vt.  131 36 

Banki;.  Company,  32  W.  Va.  357;  9  S.  E.  213 121,138 

Bank  v.  Davies,  43  la.  424 87 

Bank  i-.  Hall,  35  O.  158 173 

Bank  v.  McCarthy,  55  Ark.  473 ;  18  S.  W.  759 106,  226 

Banki..  Fierson,  112  Mich.  410;  70N.  W.  901 297 

Bank  r.  Siierman,  28  Ore.  577  ;  43  Fac.  658 in2 

Bank  v.  Walton  Iron  Co.,  30  Bull  (Ohio),  382 56 

Bank  v.  Wickersham,  34  Cal.  444 37 

Bank  Commissioners  w.  Bank  of  Buffalo,  6  Faige  (N.  y.),  497 175 

Bankof  Augusta  r.  Earle,  13  Feters,  519 38,96,201 

Bank  of  Holly  Springs  »•.  J'inson,  58  Miss.  421 75 

Bank  of  Louisville  r.  Young,  37  Mo.  398 197 

Bard  r.  Foole,  12  N.  Y.  495 l'*2 

Barr  i;.  Company,  125  N.  Y.  263  ;  26  N.  E.  145 115 

Barry  ?;.  Company,  1  San.  Ch.  (N.  Y.)  280 69,74 


TABLE    OF    CASES.  XVI I 

Bartemeyer  v.  Iowa,  18  Wall.  133 161 

Bartholomew  v.  Company,  69  Conn.  521  ;  38  Atl.  45 51 

Barton  y.  Associauon,  114  Ind.  226  ;  Id  N.  E.  486 53,155 

Barton  Nat.  Bank  r.  Atkins,  72  Vt.  83;  47  Atl.  176 377 

Bartow  r.  .Mix,  15  Wash.  563;  46  Pac.  1033 383 

Bassett  v.  Companv,  15  Nev.  293 106,  318 

Bates  f.  Day,  ly8  Pa.  St.  513;  48  Atl.  407 173,354 

Bates  r.  Wilson,  14  Col.  140;  24  Pac.  99     . 27,67 

Bavou  Cook  Xav.  &  Fislieries  Co.  c.  DouUut  (La.),  35  So.  729 20 

Beach  i'.  Smith,  30  N.  Y.  116 50 

Beard  v.  N.  &  A.  P.  Co.,  71  Ala  60 217 

Beardsley  v.  Johnson,  121  N.  Y.  224 ;  24  N.  E.  380 74,  103,  107 

Beckett  v.  Houston,  32  Ind.  393 101 

Beer  Co.  r.  Massachusetts,  97  U.  S.  25 162 

Beitman  v.  Steiner,  98  Ala.  241 ;  13  So.  87       41,  143,  215 

Belknap  f.  Adams,  49  La.  Ann.  1350;  22  So.  382 36 

Bellows  I'.  Todd,  39  Iowa,  209 40,  104 

Benedict  v.  Company,  49  N.  J.  Eq.  235  ;  23  Atl.  485 •  .     .     .     .       52 

Benner  v.  State,  7  Lea  (Tenn.),  682 86 

Bent  y.  Underdown,  156  Ind.  516;  60N.  E.  307 54,267 

Bergerv.  U.  S.  Steel  Corporation,  63  N.  J.  Eq.  809;  53  All.  08 325 

Bergeron  f.  Hobbs,  06  Wis.  641;  71  N.  W.  1056 87,173 

Bergman  r.  Association,  29  Minn.  275  ;  13  N.  W.  120 100 

Berry  i.-.  Rood,  168  Mo.  316;  67  S.  W.  644 309 

Bertha  Zinc  &  Mining  Co.  i-.  Clure,  7  N.  Y.  Misc.  Rep.  128 193 

Berthin  v.  Company,  28  La.  210 38 

Berwick  v.  Companv,  39  Mich.  701 74 

Bibb  I'.  Hall,  101  Ala.  79  ;  14  So.  98 215 

Bickley  v.  Schlag,  46  N.  J.  Eq.  533  ;  20  Atl.  250 125,  326 

Bigelow  V.  Gregory,  73  111.  197 80 

Billings  c.  Robinson,  94  N.  Y.  415 334 

Bird  V.  Daggett,  97  Mass.  494 290 

Birds  Case,  1  Simon  (N.  s.),  47;  40  Eng.Ch.  47 24 

Bishop  V.  Globe  Co.,  135  Mass.  132 48,  295 

Black  V.  Colwell,  83  Fed.  880 192 

Black  r.  Compinv,22  N'.  J.  Eq.  130 78 

Black,  etc.  Co.  u.  lloU.vav,  85  Wis.  344;  55N.  W.  418 56 

Blackwell  I'.  State,  36  Ark.  178 106,225,220,227 

Blien  c.  Rand,  77  Minn.  110;  79  N.  W.  606 300 

Block  V.  Womer,  100  III.  328 109 

Blodgett  I'.  L.  Z.  Co.,  120  Fed.  893 40 

Board  of  Trustees,  etc.  v.  Campbell,  48  La.  Ann.  1543;  21  So.  184 280 

Boice  y.  Hodge,  51  O.  St.  236 ;  37  N.  E.  265 344 

Bolen  V.  Crosby,  4.)  N.  Y.  183 175 

Boiling  V.  Le  Grand,  87  Ala.  482 ;  0  So.  332 82 

Bonaparte  I'.  B.  H.  &  Co.,  75  .Md.  340 ;  23  Atl.  784 288 

Bonman  i\  Railway,  125  U.  S.  491 208 

Booth  p<  a/.  V.  Robinson  ("^  a/.,  55  Md.  419 287 

Borough  of  Braddock  r.  Company,  189  Pa.  St.  370;  42  Atl.  15 92,93 

Boston  Acid  .Mfg.  Co.  r.  Moring,"l5  Gray  (Mass.),  211 74,80,109 

Boston  (ilass  .Manufactory  Co.  r.  Langdon,  24  Pick.  49 52,  156,  157 

Bourdette  v.  Sieward,  107  La.  Ann.  258  ;  31  So.  630 2.^2 

Bouton  i>.  Denent.  123  III.  142;  14  N.  K.  02 121 

Bowie  v.  Grand  Lodge,  99  Cal.  392;  34  Par.  103 46 

Boyce  v.  Church,  46  .Md.  359 22,23,83 

Boyd  V.  Company,  90  Pa.  St.  169 82 

Bover  /•.  W.  P.  R    R.  Co.,         Idaho,         ;  GO  Pac.  826 260 

Boyington  u.  Van  Htten,  62  Ark.  63;  35  S.  W.  622 221) 

Boynton  M.  Hatch,  47  N.  Y.  225 121 

Bradley  y.  .McKee,  5  Cranch  C.  C.  298;  Fed.  Cases,  1784 156 

Bradley  I'.  Reppell,  133  Mo.  545;  32  S.  \V.  645 74,155 

Braintreo  Water  Snpj.lv  Co.  v.  Braintree,  146  Mass.  482  ;  10  N.  E.  420      .     .     .       9ft 

Brandt  >:  Ehlon,  59  M.l.  1 134,  289 

BrechbilU'.  Randall.  102  Ind.  528;  IN.  E.  362 269 

Brennan  v.  Titusville,  163  U.  S.  289 192 

b 


XVIU  TABLE   OF   CASES. 

Browstor  v.  ITjirtlev,  37  Cnl.  15 37 

Britliio  Co.  V.  Ferrv  Co.,  29  (.'unn.  221 78 

IJrklIre  Co.  r.  Woolev,  78  Kv.  525 66 

Briiliiam  r.  Natliaii.  02  Kan.  24;5 ;  G2  Pac  .110 276 

Briditman  r.  Hates,  175  Mass.  105;  55  N.  E.^OO 106 

BriiikcTliolY.  etc.  Co.  r.  Company,  118  Mo. -147;  24  S.  W.  129 47 

Hroa.lwav  Nat.  Bank  r.  Haker,  170  Mass.  2'.U  ;  57  N.  E.  003 205 

IJmckwaV  r.  ti.  M.  L.  Co.,  102  Ala.  620;    15  So.  431 214 

Brooks  i\Svii<licate,  24  Nev.  204,  311  ;  52  Fac.  575;  5o  Tac.  507 320 

Brown  r.  Brink,  57  Neb.  OOt) ;  78  N.  W.  280 316 

Brown  r.  (Mow,  158  Ind  403  ;  02  N.  E.  1006 207 

Brown  V.  Company,  10  Fla.  472 250 

Brown  y.  Corbin,  40  Minn.  508;  42  N.  W.  481 16 

Brown  !•.  F.  S.  H.  Co,  110  Fed.  472 120 

Brown  v.  lloirs,',  1^  HI-  i^l'-^ 32 

Brown  r.  K.  K.  Co.,  08  Ark.  134;  56  S.  W.  8f.2 227,228 

Brundage  )'.  Company,  12  Ore.  322;  7  Pac.  314 351 

Brnner  c.  Brown,  139  Ind.  600;  38  N.  E.  318 121,126,267 

Budd  r.  Company,  15  Ore.  413;  15  Pac.  659 100 

Budd  V.  New  York,  143  U.  S.  517  ;  36  L,  E.  217 103 

Buffalo,  etc.  Hy.  Co.  v.  Cary,  26  N.  Y.  75 88 

Buffalo,  etc.  Ry.  Co.  v.  Hatch,  20  N.  Y.  157 69,  71,  73,  81 

Buffalo  Zinc  &  Copper  Co.  1-.  Crump,  70  Ark.  525;  69  S.  W.  572 220 

Burden  r.  Burden,  159  N.  Y'.  187;  54  N.  E.  17 108 

Burixess  v.  Seli2;man,  107  U.  S.  20  ;  2  S.  Ct.  10 60 

Buriiam  r.  Company,  76  Cal.  24;  17  Pac.  940 106 

Busby  V.  Heilly  et  al.,  6  S.  D.  401  ;  61  N.  W.  164 303 

Bushiiell  i-.  Company,  138  111.  07  ;  27  N.  E.  590 74 

Butchers'  Union,  etc.  v.  Company,  111  U.  S.  746;  28  L.  E.  585 163 

Buxton  r.  Hamblen,  32  Me.  448 198 

Byrnes  v.  Beck,  10  Ga.  121 13,  98 

Byronville  Creamery  Ass'n  v.  Ivers  (Minn.),  100  N.  W.  387 13 


C. 

C.  B.  &  Q.  R.  R.  Co.  I'.  Harris,  12  Wall.  (U.  S.)  65 198 

C.  B.  &Ci.  R.R.  Co.  I'.  Lewis,  53Li.  101;  4N.  W.  842 33 

C.  C.  Ry.  Co.  V.  Allerton,  18  Wall.  233 41,  70 

C.  D.  &  M.  Ry.  Co.  v.  Keisel,  43  la.  39 41 

C.  G.  &  S.  M.  Co.  V.  Ruble,  8  Ore.  285 13,  98,  348,  340 

C.  G.  L.  Co.  r.  City  of  Covington,  22  K.  L.  R.  700,  58  S.  W.  805 278 

C.  M.  H.  A.  Co.  V.  Rosenthal,  55  111.  85 197,  198 

C.  M.  L.  &  I.  Ass'n  v.  Hunt,  127  111.  257 100 

C.  O.  L.  I.  Co.  V.  Sawyer,  44  Wis.  387 192 

C.  O.  N.  G.  &F.  Co.  y.  C.  D.  Co.,  60  O.  96;  53N.  E.  711       30,00 

C.P.E.  Co.  r.  Company,  152  Mass.  432;  28  N.  E.  300 192 

C.  R.  Co.  V.  P.  R.  Co.,  31  N.  J.  Eq.  475 13,  324 

C.  R.  R.  Co.  i;.  Company,  32  S.  C.  319 ;  11  S.  E.  192 361 

C.  R.  S.  Bank  v.  Fiske,  62  N.  H.  78,  180 321 

C.  U.  A.  Co.  V.  Scammon,  102  111.  46 192 

C.  V.  &  P.  Co.  V.  Secretary  of  State,  128  Mich.  621  ;  87  N.  W.  901  ....     28,  76 

C.  V.  &  P.  Co.  I'.  Secretary  of  State,  88  Detroit  L.  N.  795 297 

C.  V.  Co.  y.  Iloffmeister,  62  O.  St.  189;   56  N.  E.  10.33 344 

Cahill  V.  Association,  94  Md.  P.o'i  ;  50  Atl.  1044 289 

Cahill  )•.  Company,  2  Doup.  (Mich.)  128 3.3,76 

California  v.  Com'panv,  127  U.  S.  1 ;  8  S.  Ct.  1073 ;  32  L.  E.  157 85 

California  >■.  R.  R,  127  U.  S.  71 205 

California  Bank  r.  Kennedy,  167  i:.  R.  362;  42  L.  E.  198 51 

Callanan  '•.  Windsor,  78  la.  193;  42  N.  W.  6.52 135 

Calumet  Paper  Co.  v.  Company,  96  la.  147 ;  64  N.  W.  782 270 

Camden  r.  Stuart,  144  U.  S.  104;  12  S.  Ct.  584 113 

Camp  1-.  Byrne,  41  Mo.  525 40,  96,  104,  308 


TABLE    OF    CASES.  XIX 

Campbell  v.  Am,  Zylonite  Co.,  122  N.  Y.  455 ;  25  N.  E.  853 42 

Canada  S.  Ry.  Co.  v.  Gebhard,  109  U.  S.  527 ;  3  S.  Ct.  363 40,  181 

Canfield  v.  Gregory,  60  Conn.  9 ;  33  Atl.  536 173 

Camiody  V.  Towers,  OOMicli.  26;  26  N.  W.  80 ,     .     .     .     .       12 

Carnalian  t^.  Campbell,  158  Ind.  226;  63  N.  E.  384 267 

Carolina  Iron  Co.  v.  Abernatliv,  94  N.  C.  545 24 

Carpenter  r.  People,  8  Col.  116;  5  Pac.  828 235 

Carr  v.  La  Fevre,  27  Pa.  417 121, 135 

Carroll  v.  Bank,  8  Mo.  Ap.  253 100 

Carroll  y.  Bank,  19  Wash.  639;  54  Pa.  32 24,27 

Carson  Hand  Co.  v.  Stern,  129  Mo.  381 ;   31  S.  W.  772 310 

Carter  y.  Company,  54  Ark.  576  ;  16  S.  NV.  579 317 

Casey  v.  Galli,  94  U.  S.  673 ;  24  L.  E.  168,  307 24,  27,  28 

Central  Ag.,  etc.  Ass'n  v.  Cotnpany,  70  Ala.  120 88 

Central  Nat.  Bank  v.  Conipanv,  104  U.  S.  54       157 

Central  Ry.  Co.  v.  Collins,  40  Ga.  582 37 

Cliafee  I'.  Bank,  71  Me.  514 66,284 

Chaffee  v.  Company,  55  Vt.  110 42 

Chamberlain  i:  Chamberlain,  43  N.  Y.  444 192 

Chamberlain  v.  Company,  118  Mass.  552 157,  174 

Chamberlain  r.  D.  S.  Works,  103  Mich.  124;  01  X.  W.  532 102 

Champion  Fire  Kindler  Co.  v.  Riscliert,  74  Mo.  Ap.  537 108 

Chandler  y.  Siddle,  5  Fed.  Cases  No.  2.594;  3  Dillon,  477 108 

Chapman  y.  Company,  62  N.  J.  497;  41  Atl.  690 36 

Chapman  v.  Doray,  6d  Cal.  52  ;  26  Pac.  605 100 

Chase  v.  Company,  5  Lea  (Tenn.),  415        48 

Chase  y.  Fleming,  Pac.  Hep.  19(j4  (not  yet  reported) 222 

Chase  v.  Lord,  77  N.  Y.  1        109 

Chase  Elevator  Co.  v.  Company,  152  Mass.  428 ;  28  N.  E.  300 109,  291 

Ciiattauooga,  etc.  Ass'n  v.  Denson  et  al.,  189  U.  S.  408 217 

Chester  Glass  Co.  v.  Dewey,  16  Mass.  94 76,  90 

Chicago  Bldg.  Mfg.  Co.  f.  Lyon,  10  Okla.  704;  04  Pac.  6 348 

Chicago  Life  Ins.  Co.  y.  Needles,  113  U.  S.  574 160 

Childs  y.  Cleaves,  95  Me.  498;  50  Atl.  714 ,287 

Chil.ls  V.  Hurd,  32  \V.  Va.  66  ;  9  S.  E.  302 87 

Childs  ('.  Smith,  55  Barb.  (N.  Y.)  45 11 

Chishohu  I'.  Forney,  05  la.  333;  21  N.  W.  064 272 

Chouteau  Ins.  Co.  o.  Floyd,  74  Mo  286       48 

Christensen  o.  Eno,  106  N.  Y.  97 ;  12  N.  E.  648 ,    .    .     68,  120,  143 

Christian  y.  A.  F.  L.  &  M.  Co.,  89  Ala.  198;  7  So.  427 217 

Ciar  ('.  Iglehart,  36  St.  457 

Cincinnati  Cooperage  Co.  v.  Bate,  16  K.  L.  R.  626  ;  26  S.  W.  5.38 279 

Cincinnati  Cooperage  Co.  v.  O'Keefe,  120  N.  Y.  603;  24  K  E.  993 175 

City  Bank  v.  Beech,  1  Blatcli.  425       38 

City  Bank  of  Columbus  f.  Bruce,  17  N.  Y.  507 36 

City  of  Greenville  y.  G.  \V.  Co.,  125  Ala.  625;  27  So.  764 217 

City  of  Guthrie  y.  Territory,  1  Okla.  188;  31  Pac.  190 88 

City  of  Puehlo  y.  Companv,  28  Col.  524  ;  67  Pac.  162 235 

City  of  Spokane  y.  Trustees,  22  Wash.  172;  60  Pac.  141 383 

City  Pottery  C(j.  v.  Yates,  37  N.  J.  Eq.  543 63 

Clapp  y.  Company,  40  Neb.  470  ;  28  N.  W.  956 87 

Clapp  y.  Peterson,  lUl  III.  26 36,  37 

Clark  y.  Beaver,  139  U.  S.  90;  11  S.Ct.  408 138 

Clark  V.  Middleton,  19  .Mo.  51 198 

Clark  y.  K.  li.  Co.,  50  Fc<l.  .3.38       182 

Clark  y.  Ilichardson,  17  Ky.  L.  Rep.  514;  31  S.  W.  878 80 

Clarke  v.  C.  \i.  K.  &  H.  Co.  H  nl.,  50  Fed.  Rep.  338 345 

Clarke  v.  Ins.  Co..  7  Mo.  Ap.  77 14 

Clearwater  v.  .Meredith,  1  Wall.  (U.  S.)  25 170 

Cleaton  y.  Rmerv,  49  .Mo.  Ap.  345 300 

Cleggy.  Company,  01  la.  121;  15  N.  W.  865 80,87,173 

Clokus  y.  (,'ompanv,  92  Wis.  325;  66N.  W.  308 392 

Clough  r.  CompanV,25  Col.  520;  55  Pac.  809 146 

Clow  y.  Brown,  LjO  In-l.  185;  48  N.  E.  1034  ;  49  N.  E.  1067 175,  176 

Clowes  y.  Miller,  00  N.J.  Eq.  179;  47  Atl.  345 103,105 


XX  TABLE   OF   CASES. 

Coatcs  I'.  Nottin.clmni  Water  AVorks  Co.,  30  Bcav.  8(3 45 

rocliran  v.  AnioKi,  68  I'a.  St.  o'J'J        24,  28,  3uo 

ColHii  r.  Uans.loll,  llOIiul.  417;  11  N.  E.  20 125 

Coit  r.  ComiKinv,  110  U.  8.  343;  7  S.  Ct.  231 124 

Coit  r.  iMvoii,  15  Utali,  420;  49  Pac.  533 45 

ColeivAdanis,  92Texas,  171;  46S.  W.  790 370 

Cole  I'.  Cassidv,  138  Mass.  347 292 

Coleman  r.  Howe,  164  111.  458;  SON.  E.  725 122,125,128,135 

Color  r.  Companv,  64  N.  J.  Kq.  117;  63  All.  080 61 

Collier  r.  Davis,  94  Ala.  450;  10  So.  80 217 

ColorailoFuel  Co.  I'.  LenlKirt,  OCol.  Ap.  511;  41  Pac.  834 237 

Colorado  Iron  Works  Co.  r.  Company,  15  Col.  499;  25  Pac.  325 191 

Colwell  V.  Springs  Co.,  100  U.  S.  55 182 

Combes  v.  Keyes,  89  Wis.  297  ;  02  N.  W.  89 165 

Combined  Saw  &  Planer  Co.  j'.  Flournoy,  88  Va.  1029 ;  14  S.  E.  976    ..     .   85,  178 

Commercial  Bank  v.  Lockwood's  Admrs.,  2  Ilarr.  8 247 

Commercial  Bank  r.  Sherman,  28  Ore.  573;  43  Pac.  658 351 

Commercial  Nat.  Bank  I'.  Burch,  141  111.  519;  31  N.  E.  420 2(31 

Commissioners  v.  Company,  128  N.  C.  568 ;  39  S.  E.  18 339 

Commissioners  v.  Shields,  02  Mo.  247 308 

Commons  v.  Company,  12  Pa.  St.  318 100 

Commonwealth  v.  Alger,  7  Cush.  84 161 

Commonwealth  f.  Company,  129  Pa.  St.  405;  18  Atl.  414 75,110 

Commonwealth  v.  Company,  52  Pa.  St.  500 70 

Commonwealth  v.  Company,  5  Mass.  230 157 

Commonwealth  i'.  Company,  98  Pa.  90 350 

Commonwealth  v.  CuUen,  13  Pa.  St.  133 40,  146 

Commonwealth  v.  Dalzell,  152  Pa.  St.  217  ;  25  Atl.  635 99 

Commonwealth  y.  Detwiler,  131  Pa.  St.  614;  18  Atl.  990 49,99 

Commonwealth  t'.  Phoenix  Iron  Co.,  105  Pa.  St.  Ill 354 

Commonwealth  u.  Railway,  142  Mass.  140;  7  N.  E.  716 291 

Commonwealth  i'.  Read  Phosphate  Co.,  23  Ky.  L.  li.  2284;  67  S.  W.  45  .     .     .     280 

Commonwealth  v.  Slifer,  53  Pa.  St.  71 156 

Commonwealth  v.  Smith,  45  Pa.  St.  59 40,  103 

Commonwealth  v.  Smith,  10  Allen  (Mass.),  448 60 

Commonwealth  v.  Standard  Oil  Co ,  101  Pa.  St.  119 191 

Commonwealth  y.  Stevenson,  200  Pa.  St.  509;  60  Atl.  91 354 

Commonwealth  L'.  Water  Co.,  110  Pa.  St.  391  ;  2  Atl.  63 110 

Commonwealth  y.  Woelper,  3  S.  &  U.  (Pa.)  29 103 

Commonwealth  v.  Worcester,  etc.  Co.,  3  Pick.  467 100 

Commonwealth  v.  Yetter,  190  Pa.  St.  488 ;  43  Atl.  226 49 

Condon  V.  Association,  89  Md.  99;  42  Atl.  944 289 

Cone,  ete.Co.  1-.  Poole,  41  S.  C.  70;  19  S.  E.  203 361 

Connecticut  River  Bank  v.  Fiske,  62  N.  H.  178 175 

Connolly  v.  Union  S.  P.  Co.,  184  U.  S.  640 ;  46  L.  E.  679 168 

Connor  I).  Abbot,  35  Ark.  366 173,225 

Continental  Trust  Co.  v.  T.,  etc.  Ry.  Co.,  82  Fed.  642 88 

Continental  Trust  Co.  v.  Toledo,  etc.  Ry.  Co.,  72  Fed.  92 45,  47 

Conway  et  al.,  ex  parte,  4  Ark.  302 225 

Cook  r.  Brick  Co.,  98  Ala.  409;  12  So.  918 217 

Cook  f.  Company,  87  Md.  1.38;  39  Atl.  94 

Cook  V.  Ilager,  3  Col.  386 230 

Cook  y.  Merritt,  15Col.212;  25Pac.  176 236,237 

Cooke  V.  Marshall,  191  Pa,  St.   815;   43  Atl.  314;  190  Pa.  St.   200;  46  Atl. 

447 08,  352,  355 

Cooper  r.  Company,  127  N.  C.  219;  .37  S.E.  216 338 

Cooper  Mfg.  Co.  v.  Ferguson,  113  U.  S.  727 ;  28  L.  E.  1137 191,  192 

Corbett  v.  Woodward,  5  Saw.  403       l"-'^' 

Corey  V.  Morrell,  61  Vt.  698;  17  Atl.  840 370 

Cork,  etc.  Ry.  Co.  v.  Cazenove,  L.  R.  10  Ad.  &  El.  .33 71 

Corrv  V.  Londonderry,  etc.  Co,,  29  Beav.  272 ;  3  L.  J.  Ch.  290       45 

Costellou.  Company,  69  N.  H.  405;  43  Atl.  040 47 

Cotton  Mills  V.  Byrnes,  114  N.  C.  353;  19  S.  E.  238 339 

Cotton  Mills  y.  Cotton  Mills,  116  N.  C.  047;  21  S.  E.  431 338 

County  of  Macon  f.  Shores,  97  U.  S.  272 110 


TABLE    OF    CASES.  XXI 

Courtright  v.  Deeds,  37  la.  503 40,  110 

Cousens  r.  Lovejoy,  81  Me.  467  ;  17  Atl.  495 287 

Covington,  etc.  Co.  v.  Sargent,  1  Cinn.  Sup.  Ct.  354 45 

Cowell  V.  Springs  Co.,  100  U.  S.  55 40,  187 

Coyote  V.  Ruble,  8  Ore.  284 13,  98,  848 

Cradiloek  v.  Mortgage  Co  ,  88  Ala.  281  ;  7  So.  196 207 

Craig  Co.  r.  Smiti),  163  Mass.  2G2;  39  N.  E.  IIIG -iO 

Craig  Medicine  Co.  c.  xMerciiants' Bank,  59  Hun,  661 ;  14  N.  Y.  Sup.  6       .     .     .     I'Li 

Crandall  r.  Lincoln,  52  Conn.  73 36,41 

Crease  v.  Babcock,  23  Pick.  344 164 

Creatcau  y.  Foote  Co.,  40  Ap.  Div.  X.  Y.  215 191 

Crissey  v.  Cooke,  67  Kan.  20 ;  72  Pac.  541        48 

Crouuvell  v.  Ins.  Co.,  2  Rich.  Law,  512 350 

Cronin  V.  Company  e<  «/.,  29  \Vk.  L.  Bui.  (Oliio)  52 73 

Crook  I'.  Company,  87  Md.  138;  39  Atl.  94 279 

Cross  V.  Company,  17  111.  54       92 

Cross  V.  Company,  90  Pa.  St.  392 147 

Cross  V.  Ry.  Co.,  35  W.  Va.  174;  12  S.  E.  1071 376 

Crumlisli  Adm'r  y.  Rv.Co,  40  W.  Va.  627;  22  S.  E.  90 375 

Crystal  Ice  &  Mfg.  Co.  v.  State,  23  Te.x.  Civ.  App.  293;  56  S.  ^V.  562  .     .     .     .""    360 

Cummer  Lumber  Co.  v.  Company,  67  N.  Y.  Ap.  Div.  151 194 

Curie  i'.  Santini,  16  La.  Ann.  27 273 

Curran  v.  Bradner,  27  111.  Ap.  582 94 

Currier  v   Companv,  56  N.  H.  262 36 

Curry  v.  Scott,  54  Pa.  St.  270 45 

Curry  f.  Woodward,  53  Ala.  371 206 

Curtis  V.  Traccy  et  al.,  62  111.  Ap.  49 867 

Curtiss  V.  Murray,  26  Cal.  633 31,  219 


D. 

T>.  F.  Co.  V.  Angn-stinc,  5  Wash.  67 180 

D.  H.  Co.  V.  Marsh,  Fed.  Cases  4014 83 

J).  M.&T.  I.  Co.  r.  Nixon,  95  Ala.  318:  10  So.  311 217 

1).  S.,  etc.  Co.  V.  Attorney-General,  21  Can.  Sup.  Ct.  72 72 

D.  &  C.  F.  Co.  y.  People,  156  111.  448;  41  N.  E.  188 203 

1).  &  EL  Canal  Co.  v.  Mabenbrock,  63  N.  J.  L.  281  ;  43  Atl.  978 328 

I).  &  S.  Ry.  Co.  )'.  1).  C.  Rv.  Co.,  2  Col.  673 235 

Daly  V.  Companv,  64  Ind.  1 180 

Dana  r.  Bank,  5  W.  &S.  (I'a.)  247 67 

Daiiielson  !'.  Voakum,  116  Cal.  :'.82;  48  Pac.  322 173 

Darncdl  »,'.  State,  48  Ark.  .321  ;  3S.  W.  365 227 

Dartmoutii  College  r.  Woodward,  14  Wheat.  518 153,  161 

DavcMiport ';.  Lines,  72  Conn.  118;  44  Atl.  17 241 

Davenport  Nat.  Bank  r.  Davis,  43  la.  424:  15  N.  W.  8G5 80 

Davis  y.  Company,  ^7  Ala.  633;  6  So.  140 52,63 

Davis  V.  Company,  2  Utah,  74 108 

Davis  r.  Comiianv,  77  .Md.  35;  25  Atl.  982 99 

Davis  Bros.  v.  Company.  101  Ala.  127;  8  So.  490 122,128,135 

Davis  Provision  (^o.  >•.  Fowler  P.ros.,  16"i  N.  V.  580 196 

Dav  v.  Comj)anv,  107  N.  Y.  29;  13  N.  E.  765 335 

Da>  !•.  Company,  Tola.  694;  38  N.  W.  113 46,147,152 

Debman  1-.  Company,  126  N.  C.  831  ;  36  S.  E.  209 199,339 

Deb.,  el«v,  Co.  I'.  Ponsaukfii,  116  Fed.  910 328 

DeLaccy  v.  Company,  I  Hawks  (N.  C  ),  274 61 

Delaf)(d<l  r.  Illinois,  2  Hill  (N.  Y.),  172        110 

De  La  VerL'ne  Refrigerating  Machine  Co.  r.  Ccr.  Sav.  In.,  175  U.  S.  40;  20 

S.  Ct.  21)         .....  36,37,144 

Dcdawnre  R.  R.  Tax,  85  U.  S.  206 20(1,204 

Delaware  Ry.  Co.  r.  Tbarp,  1  Hou.st.  (Del  )  119 46,147 

Demarest  »J.  Flack,  128  N.  Y.  205;  28N.  E.  6J5 182,  185,  187,  836 

Denike  y.  Companv,  80  N.  Y.  500       157,100 


Xxil  TABLE   or   CASES. 

Densinoro  Oil  Co.  c.  Densnioro,  64  Pa.  St.  4.> 13,14,08 

Dent  r.  Wfst  Virginia,  12'.)  U.  S.  114;  32  L.  E.  G23 103 

Doriiitror's  Aiim'r  c.  Deringer's  Ailin'r,  5  lloust.  416 247 

Dotroit  Clianiber  of  Comnierce  v.  Ganlner,  10'.)  Midi.  091 ;  07  N.  W.  897  .  .  68 
Detroit  Chamber  o£  Commerce  v.  State  Secretary,  109  Midi.  091;  07  N.  W. 

8'.'7 ' 41,  147 

Detroit  Citizens'  Street  Ry.  Co.  v.  Conmion  Council,  125  Mich.  673;  85  N.  W. 

90 32,52 

Dexterr.  McClellan,  116  Ala.  37;  22  So.  461 213 

Diamond  Match  Co.  !'.  Powers,  61  Midi.  145 182 

Dickinson  v.  Northern  Trust  Co.,  80  Fed.  452 125 

Dispatch  Light  Packet  Co.  r.  Company,  12  N.  II.  205 101 

Dittman  v.  Company  (N.  J.),  54  Atl.  570 16 

Doernhedier  !•.  Company,  21  Ore.  573;  28  Pac.  899 350 

Donald  r.  Company,  61  "N.  J.  Eq.  458;  48  Atl.  780 138 

Doty  ('.  Patterson,  155  Ind.  00 ;  56  N.  E.  608 28,266 

Douglass  !•.  Company,  118  N.  Y.  484;  23  N.  E.  806 61 

Doyle  r.  Company,  94  U.  S.  535 181,199 

DoVle  V.  Mizner,  42  Midi.  332  ;  3  N.  W.  968        79,  80 

Dozier  r.  A.  C.  Mills,  07  Ark.  11;  53S.  W.  403 228 

Drocge  r.  Company,  103  N.  Y.  400;  57  N.  E.  747 191 

Droit  witch  Pat.  Salt  Co.  v.  Curzon,  L.  R.  3  E.x.  35 67 

Drummond's  Case,  L.  K.  4  Ch.  Ap.  772 49,  113 

Dublin,  etc.  My.  Co.  v.  Black,  L.  R.  8  E.x.  181 71 

Ducat  V.  Chicago,  10  Wall.  (U.  S.)  415 181 

Dudley  v.  Collier,  87  Ala.  431 198 

Duggant'.  Company,  11  Col.  113;  17  Pac.  105 21,27,88,91,235 

Duke  I'.  Tavlor,  37  Ela.  04;  19So.  172 96,103,104,182,252,2.54 

Duluth  Club  V.  McDonald,  74  Minn.  254;  76  N.  W.  1128 48 

Dunbarton  Flax  Spinning  Co.  v.  Greenwich  &  Johnsonville  Ry.  Co.,  87  N.  Y. 

Ap.  Div.  21 106 

Dunlap  r.  R.auch,  24  Wash.  620;  64  Pac.  807 384 

Durfee  r.  Company,  5  Allen  (Mass.),  2.30 146,  149 

Durkee  v.  People,  155  111.  351;  40  N.  E.  620 57 

Durlacher  r.  Frazer,  8  Wy.  58;  55Pac.  .306 353 

-Dykraan  V.  Keeney,  160  N.  Y.  677 ;  54  N.  E.  1090 57,174 


E. 

E.  G.  L.  Co.  V.  Green,  49  N.  J.  Eq.  329 ;  24  Atl.  560 93,  326 

E.  W.  &  Mining  Co.  v.  Pierce,  90  Cal.  131 ;  27  Pac.  44 232 

E.  &  N.  Y.  C.  R.  R.  Co.  I'.  Owen,  32  Harb.  (N.  Y.)  616 12 

E.  &  S.  A.  M.  &  I.  Co.  r.  Hardy,  !)3Texas,  289;  55  S.  W.  169 199 

Eagle  Insurance  Co.  v.  State  of  Ohio,  158  U.  S.  440 105 

Kakins  y.  Company,  75  Mich.  508;  42  N.  \V.  982 206 

Eakriglit  v.  Company,  13  Ind.  404 67,  92 

East  N.  Y.  J.  R.  Co.  v.  Liglithall,  36  How.  Pr.  481        121 

Eastern  Plank  Road  Co.  v.  Vaughan,  14  N.  Y.  546       .....    27,  28,  54,  72,  109 

Eastern  Trust  &  Banking  Co.  v.  Willis,  6  I).  C.  Ap.  375 250 

Edison  Co.  (-•.  Canadian  Co.,  8  Wash.  .370;  30  Pac.  260 385 

Edwards  v.  Company,  27  La.  Ann.  474 125 

Edwards  i:  Denver  &  1{.  G.  R.  Co.,  13  Col.  59;  21  Pac.  1611 85 

Eggleston  i;  Doolittle,  33  Conn.  402 102 

Electric  L.  Co.  ('.  Rust,  117  Ala.  080;  23  So.  751 217 

Elevator  Co.  u.  Memphis,  etc.  Co.,  85  Tenn.  703;  5  S.  W.  52 45 

Elkins  V.  Company,  30  N.  J.  Eq.  2-33 326 

Ellerman  7;.  Ry.  Co.,  49N.  J.  Eq.  217;  23  Atl.  287 107 

Emert  v.  Mis.souri,  150  U.  S.  290 i206 

Empire  Mills  v.  Company  (Tex.  Ap.),  15  S.  W.  500 182 

Enterprise  Brewing  Co.  f.  Grime,  173  .Mass.  252;  53  N.  E.  855 295 

Enterprise  Ditch  Co.  I'.  Moffitt,  58  Neb.  042;  79  N.  W.  560 48,316 

Erie  R.  R.  r.  Pennsylvania,  158  U.  S.  437 209,  210. 


TABLE   OF   CASES.  XXIU 

Esgenv.  Smith,  113  1a.  25;  84  N.  W.  954 141 

Evans  u.  Lee,  11  Nev.  194 180,320 

Evans  v.  Pease,  21  R.  L  187 ;  42  Atl.  50(5 358 

Everetts  v.  Company,  20  Conn.  448 156 

Ewlng  V.  Company,  5(3  Cal.  649 232 

Ex  parte  Tisher,  20  S.C.  190 359 

Ex  parte  Frank,  52  Cal.  606 100 

Ex  parte  Holmes,  5  Cowen  (N.  Y.),  428 99 

Fx  parte  Pritz,  9  la.  30 10 

Ex  parte  Sprin?  Vallev  Water  Works,  17  Cal.  132 82 

^x/w/e  S.  &  W.  W..  17  Cal.  132 230 

Eyre  v.  Harmon,  92  Cal.  580 ;  28  Pac.  779 175 


F. 

F.  A.  A.  M.  Co.  u.  Tliies,  26  Nev.  158;  65Pac.  373 319 

F.  B.  Co.  V.  Wood,  14  Ga.  80 84 

F.  B.  D.  G.  Co.  V.  Lester,  60  Ark.  120 ;  29  S.  W.  34 192 

F.  C.  T.  Co.  v.  Flovd,  47  O.  St.  525;  26  N.  E.  110 176 

F.  G.  B.  &  T.  Co.  V.  Gade,  55  111.  181 87 

F.  L.  S.  Co.  V.  Clowes,  3  N.  Y.  470 53,  155 

F.  L.  T.  Co.  V.  H.  F.  N.  Co.,  41  N.  Y.  619 33 

F.  L.  &  T.  Co.  V.  Funck,  49  Neb.  358 ;  68  N.  W.  -520 316 

F.  M.  &Co.  y.  .McLeod,  8  Col.  Ap.  190;  45  Pac.  282 236 

F.  N.  Hank  c.  Company,  42  Minn.  327;  44  N.  W.  198 142 

F.  N.  Bank  v.  Company,  59  0.  St.  310  ;  52  N.  E  834       29 

F.  &  J.  yi.  Co.  V.  Foster,  4  Dak.  329 191 

Faircliild  v.  Association,  71  Mo.  526 32,  73 

Falconer  v.  Campbell,  8  Fed.  Cases,  4620 ;  2  .McLean,  195 30,  212 

Falls  u.  U.  S.  S.  L.  &B.  Co.,  97  Ala.  417;  13  So.  25 217 

Fargason  t'.  Company,  78  Mi.ss.  65;  27  So.  877 102,113,305,306 

Farmers'  Bank  v.  Company,  108  Ky.  447 ;  56  S.  W.  719 60 

Farmers',  etc.  Bank  v.  VVasson,  48  la.  336 47 

Farmers'  Loan  &  Trust  Co.  v.  Smith,  74  Conn.  025 ;  51  Atl.  609 243 

Farnswortii  y.  Robbins,  36  Minn.  369;  31  N.  W.  349 302 

Farr  f.  Bripgs'  Kstate,  72  Vt.  225;  47  Atl.  793 376 

Farrior  v.  N.  E.  M.  S.  Co.,  88  Ala.  275 ;  7  So.  200 217 

Faulds  V.  Gates,  57  III.  416 102,  103 

Fawcette  v.  Charles,  13  Wend.  473 61 

Featlierstoniiaufi;h  v.  Company,  L.  R.  1  Ex.  318 51 

Felker /•.  Company,  148  Mass.  226;  19  N.  E.  225 174 

Fertilizing  Co.  v.  Hyde  Park,  97  U.  S.  659 162 

Fey  V.  Company,  32  111.  Ap.  618 262 

Field  l:  Cooke,  16  La.  Ann.  153 77,  80 

Finch  V.  Uliman,  105  Mo.  255 24,  27 

Fink  V.  Company,  5  Ore.  301 29 

Finnegan  I'.  Noerenberg,  52  .Minn.  230;  63  N.  W.  1150 16,  88  301 

First  Ave.  Land  Co.  u.  Parker,  111  Wis.  1;  86  N.  W  004 392 

First  M.  K.  Church  y.  Dixon,  178  111.  260;  52  N.  E.  887 33 

First  Nat.  Bank  (•.  Company,  191  111.  128;  60  N.  E.  850 263 

First  Nat.  Bank  ;-.  Davies,  43  la.  424 270 

First  Nat.  Bank  I'.  King,  60  Kan.  733;  67  Pac.  952 276 

First  Nat.  15ank  y.  .N'at.  Ex.  Bank,  92  U.  S.  122 37 

First  Nat.  Bank  of  Peoria  r.  P.  W.  Co  ,  191  III.  128;  60  N.  E.  869 45 

Fisher  »;.  Parr,  92  .M<].  245;  48  Atl.  021 288 

Fitzhugii  ('.  Bank,  3  Monroe  (Ky.),  128 110 

Fitzpatrick  V.  D.  P.  Co.,  83  Ala.  604;  2  So.  727 214,215 

Flash  I-'.  Conn,  16  Fla.  428 109 

Fletcher '•.  Bank  (Ark.),  69  S.  W.  680 227 

Flint  V.  Pierce,  99  Mass.  68 99 

Fiorshcim  »;.  Bank,  192  111.  382;  01  N.  F.  491 263 

Florsheim,  etc.  Co.  (;.  Lester,  00  Ark.  120;  2!»S.  W.  34 191 


Xxiv  TABLE   OF   CASES. 

riovil  V.  X.  L.  &  T.  Co.,  40  W.  Va.  027  ;  38  S.  E.  G53 889 

Fosisr.  Hhiir,  i:i'.>  U.  S.  118;  35L.  K.  104 120,138 

Fobte  r.  Mank,  I'.M  111.  000;  02  N.  K.  834 263 

Ford  r.  Associiition,  155  111.  1()0 ;  3y  N.  K.  051 108 

Forrester  i-.  Compimv,  21  iMunt.  544;  55  Tac.  220;  74  I'ac.  1088 51 

Fortier  r.  Biuik,  112'U.  S.  43'J;  5S.  Ct.  234         28 

Foster  r.  liaiik,  10  Mass.  245 63 

Foster  i-.  Compaiiv,  5  S.  D.  67  ;  58  N.  W.  9 365 

Foster  I'.  Kansas,  "112  U.  S.  201;  28  L.  E.  209 155,103 

Foudic  r.  Bank  of  Rome,  llOGa.  827;  36  S.  E.  256 250 

Fox  r.  Coinpanv,  108  Cal.  478;  41  I'ac.  328 232 

Franco-Tox-as  Land  Co.  v.  Laigle,  50  Tex.  339 40,  90,  104 

Franklin  Hank  v.  ComnicTcial  Bank,  30  O.  St.  258 37 

Franklin  Bridge  Co.  v.  Wood,  14  Ga.  80 109 

Franklin  Conipanv  i".  Bank,  08  Me.  43 285 

Freeman  v.  Company,  38  Me.  343       96,  104,  285 

Freon  v.  Company,  42  O.  St.  SO 105 

Fritts  V.  Palmer,  132  U.  S.  288 184,  192 

Frost  r.  Company,  57  Minn.  325;  59  N.  W.  308 302 

Frost  Mfg.  Co.  r' Foster,  70  la.  635;  41  N.  \V.  212 271 

Frostbcrg  Min.  Co.  v.  Company,  81  Md.  28 176 

Fry's  Executors  i».  Company,  2  Mete.  (Ky.)  322 146 

Fuller  V.  Howe,  57  N.  Y.  23        173 


G.  B.  &  M.  R.  Co.  V.  Union  Steamboat  Co.,  107  U.  S.  98;  27  L.  E.  413      ...      15 

G.  I.  &  E.  Co.  r.  Toler,  80Md.  278;  30  Atl.  651       104,106 

G.  I.  R.  G.  M.  Co.  V.  G.  R.  Co.,  128  U.  S.  598 ;  9  S.  Ct.  166 14 

G.  L.  &  II.  I.  Co.  V.  Kamper,  73  Ala.  325 10,  28,  41,  216 

G.  L.  D.  Co.  V.  Perkins  (Texas),  26  S.  W.  256 54,  55 

G.  M.  &  S.  Co.  V.  RichanJs,  95  Mo.  106  ;  8  S.  W.  246 87,  92,  93 

G.  R.  B.  Co.  j;.  Rollins,  13  Col.  4;  21  Pac.  897 235 

G.  R.  L.  Co.  f.  Company,  6  N.  Dak.  276 ;  69  N.  W.  691 342 

G.&  A.  Co.  f.  Company,  46  Neb.  333;  64  N.  W.  978,  1097 316 

Gade  v.  Company,  165  111.  367  ;  46  N.  E.  286 93 

Gainey  v.  (iilson,  149Ind.  58;  48  N   E.  633 267 

Gale  Mfg.  Co.  v.  Finkelstein,  22  Tex.  Civ.  Ap.  241 191 

Galveston,  etc.  Ry.  Co.  v.  Cowdrey,  11  Wall.  459 ;  20  L.  E.  199   ..     .       40,  96,  104 

Gamble  v.  Q.  C.  W.  Co.,  123  N.  Y.  91 ;  25  N.  E.  201 125,  130,  149 

Gans  r.  Switzer,  9  Mont.  408;  24Pac.  18 312,313 

Garnet  et  al.  v.  Richardson  et  al.,  35  Ark.  144 225 

Garrett  r.  Company,  113  Mo.  3.30;  20  S.  W.  905 143,  144,  .309 

Garrett  Ford  Co.  v.  Company,  20  R.  I.  189 198 

Garrison  v.  Howe,  17  N.  Y.  458 175 

Gary  y.  Company,  9  Utah,  464;  35  Pac.  494 112 

Gen.  Electric  Co.  v  Lima  Electric  Co.,  4  Ohio  Nisi  Prius  Rep.  167        ....     34t) 

Gent  V.  Company,  107  111.  652 87,  94,  95 

Gent  V.  M.  &  M.  I.  Co.,  107  111.  652 202 

George  iv  N.  K.  M.  Sec.  Co.,  109  Ala.  548;  20  So.  331       217 

German  Nat.  Bank  v.  K.T.  Co.,  19  Kv.  Law  Rep.  361;  40  S.  W.  458    ....     278 

Gerniania  Nat.  Bank  r.  Case,  99  U.  S.  628       172 

Gibbons  v.  Ogden,  9  Wheat.  1 161 

Gibbs  V.  Davis,  27  Fla.  531 ;  8  So.  6.33 252,  254 

Giddins,' y.  Uolter,  19  Mont.  263;  48  Pac.  8 174 

Gilbert  r.  Kndowment  Ass'n,  10  D.  of  C.  Ap.  316 250 

Gilchrist  v.  U.  II.  S.  &  S.  R.  Co..  47  Fed.  593 191,  192 

Gilkie,  etc.  Co.  V.  D.  T.,  etc.  Co.,  46Neb.  333;  64N.  W.  978 125 

Gill  1-.  Bavless,  72  Mo.  424 146 

Gillis  V.  Bailcv,  21  N.  IL  149       108 

Cithers  u.  Clarke,  158  Pa.  St.  610  ;  28  Atl.  232 174 


TABLE   OF   CASEa  XXV 

Glass  Co.  V.  Companv,  32  Ind.  376 41 

Glenn  f.  Hunt,  120  Mo.  330 ;  25  S.  W.  181       171 

Glenn  Falls  Paper  Co  r.  White,  18  Hun  (N.  Y.),  214        175 

Globe  Realty  Co.  v.  Wliitney,  lOG  La.  Ann.  257  ;  30  So.  745 282 

Gloucester  Ferrv  Co.  v.  Pennsylvania,  114  U.  S.  196 210 

Goddard  !-.  Crefields  Mills,  75Fed.  818;  21  C.  C.  A.  530 1118 

Goddard  i-.  Mercliants'  Ex.,  9  Mo.  A  p.  290 100 

Goldberry  f.  Carter,  100  Va.  438;  41  S.  E.  858 382 

Colder  I'.  Bres.^ler,  105  111.  419 147 

Goodrich  v.  Reynolds,  31  111.  490 121 

Gorder  v.  Connor,  56  Neb.  781 ;  77  N.  W.  383 316 

Gordon  i-.  Appeal  Ta.x  Court,  44  U.  S.  (3  How.)  133;  11  L.  E.  529    .     .     .     .   85,  203 

Gores  v.  Dav,  99  Wis.  276 ;  74  N.  W.  787 381-391 

Graham  v.  Companv,  118  U.  S.  161  ;  6  Sup.  Ct.  1009        98 

Granby  Co   r.  Richards,  05Mo.  106;  8  S.  W.  246  83,308 

Grand  Lodpe  r.  Graham,  96  la.  592;  65  N.  W.  837 15,31 

Grand  River  College  v   Robertson,  67  Mo.  Ap.  329       46 

Graves  f.  Brooks,  117  Mich.  424;  75  N.  W.  932 •     .     .     .     298 

Green  y.  Association,  105  La.  628;  15  N.  W.  935 199 

Green  v.  Hreard,  35  La.  Ann.  875 16 

Green  v.  Dcmis,  6  Conn.  304 33 

Greenbrier  Ex.  y.  Hodes,  37  W.  Va.  738;  17  S.  E.  305 386 

Green  Co.  v.  Blod^jett,  55  111.  Ap.  556 32 

Greene  r.  Company,  62  O.  St.  67  ;  56  N.  E.  642 343 

Greene  v.  Mosten  el  <il.,  66  III.  App.  345 262 

Greenough  v.  Company,  64  Fed.  22 101 

Greenville  Compress  &   Warehouse  Co.  i-.    Companv,  70   Miss.   069;  13  So. 

879 ' 179,  304 

Greenwood  v.  Company,  105  U.  S.  13 153 

Grepory  v.  Bank,  3  Col.  322 237 

Griffin  i;.  Com[ianv,  Fed.  Cases,  5816 79 

Grindle  r.  Stone,  78  Me   176;3Atl.  183 285 

Grocer  Co.  v.  Crow,  36  Mo.  Ap.  288 309 

Grubb  V.  Company,  14  Pa.  St.  305 24 

Gulliver  r.  Roelle,  100  111.  141 13 

Gunn  y.  Company,  57  Ark.  24;  20  S.  W.  591 229 

Guntherr.  Company,  107  Ky.  44;  52  S.  W.  931 75,175 


II. 

H.  D.  P.  Ass'n  V.  Stevens,  34  Neb.  528 ;  52  N.  W.  508 68 

H.  F.  Rond  Co.  v.  Townsend,  13  Cnt.  Ap.  Rep.  534 13 

H.  M.  Co.  V.  Bremer,  12  R.  I.  491 85 

H.  W.  I  Co.  ;•.  N.  Y.  ILL  Co.,  HON.  Y.  94;  35N.  E.  417 84 

H.  &  N.  Ry.  Co.  V.  Croswell,  5  Hill  (N.  Y.),  383 147 

Haas  y.  Bank,  41  Neb.  754;  60  N.  W.  85 88 

Haas  r.  Hall,  111  Ala.  442;  20  So.  78 205,215 

Hackensack  Water  Co.  v.  l)e  Kay,  36  N.  J.  Eq.  518 27 

ILilbcrt  r.  Association  (Tex.  Civ.  Ap.),  34  S.  W.  630 13 

Hallf.  Companv.  91  Ala.  363;  8  So.  348 39,60 

Hall  V.  Granilali,  29  Cal.  567 100,  231 

Hall  v.  Engine  Co.,  91  Ala.  363;  8  So.  348 217 

Hall  r.  Henderson,  126  Ala.  440;  28  So.  531 30 

Hamilton  r.  Company,  15  Texas  Ap.33H;  39  S.  W.  on       369 

Hamilton  Trust  Co.  f.  Clemens,  163  N.  Y.  423;  57  N.  E.  614 67 

Hamlin  r.  R.  R.  Co.,  78  Fed.  070 42 

Hammer  r.  Comjiany,  130  U.  S.  291 199 

Hammond '•.  Strauss,  5;;  .Md.   1 73,98,113 

Hancock  Nat.  Bank  r.  Ellis,  160  Mass.  414;  41  N.  F.  319 292 

Haml  r.  Co.,  143  Pa.  St.  108;  22  Atl.  709 60 

Hnndley  v.  Stutz,  i:!9  U.  S.  417  ;  35  L.  E.  227      ...  40,  97,  101,  1 15,  120,  142,  114 

Hanna  f.  Company,  23  O.  St.  622 92,106,190 

Hannington  y.  Georgia,  161  U.  S.  299;  41  L.  E.  160 164 


XWl  TAHLK    OF    CASES. 

Hap  r.  Mill  Co.,  30  Mo.  Ap.  453 S08 

llanlinix  r.  American  Gliu-ose  Co.,  182  111.  551 ;  56  N.  E.  677     ...     .     40,  104,  UiS 

Har^linir  r.  Conipaiiv,  182  III.  661  ;  55  N.  K.  677 2G2,  203 

Ilar.lman  c.  Sniio,  124  N.  Y.  25;  2()N.  !•:.  :?54 109 

Harmon  r.  Hunt,  IIG  N.  C.  C78;  21  S.  E.  65!) 338 

Harmon  r.  Page,  02  Cal.  448 232 

Harrell  I'.  Rloiint,  112  Ga.  711  ;  38S.  E.  56 256 

Harrinsiton  (-.  Connor,  51  Neb.  214;  70  N.  W.  911 317 

Harris  V.  Ct.  L.  Co.,  128  Ala.  052;  29  So.  611 213 

Harris  r.  McGre{,'or,  29  Cal.  124 47,  66,  2:i0 

Hart  V.  Company,  40  Conn.  624 242. 

Hart  r.  Livermore  Co.,  72  Miss.  809;  17  So.  769 191 

Hartfonl  Fire  Ins.  Co.  t'.  Raymond,  70  Mid).  485;  38  N.  W.  74 199 

Harvov  r.  Company,  118  N.  C.  693;  24  S.  E.  489 105 

Haskell  r.  Kea.l  (Xcb.),  93  N.  W.  997 96 

Hasting  Malting  Co.  i-.  Company,  65  Minn.  28;  67  N.  W.  652       ....      125,  127 

Hastings  r.  Anaeortes,  etc.  Co.,  29  Wash.  224;  09  Pac.  776 40,84 

Hastinss  r.  Company,  29  Wasli.  224;  69  Pac.  776 382 

Hawes^'.  Anglo-Saxon  Co.,  101  Mass.  385 291 

Hawkins  f.  Company,  38  Ore.  544;  64  Pac.  320 350 

Hayden  v.  Atlanta  ('otton  Factory,  61  Ga.  233 256 

IlaVs  V.  Merklo,  70  Mo.  509 310 

Ha"y  ward  r.  Leeson,  176  Mass.  310;  57  N.  E.  656 295 

Hazelton  Boiler  Co.  y.  Company,  137  111.  231 ;  28  N.  E.  248      .......       14 

Hazelton  Boiler  Co.  r.  Company,  142  111.  494;  30  N.E.  339 15 

Heai.l  V.  Owen,  79  la.  23  ;  44  N.  W.  210 270 

Heath  v.  S.  L.  .Mining  Co.,  39  Wis.  140 98,  391 

Heck  y.  McEwen,  12  Lea  (Tenn.),  97 54 

Heggie  v.  Association,  107  N.  C.  681  ;  12  S.  E.  275 337 

Heileman  Co.  v.  Peimeisl,  85  Minn.  121 ;  88  N.  W.  441 304 

Hoinegf.  Company,  81  Ky.  300;  5  Ky.  L.  Rep.  281 80 

Hellerman  f.  Maier,  116  Cal.  416;  48  Pac.  377 120 

Heminway  y.  Heminway,  58  Conn.  443;  19  Atl.  766 IGQ,  242 

Henderson  f.  Turngreen,  9  Utah,  432;  35  Pac.  495 374 

Hendrix  i'.  Academy  of  Music,  73  Ga.  437  .     .     .    '. 68,  72,  82 

Hener  v.  Carmichael,  82  la.  288 ;  47  N.  W.  1034 75 

Hennesey  r.  Muhleman,  40  N.  Y.  Ap.  Div.  175 ;  57  N.  Y.  S.  854 62 

Henry  v.  Gt.  Northern  Ry.  Co.,  4  K.  &  J.  1  ;  27  L.  J.  Ch.  1 46 

Heqnembourgu.  Edwards,  155  Mo.  514;  65  S.  W.  490 175,176 

Ilerrod  i-.  Hamer,  32  Wis.  162 93 

Hessler  v.  Company,  61  0.  St.  621  ;  56  N.  E.  469 342 

Heuer  v.  Carmichael,  82  la.  288  ;  47  N.  W.  1034 75,  270 

Higgins  V.  Lansin^h,  154  Hi.  301 ;  40  N.  E.  362 45 

Higgins  Co.  u.  Higgins  Soap  Co.,  144  N.  Y.  462 ;  39  N.  E.  490 15 

Hill  V.  Beach,  12  N.  J.  Eq.  31 185 

Hill  I'.  Nisbet,  100  Ind.  341 37,  38 

Hilles  V.  Parrish,  14  N.  J.  Eq.  380 103,  104,  325 

Hinckleye^a/.  u.  Pfiesterfi<a/.,  83  Wis.  64;  33  N.  W.  21 393 

Hockett  1-.  State,  105Ind.  250;  6N.  E.  178 269 

Hodgson  V.  Company,  46  Minn.  464  ;  49  N.  W.  197 40,  96,  103,  104 

Holden  1-.  Harden,  169  U.S.  366;  42  L.E.  780 163 

Hole  I'.  Walker,  31  la.  344 172 

Holladay  v.  Elliott,  8  Ore.  85 349 

Hollingsworth  v.  Sou.  R.  R.  Co.,  86  Fed.  353 361 

Hollmani-.  Company,  9  0.  &  J.  (Md.)  462 99 

Holman  V.  State,  105  Ind.  569  ;  5  N.  E.  702 24,91,160,268 

Holmes  v.  Gilliland,  41  Barb.  (N.  Y.)  568 iifi,  28,  80 

Home  Ins.  Co.  v.  People  of  State  of  N.  Y.,  134  U.  S.  594;  10  S.  Ct.  693;  33 

L.E.  1024 84,204,205 

Hood  u.  Company,  42  Conn.  112 ^9 

Hoodr.  McNaughton,  54N  J.  L.  425;  24  Atl.  497 171,173,326 

Hook  V.  Gt.  Western  Ry.  Co.,  3  L.  R.  Ch.  262 46 

Hooper  v.  State  of  California,  155  U.  S.  648 ;  39  L.  E.  297 184,  207,  208 

Hope  Mut.  Fire  Ins.  Co.  v.  Beckman,  47  Mo.  93 147 

Hope  Mut.  Life  Ins.  Co.  v.  Perkins,  38  N.  Y.  404 191 


TABLE    OF   CASES.  XXVU 

Horn  Silver  Min.  Co.  i-.  New  York,  143  U.  S.  314    .     181,  192,  199,  200,  204,  205,  208 

Horn  Silver  Min.  Co.  I'.  Ryan,  42  Minn.  196;  44  N.  W.  5(5 175 

Hornor  v.  Henning,  93  U.  S.  228 175 

Horton  i-.  Wilder,  48  Kan.  222  ;  29  Pac.  566 102 

Hospes  y.  Company,  48  Minn.  174;  50  N.  W.  1117 114,124,126 

Houston  V.  Jefferson  CoUese.  63  Pa.  St.  428 58 

Howard  v.  Association,  125  N.  C.  49 ;  34  S.  E.  199 339 

Howe  r.  Scarboroua;h  (Ala.),  35  So.  113 101 

Hoyt  V.  Quicksilver  ]\Iinin<r  Co.,  78  N.  Y.  159 45 

Hoyt  V.  Thompson,  etc.,  10  N.  Y.  207 108 

Huffman  v.  Company,  13  Tex.  Civ.  Ap.  100 180,  199 

Hughes  y.  Bank,  5  Litt.  (Kv.)  45 88 

Hughes  I'.  Companv,  34  Md'.  310 17,  68,  73,  79 

Hughes  V.  Parker,  20  N.  H.  58 74 

Hughesdale  Mfg.  Co.  v.  Vanner,  12  R.  I.  491 160,  178 

Huguenot  Nat.  Bank  v.  Stud  well,  6  Daly  (N.  Y.),  713 107 

Humaston  v.  Company,  20  Wall.  20 125 

Humphreys  v.  .Mooney,  5  Col.  282 40,  79,  80,  87,  92,  96,  08,  235,  236 

Hunt  V.  Company,  11  Kan.  412 92 

Hunter  v.  Company,  26  La.  13 102 

Huntington  r.  Attrill,  118  N.  Y.  365;  23  N.E.  544 174 

Hurlbut  V.  Marshall,  02  Wis.  590  ;  22  N.  W.  852 67,  101 

Hurt  V.  Salisbury,  55  Mo.  310 80,  87,  93,  173,  308 

Hutton  V.  Scarborough  Hotel  Co.,  2  Drew.  &  Sim.  514 45 


I. 

L  O.  of  F.  «.  Commissioner,  98  Wis.  94;  73  N.  W.  326 390 

I.  T  ,  etc.  Co.  V.  Herkimer.  40  Ind.  142 87 

L  W.  C.  Co.  V.  Pearson.  140  111.  423;  31  N.  E.  400 84 

I.  &  E.  Co.  V.  Locke,  50  Ala.  332 216 

Illinois  Watch  Case  Co.  v.  Pearson,  140  111.  423  ;  31  N.  E.  400 84 

Independent  Medical  College  1-.  People,  182  111.  274;  55  N.  E.  345 203 

Indiana  Bond  Co.  i;.  Ogle  e<«/.,  22  Ind.  Ap.  593;  54  N.  E.  407  .     .     .     .       16,20,205 

Indianafiolis  Min.  Co.  v.  Herkimer,  42  Ind.  142    .     .     .    , 80 

Industrial  Mut.  Dep.  Co.  v.  Cen.  Mut.  Dep.  Co.,  23  Ky.  L.  Rep.  2247  ;  66  S.  W. 

1032 15 

In  re  A.  A.  Griffing  Iron   Co.,  63  N.  J.  L.  168,   357;    41  Atl.  931;  40   Atl. 

1097 46,  76,  103,  107 

In  re  Application  for  charter,  10  Phil.  Rep.  130 54 

/»!  re  Application  for  charter,  27  Wk.  Notes  of  Cases  (Pa.),  399 13 

In  re  Application  for  ciiarter,  5  Pa.  l)is.  Rep.  243 83 

In  re  Association,  10  Pa.  Co.  Ct.  Rep.  25 67,  83 

In  re  Barneds  Bakery  Co.,  L.  ]^  2  Ch.  674 24 

In  re  Benefit  Society,  10  I'hil.  19 29 

In  re  British  Su<;ar  Refining  Co.,  3  K.  &  J.  408 96 

/h  re  Century  Club,  27  W.  N.  C.  399 13 

In  re  Charter  Acknowledgment.  28  Pa.  Co.  Ct.  Rep.  187 79 

/>i  re  Churcli,  etc.,  14  I'hil.  121 80 

/rt  re  County  Palatine  L.  &  I).  Co.,  L.  R.  9  Ch.  691 49 

In  re  Cressina  Building  Association,  1  Leg.  Reg.  (Pa.)  177 110 

In  re  I)u  Qucsne  College,  2  Pa.  Dis.  Ct.  Itep.  555 39 

/n  re  Du  Quesne  College  Charter,  12  Pa.  (^o.  Ct.  Rep.  491 83 

In  re  Enterprise  Mut.  Ben.  Ass'n,  10  Pa.  380 82 

In  re  Excflsior  Fire  Ins.  ('o.,  16  Abh.  Pr.  8 103 

In  re  (icrmania  Sangcrbnnd,  12  I'a.  Co.  Ct.  Rep.  89 07 

/n  re  fiibbs  Estate.  157  Pa.  St.  5'.);  27  Atl.  383 88 

7n  re  IloveyV  Estate,  198  Pa.  St.  385;  48  All.  311 356 

In  re  Italian  Mutual  Benefit  Society,  4  Pa.  Dis.  Hep.   357 9 

In  re  John  II.  Dcveaux  et  a!.,  54  Ga.  073 15,  20,  82 

In  re  Journalistic  Fund,  8  Phil.  212 17 

In  re  Klaus,  67  Wis.  401  ;  20  N.  W.  582 47,  100 

In  re  Lady  Bryan  Co.,  1  Saw.  349 12 


Xxviii  TAHLE    OF   CASES. 

lu  n-  L.  IV  Co..  1  San.  340 '  ....  318 

/»  iv  I.ij;lithall  Mfu'  (\>.,47  Ilun. '258 103 

//in' Lincoln  Co.,  100  I'a.  St.  121;  42  Atl.  638 150 

Jn  re  M.  &  11.  Kv.  Co.,  10  Wend.  135 103 

//i  »>>  Me(;raves  Estate,  111  N.  Y.  60       33 

/n  reN.  I.  K.  Co.,  142  I'a.  St.  450;  21  Atl.  870 84 

7/1  re  Pennsvlvania  Hottlins  Co  ,  10  Pa.  Co.  Ct.  Rep.  503 46 

In  re  Philadelpliia  Artisans  Institute,  18  riiil.  220 109 

/n  ;r  Prospe.t  I'aik  &  Conev  Island  l\v.  Co.,  07  N.  Y.  371 170 

In  re  Sliakopee,  etc.  Co  ,  97  "iMinn.  01 ;  3:'.  N.  W.  219 87,  03,  109 

//I  re  South  Mountain  Con.  Mining  Co.,  8  Saw.  3GG;  7  Saw.  30 131 

/n  re  Soweuo  Water  Co.,  38  VV.  N.  C.  (Pa.)  148 80 

In  re  Spring'  ^■al!ey  Water  Co.,  17  Cal.  lo2 05 

In  re  St.  Helen  Mill  Co.,  13  Saw.  02 107 

In  re  St.  Lawrence  Steamboat  Co.,  44  N.  J.  L.  520 103 

/«;•<■  Stevedores  Beneficial  Ass'n,  14  Phil.  (Pa.)  130 169 

/nreU.  S.  M.  Rep.  A^'cncy,  115N.  Y.  170;  21  N.  E.  1034 41 

In  re  Wraffcr,  L.  R.  1  Ch.  796 140 

Instone  r.  Company,  2  Bibb.  (Ky.)  578 JO 

Insurance  Co.  f   Kamper,  73  Ala.  325 41 

Insurance  Co.  v.  N.  II.  P.  Co.,  37  La.  Ann.  233 13 

Int.  Trust  Co.  V.  Company,  70  N.  H.  118;  40  Atl.  1054 63 

Inter.  Trust  Co.  V.  Company,  3  Wy.  803;  31  Pac.  408 305 

Iron  Co.  et  al.  v.  Hays  et  al.,  165  Pa.  St.  489 ;  30  Atl.  936 122,  132 

Iron  Silver  Minin!?  Co.  v.  Cowie,  31  Col.  450 ;  72  Pac.  1007 239 

Irvine  v.  MoKeon,'  23  Cal.  472 '^32 

Irvine;-.  Turnpike  Co.,  2  Pen.  &W.  (Pa)  466 147 

Irvine  Co.  v.  Bond,  74  Fed.  819       40 

Isle  Royale  Land  Corporation  v.  Secretary  of  State,  76  Mich.  162  ;  43  N.  W.  141  181 


J. 

J  B.  Farrell  Co.  v.  Wolf,  06  Wis.  10  ;  70  N.  W.  280 64 

J.  C.  G.  Co.  r.  Dwiuht,  20  N.  J.  Eq.  246 82 

J.  C.  M.  T.  Co.  V.  VViilhoit,  84  Fed.  514 198 

J.  N.  Bank  r.  C<mipany,  74  Texas,  421  ;  12  S.  W.  101 76 

J.  S.  L.  Co.  t;.  Cl.appell,  184  111.  539;  56N.  E.  530 191 

Jackson  v.  Company,  21  Utali,  1  ;  59  Pac.  238 '^74 

.Lmney  r.  Bank,  08'Ala.  515;  13So.  761 ,  •     „o° 

Jeffersonr.  Hewitt,  lO.-U^al.  624;  37  Pac.  638 ^43,  2o2 

Jefferson  Nat.  Bank  r.  Ccmipany,  74  Texas,  421  ;  2  S.  W.  101 08 

Jenkins  r.  Bradley,  104  Wis.  540;  80  N.  W.  1025 125 

.Jewell  V.  CompanV,  101  111.  57 27 

Johnsr.  People,  25  Mich.  499 «'.-''^ 

Johnson  w.Corser,  34  Minn.  355;  25  N.  W.  709 1'3 

Johnson  v.  Insurance  Co.,  132  Mass.  432 „■,    £, 

Johnsons.  Kessler,  70  la.  411;  41  N.W.  57 '1.271 

Johnson  r.  Mason  Lodge,  21  K.L.  P.  403;  51  S.W.  620 47,  7J 

Jones  V.  Bank,  10  Col.  464;  17  Pac.  272       -^-^ 

Jones  V.  Company,  21  Col.  263;  40  Pac. 
Jones  V.  Company,  20  Col.  417  ;  38  Pac.  700 


Jonesr.  Company,  21  Col.  263;  40  Pac.  457 88,  178,  2oo,  230 

Jonesw.  Compan'y,  20Col.417;  38Pac.  700 40 

Jones  V.  Company.  57  N.  Y.  196 fj 

Jones  V.  Dana,  24  P.arb.  .395 i  rV-  o-rt 

Jonesu.  Edson,  10  Kan.  Ap.  110;  62Pac.  249 ^''^' La 

Jones  f.  Pearl  M.  Co.,  20  Col.  417;  38  Pac.  700 f'^ 

Jones  r.  Whitworth,  94  Tenn.  602  ;  30  S.  W.  736 J2& 

Jones  V.  Williams,  139  Mo.  1  ;  40  S.  W.  353 108 

Jones  et  al.  v.  Jarman,  34  Ark.  323 ^^^ 


TABLE   OF   CASES.  XXIX 


K. 


K.  C.  H.  Co.  V.  Hunt,  57  Mo.  12G 72 

K.  &  R.  I  Co.  V.  Marsh,  17  Wis.  13 179 

Kaiser  y.  Bank,  56  la.  104;  8  N.  W.  772 79,173 

Kearney  v.  Andrews,  10  N.  J.  Eq.  70 33,  102 

Kc'llerman  f.  Maier,  116  Cal.  41(3;  48Pac.  377 143,232 

Kelley  t:  Clark,  21  .Mont.  291  ;  53  Pac.  959 125,  130 

Kelley  r.  Fletclier,  94  Tenn.  1 ;  28  S.  W.  1099 367 

Kennebec  Co.  v.  Company,  72  Mass.  204 40 

Kennebec  Ins.  Co.  v.  Augusta  Ins.  Co.,  6  Gray,  204 295 

Kennett  v.  Company,  68  N.  H.  432  ;  39  Atl.  585 47,  66 

Kent  V.  Clark,  181  III.  237 ;  54  N.  E.  967 175 

Kent  I.'.  Company,  78  N.  Y.  159;  12  Hun,  53 43,45,100 

Keokuk  Falls  Ins.  Co    t'.  K.  &  D.  M.  Co.,  5  Okla.  32  ;  47  Pac.  484 348 

Kephartr.  People,  28  Col.  73;  62Pac.  946 239 

Keyser  v.  Shuts,  29  Pac.  386 221 

Kilgore  y.  Smith,  122  Pa.  St.  48  ;  15  Atl.  698 191 

Kilhngsworth  I'.  Company,  18  Ore.  351 ;  23  Pac.  66 349 

Knnball  >:  Company,  157  Mass.  7  ;  31  X.  E.  697 183 

Kimball  y.  Company,  69  N.  H.  485;  45  Atl.  253 51,122,322 

Kimball  ?;.  Davis,  52  Mo.  194 310 

Kincaid  v.  Dwinelle,  59  N.  Y.  548 156 

KInston  v.  Stroud,  132  N.  C.  413  ;  43  S.  E.  913 20,  28 

Knapp,  etc.  Co.  I'.  Strand,  4  Wasli.  680;  30  Pac.  1063 26 

Ivuowies  V.  Beaty,  1  McLean,  41 30 

Knowles  v.  Sandercock,  107  Cal.  629  ;  40  Pac.  1047 37,  230 

Knox  I'.  C.  L.  Co.,  86  Ala.  180 ;  5  So.  578 215 

Kno.x  r.  Company,  86  Ala.  180;  5  So.  178 50 

Knoxvillc,  etc.  Co.  r.  City  of  Knoxville,  98  Tenn..l;  .37  S.  W.  883 44 

Kiioxville  Iron  Co.  y.  IIarl)ison,  183  U.  S.  13;  46  L.  E.  55 163 

Kreisel  c.  Distilling  Co.,  61  N.J.  Eq.  5;  47  Atl.  471 105 

Kroenert  v.  .Johnston,  19  Wash.  9G  ;  52  Pac.  605 113,  142 

Kruse  1-.  Dusenbury,  19  Wk.  Di.  (N.  Y.)  201        65,66 

Kruse  r.  Hunipert,  21  Ky.  Law  Hep.  985;  53  S.  W.  657  . 279 

Kulp  V.  Fleming,  65  0.  St.  321  ;  62  N.  E.  334 344 


L. 

L.D.  Co.  W.Massachusetts,  10  Wall.  (U.  S.)  566 31 

L.  G.  II.  T.  Co.  V.  Commissioners,  6  Kan.  245 182 

L.  H.  15ank  v.  Spires,  12(3  Cal.  541  ;  58  Pac.  1049 233 

L.  O.  A.  Ky.  Co.  v.  Mason,  Ki  N.  Y.  451 71,  79 

L.  V.  C.  Co.  V.  Hamblen,  23  Fed.  225 14 

L.  &  N.  Ry.  Co.  V.  Kentucky,  161  U.  S.  677  ;  40  L.  E.  849 38,  162 

Lafayette  Ins.  Co.  r.  Frencli,  18  How.  (U.  S.)  404 180,181 

L;igronc  r.  Timmermaii,  4(3  S.  C.  372;  24  S.  E.  290 37 

Lake  Ontario,  etc.  R.  Co.  c.  Mason,  16  N.  Y.  451 113 

Lake  Superior  Co.  v.  Morrison,  22  (Canada  U.  C.  C  P.  224 24,  89 

L:ike  Superior  Iron  Co.  i;.  Drexel,  90  N.  Y.  87 122 

Lake  View  Land  Co.  v.  Cf)mpany,  95  Texas,  252;  (jG  S.  \V.  766 371 

Lamar  »;.  Rrowne,  92  U.  S.  187  ;  23  L.  E.  (1.50 13 

Lamb  y.  Lamb,  6  Biss.  420;  Fed.  Cases,  8018 191 

Lancaster  r.  Am.  Imp.  Co.,  140  X.  Y.  576;  35  N.  E.  904 190,  197 

LancMster  Starch  Co.  v.  Moore,  (32  N.  II.  (571        322 

Lander  v.  Burke,  65  O.  St.  532  ;  63  N.  E.  69        343,  345 

Landgrant,  etc.  Co.  v.  Coffey  Co.,  6  Kan.  245 185 

Lane  /•.  Bank,  9  Heisk   (Tenn.)  419 38 

Lanman  r.  Cotiipany,  30  Pa.  St.  42 38,  59 

Larsen  r.  JamoH,  1  Col.  Ap.  313;  29  Pac.  183 237 

Lathrop  t:  Bank,  8  Dana  (Ky.),  114 32 


XXX  TAF.LE    OF    CASES. 

Launiiivj  r.  Galusha,  81  Ilun,  247  ;  30  N.  Y.  Sup.  7(57  ;  aiT\l  151  X.  Y.  G48 ;  45 

N.  i:.  n;w 332 

Lauraglin  Mills  r.  Hufi;  57  S.  C.  53;  35S.  E.  387 3(30 

Law  r.  Kioli,47  W.  Va.  1534;  35  S.  E.  858 58,155 

Lea  c.  Oompanv.  Hit  Ala.  271  ;  24  So.  28 215 

Lea.l  Co.  r.  Keinlianl,  114  Mo.  218:  21  S.  W.  488 30!) 

Leavitt  c.  Conipanv,  3  Utali,  205;  1  I'ac.  350 50 

Leaziire  c.  Ililk'sras,  7  Ser.  &  K.  (I'a.)  313        32 

Lee  c.  Imbrie,  13  Ore.  610  :  11  Pac.  270       . 350 

Lesreiulre  r.  Association,  45  La.  Anil.  OOS) ;  12  So.  837 282 

Lel'siet  V.  N.  ,1.  M.,  etc.  Co.,  1  N.  J.  Eq.  541 30 

Leiiman  v.  Warner,  01  Ala.  455 89,  110 

Lesseps  v.  Architects  Co.,  4  La.  Ann.  316    ". 48 

Lewis  ('.  Moiiti;on>ery.  145  111.  30;  33  N.  E.  880 175  _ 

Lcwisburi;  Baptist  University  v.  Tucker,  37  W.  Va.  021 102 

L'llote  r.  New  Orleans,  77  U.  S.  587;  44  L.  E.  899 104 

Libhy  I'.  Company,  08  N.  H.  444;  44  Atl.  002 322 

Libby  V.  Toby,  82  Me.  397  ;  19  Atl.  904 286 

Library,  etc.  Co.  r.  Association,  173  Pa.  St.  30;  33  Atl.  744      .......     106 

License  Cases,  5  IIow.  404 .      161,  208 

Liebke  t'.  Knapp,  79  iMo.  22 50,113,121,188 

Lillard  v.  Company,  14  Tex.  Civ.  Ap.  67  ;  30  S.  W.  792 75 

Lincott  (frt/.  r.  Company,  08  N.  II.  260;  44  Atl.  392 322 

Linkaufr.  Lombard,  137  N.Y.  417;  33  N.E.  472 64 

Litchfield  Rank  r.  Church,  29  Conn.  137 24 

Liverpool  Ins.  Co.  v.  Massachusetts,  10  Wall.  576 199,  208 

Livesey  v.  Company,  5  Neb.  50 71 

Lockhart  i'.  Van  Alstyne,  31  Mich.  76 44,  45,  103 

London,  etc.  Hank  v.  Parrott,  125  Cal.  472  ;  58  Pac.  164       75 

Lothrop  fM(/.  y.  Stedman  e?  «/.,  Fed.  Cases,  8519 153,164 

Loudy.  Company,  153  U.  S.  564;  141  S.  Ct.  928 121 

Louisiana  Savin<is  Bank,  35  La.  Ann.  190 283 

Louisville  Banking  Co.  i;.  Eisenman,  94  Ky.  83;  21  S.  W.  531,  1049      ....       14 

Love  V.  P.  &  J.  Co.,  3  Pen.  577  ;  52  Atl.  542 247 

Loverin  r.  McLaughlin,  161  111.  417;  44  N.  E.  99 87,175 

Lowe  V.  Com|)anv,  52  Cal.  GO 183 

Lucas  V.  Bank,  2"Stew.  (Ala.)  147 88,  217 

Lucas  V.  Pitney,  27  N.  J.  L.  221 60 

Lumbard  v.  Aldrich,  8  N.  H.  31 323 

Lusk  V.  Riggs  (Neb.),  97  N.  W.  1033 11 


M. 

M.  B.  C.  Co.  V.  Company,  89  Texas,  511 ;  39  S.  W.  1047 370 

M.  B.  Co.  iJ.  Company,  196  Pa.  St.  25;  46  Atl.  99 353,355 

M.  B.  Ry.  Co.  V.  Sullivan,  37  Ga.  240 46 

M.  B.  T.  Co.  V.  R.  G.  N.  Co.,  81  N.  Y.  Sup.  302 184 

M.  C.  Mills  I'.  Springs,  56  S.  C.  534  ;  35  S.  E.  222 .     .     .     300 

M.  C.  R.  Co.  v.  Melvin,  21  Minn.  339 303 

M.  F.  &  N.  Co.  i,'.  Hall,  121  Mass.  272 48 

M   F.  X.  Bank  y.  Harper,  61  Minn.  375;  63  N.  W.  1079       175 

M.  (;.  R.  Co.  V.  Wysong,  51  Ind.  12 75,  99,  100 

M.  I.  W.  C.  &  S.  Co.  V.  Mosher,  114  Mich.  04  ;  72  N.  W.  117 191,  297 

M.  L.  M.  &  S.  Co.  V.  Reinhard,  114  Mo.  218 ;  21  S.  W.  488    ....     .     40,  .308,  309 

M.  L.  T.  Co.  V.  Ward,  13  Ohio,  120 171 

M.  N.  T.  Co.  V.  Baunbach,  32  Fed  205 .       13 

M.  O.  &  R.  R.  Co.  w.  Cross,  20  Ark.  443 100 

M.  T.  Co.  V.  S.C,  etc.  Co.,  16  Wash.  499;  48  Pac.  333 125 

M.  T.  &  F.  Co.  V.  D.  T.  &  T.  Co.,  44  N.  ,J.  Eq.  568  ;  14  Atl.  907 325 

M.  &  O.  Ry.  Co.  V.  P.  T.  C.  Co.,  120  Ala.  21 ;  24  So.  408 213 

M.  &,  O.  R.  R.  Co.  V.  State,  29  Ala.  573 216 

M.  &  L.  R.  Ry.  Co.  i:  Dow,  120  U.  S.  287 ;  7  S.  Ct.  482 122,  123 


TABLE   OF   CASES.  XXXI 

MacGinniss  f.  Company  (Mont.),  75  Pac.  89 60,139,107,183 

Machine  Co.  v.  Caldwell,  54  lud.  270 -^j^ 

Mack  I'.  De  Bardeleben,  etc.  Co.,  90  Ala.  396 ;  8  So.  150 iO,  98,  104 

Mackintosh  r.K.  R.  Co.,  32  Fed.  350;  54  Fed.  582 45,103 

Madden  o.  Company,  199  Fa.  St.  454 ;  49  Atl.  290 3o() 

Maine  v.  Rv.  Co.,  142  U.  S.  227 205 

Mallet  V.  Simpson,  194  X.  C.  37 3o 

Mandel  v.  Company,  154  111.  177  ;  40  N.  E.  462 101 

Manhattan  Trust  Co.  1-.  Company,  16  Wash.  499;  48  Pac.  333 128 

JNlarch  v.  Eastern  R.  R.  Co.,  43  N.  H.  515 4o,  322 

Mariners  v.  Sewall,  50  Me.  220  ....     ._ ^^2 

Marion  Saviiiijs  Bank  v.  Dunkin,  54  Ala.  471 2/ 

Market  St.  Ry.  Co.  y.  Hellman,  109  Cal.  571;  22  Pac.  225 33 

Marshall  (;.  Sherman,  148  N.  Y.  9;  42  N.  E.  410 1<3 

Martin  v.  Association,  2  Coldw.  (Tenn.)  418 33 

Martin  v.  Deetz,  102  Cal.  55 :  3(3  Pac.  368 87,  93,  231 

Martin  v.  R.  R.,  151  U.  S.  677 208 

Martin  v.  Zellerbach,  38  Cal.  300 51,  232 

Maryin  y.  Anderson,  111  Wis.  387  ;  87  N.  W.  226 39o 

Mason  v.  Company,  25  Fed.  882 o3,  loo 

Matter  of  Agudath  llakehiloth,  18  N.  Y.  Misc.  Rep.  717;  42  N.  Y.  Sup.  98o      .       29 

Matter  of  Brooklyn  Elevated  Ry.  Co.,  125  N.  Y.  434 ;  26  N.  E.  474 157 

Matter  of  Davies',  168  N.  Y.  89;  61  N.  E.  118 334 

Matter  of  Germicide  Co.,  65  Ilun,  606;  20  N.  Y.  Sup.  495 105 

Matter  of  Globe,  etc.  Ass'n,  1-35  N.  Y.  280 ;  32  N.  E.  122 13 

Matter  of  Prospect  Park.  etc.  Ry.  Co.,  67  N.  Y.  371 38 

Matterof  Stein  way,  159  N.  Y.  250;  53  N.  E.  1103       166,384 

Matter  of  Townsend,  46  N.  Y.  St.  Rep.  135 lOo 

Matter  of  White,  45  Hun,  580 lOo 

Matthews  u.  Gt.  Xortliern  R.  R.  Co.,  L.  R.  28  L.  J.  Ch.  375 4o 

Matthews  r.  Patterson.  16  Col.  215;  26  Pac.  812 236,237 

Ma.xwell  y.  Akin,  89  Fed.  180 310 

May  berry  v.  Meade,  80  Me.  87  ;  12  Atl.  635 48 

McBryan  y.  Company.  130  Mich.  Ill;  89  N.  W.  653 298 

McCa'll  '•.  Company,  6  Conn.  428 40,  241 

McCandless  y.  Company,  115  Ga  968;  42  S.  E.  449 2o5 

McCanna  &  Fraser  Co.  v.  Citizens'  Trust  &  Sur.  Co.,  76  Fed.  420 ;  24  C.  C.  A.  11     3o6 

McClinch  i>.  Sturges,  72  Me.  288 27,  96 

McComb  17.  Association,  10  N.  Y.  Sup.  552 101 

McConnell  r.  Company  (.Mont.),  74  Pac.  194 47 

McCoy  ".  E.Kposition,  186  111.356;  57  N.  E.  1013 203 

McDaniel  r.  Company.  22  Vt.  274 103 

McDaniel  v.  Harvey,  51  .Mo.  Ap.  198 -^00 

McDonouj,'li  .'.  Murdocii,  15  How.  (U.  S.)  413 182 

McGinty  (,-.  Company,  155  Mass.  183;  29  N.  E.  510 08 

McGregor  v.  Ins.  Co.,  33  N.  J.  Eq.  181 44,  326 

McGrewy.  C.  P.  Ex.,  85  Tenn.  572;  4S.  W.  38 29 

McKeev.  Company  (Iowa),  98  N.  W.  609 49 

McKim  y.  Odom,  8  BlandsCh.  (Md.)  407 10 

McKleroy  t;.  G.  L.  I.  Co.,  126  Ala.  184;  28So.  060 210 

McLaren  v.  Pennington,  1  Paige  (N.  Y.),  102 72 

McLeody.  Am.  F.  L.  M.  Co.,  100  Ala.496;  14SO.409 217 

McMahon /;.  Macey,  51  N.  Y.  155 1'2 

McNaughton  (;.  McGirl,  20  Mont.  124;  49Pac.  051 31„ 

McNeal  Pipe,  etc.  Co.  '?.  Bullock,  174  Pa.  St.  93;  34  Atl.  594 3o4 

McNeely  v.  Woodruff,  13  N.  J.  L.  3-52 37,  9!) 

McSherry  »•.  Company,  97  Cal.  637  ;  32  Pac.  711 00 

McVicker '•.  Common  wealth,  21  Ore.  353;  28  Pa.  76 349 

Meares  »;.  Improvement  Co..  126  N.  C.  662;  36  S.  E.  130 337 

Meciianics'  Hank  y.  (^)mpany.  13  N.  Y.  599 68,  /2,  110 

Meclianics'  Bank  r.  Smith,  19  .lolins.  (X.  Y)   115 33 

Medler  r.  Company,  6  X.  M.  331  ;  28  Pac.  551 329 

Merc.anrile  Statement  Co.  »•.  Kneal.  51  Miim.  26H;  .53  N.  W.  632       .     .     .     .46,148 

Mercantile  Tr.  Co.  r.  Elsa  Iron  Work.s.  4  Ohio  Cir.  Ct.  679 344 

Meredith  v.  Company,  59  X.  J.  Eq.  257  ;  44  Atl.  65 46,  60 


XXxii  TABLK    OF    CASES. 

Merrick  r.  Van  Saiu'oort,  34  N.  Y.  2)8       185 

Morriit  r.  Ferris,  22  III.  ;!0.J 101 

Metcalfe.  A.  S.  F.  Co.,  1-2'i  Fed.  11;') 51 

:\letroi)olit!in 'IVl.  Co.  c.  Companv,  44  N.J.  Kq.  008;  11  All. 'J07 108 

Miles  r.  Woodward,  115  Cal.  ;;0S;  4(3  I'ac.  lOTG lUl) 

Milford.  etc.  Turnpike  Co.  c.  Briisli,  10  O.  St.  Ill 1  Ifl 

Miller  c.  Am.  .Milt.  Aeei.  Ills.  Co..  U2   renii.  107 HI 

Miller  c.  Hradish.  O'.l  la.  278;  28  N.  W.  51)4 271 

IMiller  r.  Company,  3  Ore.  25 o48 

:\Iil!er  c.  Coiupanv,  ;31  W.  Va.  836;  8  S.  E.  GOO 73 

Miller  r.  Ewer,  27  Me.  509 !»5 

Miller  r.  Farrish,  14  N.  J.  Eq.  380 W 

.Miller  r.  Katteniian,  47  O.  St.  141  ;  24  N.  E.  496 45,  103 

Miller  r.  Williams,  27  Col.  34;  59  Fac.  740 I'.tl,  23'J 

l\Iil\vaukee  Trust  Co.  I'.  Ins.  Co.,  100  La.  Ann.  (369;  31  So.  298 283 

Miner  r.  Bank,  1  Feters  (U.  S.),  407;  7  L.  E.  47 71 

Miner  c.  Company,  93  Midi.  97;  53  N.  W.  218 53,158 

Miners  Ditoli  Co.  y.  Zellerbach,  37  Cal.  543 33,51,62 

IMininir  Co.  v.  Bank,  2  Col.  248 235 

Minn.,'"etc.  Co.  v.  Denslow,  40  Minn.  171 ;  48  N.  W.  771 40 

Missouri  Coal  Mining  Co.  r.  Ladd,  160  Mo.  435;  01  S.  W.  191 I'.ll 

Missouri  Lead,  etc.  Co.  f.  Reinhard,  114  Mo.  218;  21  S.  W.  488 100 

Mitchell  V.  Vt.  Copper  Min.  Co.,  40  N.  Y.  Sup.  Ct.  406 90,  100,  104 

Mobile  V.  Eulee,  20  Ap.  Div.  (N.  Y.)  548 

Mobile  V.  Youille,  3  Ala.  137 33 

Mobile,  etc.  Ky.  Co.  I.-.  Nicholas,  98  Ala.  92;  12  So.  723 49,103,105 

Mokelumne,  etc.  Co.  v.  Woodbury,  14  Cal.  424 88,  93 

Montgomery  v.  Company,  48  N.  Y.  Ap.  Div.  12;  62  N.  Y.  Sup.  (i06 ;  168  N.  Y. 

057;  61  N.  E.  1131 51 

Montijomery  I'.  Forbes,  148  Mass.  249;  19  N.  E.  342 6(),  80,  82,  185 

IMontgomery  v.  Merrill,  18  Mich.  338 157 

Moore  i\  Bank,  52  Mo.  377 47 

Moore  v.  Moore,  4  Dana  (Ky.),  354 33 

Moore  v.  State,  71  Ind.  478 158 

Moores  «.  Bank,  111  U.  S.  150;  4S.  Ct.  345 72 

Morgan  y.  Lewis,  46  O.  St.  1;  17  N.  E.  558 36 

Morris  v.  Hall,  41  Ala.  510 217 

]Morris  v.  May,  10  ( ).  469 33 

Morrison  .;.  Clarke,  24  Mont.  515;  63  Fac.  98 311 

Morriss  v.  Cheney,  51  111.  451 60 

Morrow  v.  Edwards,  9  Mackey,  475 250 

Moses  y.  Scott,  84  Ala.  608;  4  So.  742 103,  1  (Jo 

Moses  V.  Tompkins,  84  Ala.  613;  4  So.  763 102,107 

Moss  V.  Averell,  10  N.  Y.  4 19 60 

Mowrey  y.  Company,  17  Fed.  Cases  No.  9891 ;  4  Bissell,  78     ....     59,  140,- 179 

]Mugler  r.  Kansas,  123  U.  S.  (523 162,1(^3 

Mumma  v.  Company,  8  Fet.  U.  S.  281 58 

Munn /;.  Illinois,  94  U.  S.  113;  24  L.  E.  77 102,163 

Munson  v.  Warren,  63  Kan.  102 ;  ()5  Fac.  222 275 

Muscatine  Turnverein  v.  Funck,  18  la.  409 156 

Musgrave  y.  Association,  5  Kan.  Ap.  393;  49  Fac.  338 276 


N. 

N.  C.  Bank  y.  McDonnell,  92  Ala.  387  ;  9  So.  149 213 

N.  C.  M.  Ry.  Co.  r.  Eslow,  40  Mich.  222 99 

N.  I).  Ry.  Co.  V.  Company,  120  Mass.  397       179 

N.  E.  T.  Co.  y.  Abbott.  102  Mass.  148;  38  N.  E.  432 36 

N.  11.  C.  &  M.  Co.  V.  Woodberry,  14  Cal.  434 86 

N.  H.  H.  N.  Co.  V.  Company,  142  Mass.  349;  7  N.  E.  773     .     .     .    125,  135,  143,  173 

N.  H.  &  I).  Ry.  Co.  V.  Chapman,  38  Conn.  56 242 

N.  M.  G.  T.  Co.  V.  N.  G.  T.  Co.,  21  Fa.  Co.  Ct.  Rep.  393       83 

N.  M.  N.  G.  Co.  y.  Smith,  27  Ind.  Ap.  472;  61  N.  E.  10 .  269 


TABLE   OF   CASES.  XXXill 

N.  M.  R.  "R.  Co.  V.  Winkler,  33  Mo.  354 308 

N.  M.  T.  S.  Co.  V.  Bisliop,  103  Wis.  492 ;  79  N.  W.  785 76,  99,  390 

N.  0.  &  R.  R.  Co.  V.  Frank,  39  La.  Ann.  707 ;  2  So.  310 28,  69 

N.  O.  &  T.  P.  Co.  V.  Bank,  24  Wk.  L.  Bui.  (Ohio)  198 110 

N.  P.  C.  I.  Co.  V.  Company,  16  Utah,  246;  52  Pac.  168 24 

N.  S.  C,  etc.  Co.  1-.  Field,  64  Fed.  151 184 

N.  S.  Co.  1-.  Horton  (Neb.),  93  N.  W.  225 37 

N.  S.  R.  Co.  V.  People,  147  III.  234 ;  35  N.  E.  608 65,  66 

N.  T.  E.  Co.  I'.  Coinpanv,  76  Minn.  334;  79N.  W.  315 300 

N.  W.  Co   1-.  Connell,  88  Hun  (N.  Y.),  254 

N.  Y.  N.  E.x.  Bank  y.  Crowell,  177  Pa.  313;  35  Atl.  613 87 

N.  Y.  N.  H.,  etc.  R.  Co.  v.  Schuyler,  34  N.  Y.  30 72 

N.  Y.  &  N.  E.  Ry.  Co.  v.  Town  of  Bristol,  151  U.  S.  556       154 

N.  &  S.  R.  S.  Co.  V.  People,  147  111.  234  ;  35  N.  E.  608 263 

Napier  v.  Poe,  12  Ga.  170        24 

Nashville  Bank  v.  Petway,  3  Hun  (Tenn.),  522 53 

Nassau  Bank  v.  Brown,  30  N.  J.  Eq.  478 109 

Nathan  v.  Tompkins,  82  Ala.  437  ;  2  So.  747        61,  102 

National  Bank  c.  Company,  41  0.  St.  1 78 

National  Lead  Co.  v.  Dickinson  (N.  J.),  57  Atl.  138 41,  177 

National  Tube  Works  v.  GillfiUan,  124  N.  Y.  302  ;  26  N.  E.  538 142 

Nat.  Cash  Register  Co.  y.  Wilson,  9  N.D.  112;  81  N.  W.  285 342 

Nat.  Trust  Co.  r.  Miller,  33  N.  J.  Eq.  155 326 

Natusch  V.  Irving,  1  Smith's  Cases  226 147 

Neb.  Nat.  Bank  I'.  Walsh,  68  Ark.  433;  59  S.  W.  952 227 

Nelson  i;.  Hubbard,  96  Ala.  238;  11  So.  428 53,213 

Nester  I'.  Company,  161  Pa.  St.  473;  29  Atl.  102 355 

Newcomb  v.  Reed,  12  Allen  (Mass.),  302 91,  92 

New  Orleans  y.  Insurance  Co.,  106  La.  An.  31;  30  So.  254 283 

New  York  State  v.  Roberts,  171  U.  S.  665 -  .     .     .    210 

Nickels  v.  P.  B.  &  L.  S.  Ass'n,  93  Va.  380 ;  25  S.  E.  8 382 

Nickum  v.  Burckhardt,  30  Ore.  464 ;  47  Pac.  788  ;  48  Pac.  474     ...     95,  349,  350 

Nicollet  Nat.  Bank  I'.  Company,  71  Minn.  413;  74  N.  W.  160        59 

Nicrosi  y.  Company,  115  Ala.  429;  22  So.  147 215 

Niemeyer  v.  L.  R.  J.  Ry.,  43  Ark.  Ill 28 

Nims  V.  School,  160  Mass.  177 ;  35  N.  E.  776 64 

NI.K  V.  Miller,  26  Col.  203  ;  57  Pac.  1084 237 

Norfolk,  etc.  R.  R.  v.  Pennsylvania,  136  U.  S.  120 210 

North,  etc.  Stock  Co.  v.  People,  147  111.  234 ;  35  N.  E.  608 40 

Northern  Securities  Co.  v.  United  States,  193  U.  S.  197 168 

Northern  Trust  Co.  v.  Company,  75  Fed.  936 115,  125,  142 

Norton  v.  Bank,  61  N.  H.  589 03 

Norton,  etc.  Co.  v.  Wysong,  51  Ind  4 56 

Novelty  Mfg.  Co.  v.  Connell,  88  Hun,  254 191 


o. 

O.  H.  Mfg.  Co.  V.  Carney,  54  N.  II.  295     75 

O.  .M.  Co.  y.  Garst,  18  H.  I.  484;  28  Atl.  973 40 

O.  R.  &  N.  Co.  V.  (J.  R.  Co.,  130  U.  S.  1 ;  9  Sup.  Ct.  409 349 

O.  W.  Co.  v.  Bliss,  132  Ala.  253;  31  So.  81 213 

O.  &  M.  Ry.  Co.  V.  State,  49  O.  St.  G68 ;  32  N.  E.  933       81,  103 

O.  &  .M.  R.  R.  Co.  V.  McPhorson,  .35  Mo.  13 308 

C).  &  \V.  T.  J.  Co.  V.  Rathburn,  5  Saw.  32 351 

Oakhill  .Mfg   Co.  v.  Garst,  18  R.  I.  484  ;  28  Atl.  973 190 

O'Brien  v.  Cummings,  13  Mo.  Ap.  197 23,  24,  71 

O'Brien  v.  Fulkerson,  75  Mich.  554 ;  42  N.  W.  979 69 

Ohio,  etc.  R.  R.  Co.  i;.  McPherson,  35  Mo.  13 06,  98,  100 

Olda  c.  Company  (.Mass.),  70  N.  K.  1022 62,156 

Ollesheimer  r.  Mfg.  Co.,  44  Mo.  Ap.  172 146,308,309 

Oorc-gum  Gold  Min.  Co.  1-.  Roper,  61  L.J.  Clian.  337 140 

O'itcilly,  Skelly  &  Fogarty  Co.  r.  Greene,  40  N.  Y.  360 .336 

Orient  Ins.  Co.  v.  Daggs,  173  U.  S.  560 181 


XXXiv  TABLE   OP  CASES, 

Ornisby  v.  Company,  56  N.  Y.  623 96,  98 

Or.  Kv.  &  Nav.  Co.  v.  Company,  130  U.  S.  1 ;  9  S.  Ct.  409 20,  28,  29,  77 

Osborne  v.  Ins.  Co.,  57  Vt.  278 377 

Otter  V.  Company.  50  Barb.  247 122 

Ouderkirk  f.  Bank,  119N.  Y.  263;  23N.  E.  876 176 


P. 

P.  B.  Corporation  v.  Lamson,  16  Me.  224 13 

P.  B.  L.  &  S.  Ass'n  v.  Berlin,  201  Pa.  St.  1 ;  50  Atl.  308 356 

P.  B.  L.  &  S.  Ass'n  v.  Mackley,  27  Ind.  Ap.  128 ;  60  N.  E.  1013 269 

P.  C.  S.  M.  &  C.  Co.  V.  Pennsylvania,  125  U.  S.  181 181,  199 

P.  Co.  V.  Company,  113  U.  S.  296 179 

P.P.  Co.  r.  Company,  64  Minn.  386;  67  N.  W.  217 302 

P.  G.  T.  R.  Co.  V.  Graham,  11  Mete.  (Mass.)  1 48 

P.  H.  S.  Bank  v.  Sup.  Ct.,  104  Cal.  649  ;  38  Pac.  462 104,  105 

P.  L.,  etc.  Co.  I'.  Pottland,  6  L.  R.  A.  295 64 

P.  R.  T.  Rd.  Co.  Charter  Application,  20  Pa.  Co.  Ct.  Rep.  151 83 

P.  S.  Bank  v.  Company,  105  Mich.  535 ;  63  N.  W.  514 120 

P.  T.  C.  Co.  y.  Company,  23  Utah  474;  65  Pac.  735 373 

P.  T.  S.  D.  I.  Co.  V.  P.  T.  Co.,  123  Fed.  534 16 

P.  W.  B.  R.  R.  Co.  V.  Bowers,  4  Houston,  506 161 

P.  W.  &  B.  R.  R.  Co.  V.  Kent  Co.  R.  R.  Co.,  5  Houst.  127 245 

P.,  etc.  P.  R.  Co.  V.  Griffin,  21  Barb.  454 57 

P.  &  G.  T.  Co.  1-.  Bobb,  88  Ky.  226  ;  10  S.  W.  794 87 

Pacific  Fruit  Co.  v.  Coon,  107  Cal.  447 ;  40  Pac.  542 142 

Pacific  R.  Co.  V.  Hughes,  22  Mo.  291 57 

Pacific  R.  Co.  V.  Renshaw.  18  Mo.  210 46,  147 

Packard  v.  Company,  168  Mass.  92  ;  46  N.  E.  433 96 

Page  V.  Heineberg,  40  Vt.  81 33 

Palmer  v.  Bank,  72  Minn.  266  ;  75  N.  W.  380 41 

Palmer  y.  Lawrence,  3  Sandf.  (N.  Y.)  161 113 

Park  V.  Grant  Locomotive  Works,  40  N.  J.  Eq.  114;  19  Atl.  62;  45  N.  J.  Eq. 

241 ;  3  Atl.  162 61 

Parkinson  Sugar  Co.  r.  Bank,  60  Kan.  474  ;  57  Pac.  126 273 

Parmalee  v.  Price,  208  111.  544  ;  70  N.  E.  725 115,  125 

Parsons  v.  Company,  25  Wash.  492  ;  65  Pac.  765 383 

Parsons  v.  Eureka  Powder  Works,  48  N.  H.  66 323 

Parsons  v.  Lent,  84  N.  J.  Eq  67 106 

Parsons  v.  Joseph,  92  Ala.  403 ;  8  So.  788 315 

Paschall  v.  Whitsett,  1 1  Ala.  472 315 

Patterson  v.  Stewart,  41  Minn.  84 ;  42  N.  W.  926 175 

Patterson  i-.  Thompson,  86  Fed.  85 ;  90  Fed.  647 350 

Paul  V.  Virginia,  8  Wall.  (U.  S.)  161 181,  199 

Payson  v.  Withers,  5  Bis.  269 ;  Fed.  Cases,  10,  864 191 

Pearce  t-.  Olney,  20  Conn.  544 242 

Pearce  v.  R.  Co.,  21  How.  441  ;  16  L.  E.  184 38,  52 

Pearsallr.  Company,  161  U.  S.  646;  40  L.E.  838 163 

Pembina  Min.  Co.  v.  Pennsylvania,  125  U.  S.  184 199,  201,  206 

Peninsula  Savings  Bank  (.-.'Company,  105  Mich.  535;  63  N.  W.  514      ....     144 

Pensacola  Teleg.  Co.  v.  Western  U.  Teleg.  Co.,  96  U.  S.  1 201 

People  V.  B.  &  R.  T.  Road,  23  Wend.  222 156,  159 

People  V.  Ballard,  1-34  N.  Y.  269 ;  32  N.  E.  54 51,  156 

People  V.  Bank,  129  111.  618 ;  22  N.  E.  288 262 

People  V.  Bank,  7  Col.  226;  3  Pac.  214 • 113 

People  V.  Bank,  6  Cowan  (N.  Y.),  211 160 

People  V.  Bank,  12  Mich.  526 160 

People  v.  Beach,  19  Hun,  259 28 

People  I'.  Chambers,  42  Cal.  201 71,  72,  82,  113 

Peoplei'.  Cheeseman,  7  Col.  376;  3Pac.  716 53,73,80,92,156,235 

People  V.  Chicago  Board  of  Trade,  40  111.  112 100 

People  V.  College,  38  Cal.  166 33 

People  V.  Company,  130  111.  268 ;  22  N.  E.  798 9,  29,  54,  69,  83,  84,  160 


TABLE   OF    CASES.  XXXV 

People  V.  Company,  111  Mich.  405 ;  69  N.  W.  653 14,  41,  83 

People  v.  Company,  55  Barb.  344 403 

People  V.  Company,  82  111.  457 100 

People  V.  Company,  97  Cal.  -270  ;  32  Pac.  23G 79,  92,  229,  230,  233,  235 

People  V.  Company,  45  Cal.  306 81,  110 

People  y.  Company,  175  111.  125;  51  N.E.  664 59 

People  r.  Company,  121  N.  Y.  582;  24  N.E.  834 38,81,159,160 

People  V.  CompanV,  153  111.  25 ;  38  N.  E.  752 40 

People  V.  Company,  60  How.  Pr.  82 160 

People  V.  Company,  70  N.  Y.  5G9 60 

People  r.  Company,  131  N.  Y.  140;  29  N.  E.  947 160,335 

People  V.  Company,  92  X.  Y.  105 179 

People  V.  Company,  129  N   Y.  474  ;  29  N.  E.  959 179 

People  V.  Company,  175  N.  Y.  76 1^2 

People  V.  Company,  45  Cal.  306 230,  231 

People  I'.  CompanV,  117  N.  Y.  241;  22  N.E.  1057 336 

People  V.  Crossley,  69  111.  195 49,  104 

People  1-.  Dashway  Ass'n,  84  Cal.  114;  24  Pac.  277 333 

People  y.  Eailie,  63  Hun,  820;  133  N.  Y.  573 166 

People  V.  Equitable  Trust  Co.,  96  N.  Y.  387 205 

People  V.  Feitner,  77  (N.  Y.)  Ap.  Div.  18')        1^5 

People  f.  Green,  116  Mich.  505;  74  N.  W.  714 29,148,176 

People  V.  Hawkins,  106  Mich.  479 ;  61  N.  \V.  736 299 

People  V.  Howard,  50  Mich.  239 .182 

Peoples.  La  Hue,  67  Cal.  526;  8  Pac.  84 90 

People  i".  Louden  (Cal),  8  Pac.  66 91 

Peoples  Milk  Exchange,  133  N.Y.  565;  30  N.E.  850 334 

People  y.  Payne,  161  N.  Y.  299;  55  N.  E.  849 83,86 

People  v.  Perrin,  56  Cal.  345 230 

People  c.  Pfister,  57  Cal.  352 86,  176 

People  V.  Roberts,  22  N.  Y.  Ap.  Diy.  282 192 

People  V.  Roberts,  25  N.  Y.  Ap.  Div.  13 193 

I'eople  V.  Roberts,  27  N.  Y.  Ap.  Div.  455 193 

Peo|)le  V.  Roberts,  29  N.  Y.  Ap.  Div.  585 193 

Pe.jple  V.  Roberts,  30  N.  Y.  Ap.  Div.  150 192 

Peoples.  Rose,  188  111.  268;  59  N.E.  432 261 

People  y.Runkle,  9  Johnson  (X.  Y.),  147 107 

People  V.  Selfredge,  52  Cal.  331 67,  91 

People  V.  Society,  25  Barb.  (N.  Y.)  7 100 

People  V.  Society,  24  Barb.  (N.  Y.)  570 33 

People  y.  Stanford,  77  Cal.  360;  18  Pac.  85 233 

People  V.  Webster,  10  Wend.  (X.  Y.)  554 101 

People  ex  re/,  y.  Company,  111  Mich.  405;  69  N.  W.  653 296 

People  ex  rel.  v.  Rice,  128  N.  Y.  591  ;  28  X.  E.  251 332 

People  ex  rel.  v.  Wemple,  138  N.  Y.  582  ;  34  X.  E.  386 386 

People  ex  rel.,  etc.  v.  Knight,  174  N.  Y.  475 ;  67  N.  E.  65 177 

I'eople  ex  rel.  Blossom  r.  Xelson,  46  X.  Y.  477 332 

People  ex  rel.  H.  &  H.  Co.  v.  Campbell,  189  X.  Y.  68 ;  34  N.  E.  753 336 

I'eople  ex  rel.  N.  Y.  P.  Co.  v.  Rice,  128  X.  Y.  59 ;  28  N.  E.  251 84 

I'eople  ex  re/.  Pennsylvania  R.R.y.  VVemple,  138  N.  Y.  1 206 

People  ex  rel.  S.  T.  Clock  Co.  v.  Wemple,  133  N.  Y.  323 ;  31  N.  E.  238      ...     336 

Peoria,  etc.  Co.  v.  Preston,  85  la.  115 56,  146 

Perkins  u.  Berders,  50  Miss.  733 98 

Perkins  v.  Dickinson,  6  Gray  (Mass.),  586 

Perkins  y.  Lyons,  111  la.  192;  82  N.  W.  486 110 

P.. rry  r.  Company,  93  Ala.  304;  9  So.  217 104,106,143 

Perry  v.  .Mill  Co.,  93  Ala.  ;!64  ;  9  So.  217 3Uo 

Peshtigo  Co.  y.  Company,  50  111.  Ap.  624 37 

Petit.'.  Minnesota,  177  (;.  S.  164;  44  L.  E.  716 164 

Pettibone  .;    Company,  148  Mass.  411  ;  19  N.E.. 337 292 

Petty  y.  Havden,  115  1a.  212;  88  N.  W.  339 24 

I'liihin  r.  ifazard,  19  Ked.  Cases.  Xo.  UOfW;  5  Dill.46 125 

Pliiladelphia,  etc.  Ass'n  ('.  Xew  York,  119  U.  S.  119 208 

Piiiladelphia,  etc.  Steamship  Co.  v.  Pennsylvania,  122  U.  S.  345 210 

Phillip.s  V.  Albany,  28  Wis.  340 892 


XX XVI  TAKLIC    OF    CASES. 

riiillips  r.  Wickliam.  1  Taige  (\.  Y.),  500 104 

riiuMiix  Iron  Co.  r.  Cominoiiweiiltli,  li;]  I'a.  St.  503 IGG 

I'k-anl  r.  Huglioy,  5S  O.  St.  577 152 

riciird  c.  Soars,  ii  Ad.  &  Kl.  40!) (J3 

Pierce  v.  Oointiioiiwoaltli,  1(H  I'a.  St.  150 49 

Pierce  i'.  Company,  "J  1  How.  (U.  S.)  412 178 

Pierce  v.  Conipton,  lo  H.  I.  312 358 

Pierce  r.  People,  100  111.  11 ]<)() 

Pike  V.  Coini)anv,  OS  Me.  445 KIO 

Pinney  r.  Nelson,  Ks;5  U.  S.  144;  22  Sup.  Ct.  52 2;!4 

Pioneer  Co.  c.  Brockett,  68  111.  Ap.  204 110 

Pioneer  Sav.  &  Loan  Ass'n  r.  EyiT,  02  Neb.  810;  87  N.  W.  1058  .     .     .     !     .     !  317 

Pittsburg,  etc.  Co.  v.  Keokuk,  etc.  Bridj-e  Co.,  131  U.  S.  37  ;  9  S.  Ct.  770      .     .  62 

Pittsburg,  etc.  R.  K.  Co.  v.  Allegheny  Co.,  63  Pa.  St.  126 174 

Pittsburg,  etc.  Ky.  Co.  y.  Garrett,  50  0.  St.  405;  34  N.  E.  493 59 

Plimpton  r.  Bigelow,  93  N.  Y.  592 205 

Porter  c.  Company  (Mont.),  74  Pac.  938 36  60 

Porter  r.  Robinson,  40  llun  (N.  Y.),  209 !     ".     .  '  96 

Postal,  etc.  Cable  Co.  v.  Charleston,  153  U.  S.  693 208 

Postal  Telegraph  Co.  v.  Adams,  155  U.  S.  696 208  209 

Potter  V.  Bank,  5  Hill  (N.  Y.),  490 '38 

Powder  Rivur  Cattle  Co.  v.  Commissioners,  9  Mont.  145;  23  Pac.  383  ....  313 
Powell  V.  Murray,  3  N.  Y.  An.  Div.  273;  38  N.  Y.  Sup.  233  ;  157  N.  Y.  717  ;  53 

N.  E.  1130 51 

Pratt  I'.  Company,  35  Conn.  365 103 

Pratt  V.  Company,  1  Col.  Dec.  Supp.  171 238 

Prewitt  I'.  Trimble,  92  Ivy.  176;  17  S.  W.  356 279 

Price's  Appeal,  106  Pa.  St.  421 48 

Printing  House  v.  Trustees,  104  U.  S.  711 746 

Proprietors',  etc.  v.  Dickinson,  6  Gray  (Mass.),  586 98 

Proprietors,  etc.  v.  Towne,  1  N.  H.  44 17 

Prouty  u.  Mich.,  etc.  R.  R.  Co.,  1  Hun,  655 .  41 

I'rovidence  Bank  v.  Billings,  4  Peters,  514 Ifjl 

Pullman  v.  Company,  73  111.  Ap.  313 ."    .'  122 

Pullman  v.  Upton,  96  U.  S.  328 *.     '.  171 

Purdy  V.  Association  (Mo.  Ap.),  74  S.  VV.  486 01 


Q. 

Q.  C.  F.  &  C.  Co.  V.  Crawford,  127  Mo.  356 ;  30  S.  W.  163 308 

Quinby  v.  Waters,  28  N.  J.  L.  533 II3 


R. 

R.  E.  G.  V.  Smith,  10  Wood,  74 61 

R.  F.  Ass'n  V.  Clarke,  61  Me.  351 ...'.'.  86 

R.  G.  W.  Railway  Co.  v.  Company,  23  Utah,  22  ;  63  Pac.  995  .     .     .     '     '     '     '  373 

R.  I.  Ry.  Co.  r.  Moffatt,  75  111.  524 I79 

Racine,  3tc.  Ry.  Co.  v.  Company,  49  111.  ,331 

Railway  r.  Fire  Ass'n,  55  Ark.  163;  18  S.  W.  43 !     '  2^9 

Railway  Co.  t-.  Allerton,  18  Wall.  (U.  S.)  233 .'     '     *  1I6 

Raisbeck  v.  Oesterricher,  4  Abb.  New.  Cases,  444 332 

Ramsey  r.  Mfg.  Co.,  116  Mo.  313;  22  S.  W.  719 ".*.!!  308 

Ramsey  v.  Tod,  95  Tex.  614  ;  69  S.  W.  133 13,  20,  28,  98 

Ramson  y.  Bank,  13  N.  J.  Eq.  212 '      '  '32 

Rankin  r.  F.  I.  T.  &  S.  D.  Co.,  189  U.  S.  242 .     !  172 

Rassbeck  v.  Desterriclier,  55  How.  Pr.  516 87 

Rathbone,  etc.  Co.  r.  Frost,  9  Wash.  162;  37  Pac.  298 !  385 

Raymond  v.  Caton,  24  111.  123 48 

Reading  R.  R.  v.  Pennsylvania,  15  Wall.  296 205 

Rector  i;.  Hartford  Deposit  Co.,  190  111.  380;  60  N.  E.  528 63 

Reed  v.  Company,  50  lud.  342 67 


TABLE    OF   CASES.  XSXVii 

Reid  V.  Colorado,  87  U.  S.  1.37  ;  47  L.  E.  108 163 

Keinliard  r.  Mining  Co.,  107  Mo.  616;  18  S.  W.  17 308 

Kepublic  Life  Ins.  Co.  r.  Swigert,  135  111.  150  ;   25  N.  E.  680 36 

Revere  v.  Company,  15  I'ick.  (Mass.)  351 155 

Hex  v.  Passniore,  3  Term  Rep.  199 157 

Re.r  V.  Richardson,  1  Burr,  517 61 

Rex  V.  Taylor,  3  Salk.  231 61 

Reymann  Brewing  Co.  c.  Brister,  179  U.  S.  445;  45  L  E.  209 163 

Reynolds  v.  Myers,  51  Vt.  444 27 

Rliodes  I'.  State  of  Iowa,  170  U.  S.  412;  42  L.  E.  1088 163 

RihlinsT  Stock  Co.  v.  People,  147  111.  234  ;  35  N.  E.  608 167 

Richards  r.  Bank,  75  Minn.  196;  77  N.  W.  822 90 

Richardson  i".  Association,  131  Mass.  174 32 

Richardson  v.  Company,  23  Utah,  366  ;  65  Pac.  74 374 

Rieliardsonr.  Graham,"45  W.  Va.  134;  30  S.  E.  92 138,388 

Richardson  c.  Sibley,  11  Allen,  65 .  '62 

Richardson  v.  U.  S.  M.  &  T.  Co.,  194  111.  259 ;  62  N.  E.  606 264 

Rider  i\  Morrison,  54  Md.  429 .  288 

Rikeri-.  Leo,  133N.  Y.  519;  30N.  E.  598 "     .  77 

Rivanna  Nav.  Co.  v.  Dawsons,  3  Grat.  (Va.)  10 3,3 

Rives  r.  Company,  30  Ala.  92 4<> 

Robbins  I'.  Shelby  Co.  Tax  Dis.,  120  U.  S.  489 192,  208 

Robinson  1:  Pope,  57  Cal.  496 1-J8 

Rocke  '■.  Tlionias,  56  N.  Y.  559 l.-g 

Rodjrers  r.  Bonnett,  2  Okla.  553;  37  Pac.  1078 347 

Rogers  I'.  Gross,  67  Minn.  224  ;  69  N.  W.  8U4 144 

Rondell  v.  Fav,  32  Cal.  354 .     .  231 

Rood  V.  Wliarton,  74  Fed.  118 124 

Ross  V.  Company,  77  111.  134 46. 

Ross  V.  Crockett,  14  La.  Ann.  811 ,     .     .     .     .  '2bO' 

Rough  I'.  Breitung.  117  Mich.  4H;  75  N.  \V.  147 29',> 

R  liny  an  v.  Coster,  14  Peters,  122 <J6 

]{ii9sell  V.  M'Lellan,  14  Pick.  63 , 294 

Rutherford  y.  Hill,  22  Ore.  218 ;  25  Pac.  540 173,348 


S.  B.  T.  M.  Co.  L-.  Company,  4  S.  D.  173;  56N.  W.  98 363 

S.  E.  Co.  V.  Conimonwealth,  21  Kv.  L.  R.  1556;  55  S.  W.  684 280 

S.  E.  L.  Co.  I'.  Bank,  127  N.  Y.  517;  28  N.  L.467 50 

S.  F.  E.  Co.  !'.  Hitchcock,  9  N.  i\I.  156;  50  Pac.  332 329 

S.  F.  ,\.  Bank  r.  Almv,  117  .Mass.  476 71    KM) 

S.  (;.  &  p.  Co.  V.  Sclxdfield,  70  Conn.  500;  40  Atl.  182 <j;j'  240 

S.  H.  Road  r.  Greer,  12  R.  I.  164 '  lui) 

S.  I.  &  M.  P..  Co.  1-.  Stone,  174  Mo.  1  ;  73S.  W.  453 183 

S.  L  C.  N.  Bank  y.  IIendrici<son,  40  N.  J.  L.  52 17;i 

S.  M.  Co.  r.  Company,  81  .Minn.  294;  84  N.  W.  109 ;;(i2 

S.  M.  I).  Corp.  w.  Ropes,  6  Pick.  (.Mass.)  23 57 

S.  P.  II.  Co.  y.  Thatcher,  11  N.  V.  102 72 

S.  P.  I{y.  Co.  y.  Denton,  146  U.  S.  21)1 l^;l 

S.  P.  T.  Co.  V.  Company,  50  .Mimi.  93;  52  N.  \V.  274 ;;7 

S.  li.  C.  S.  Co.  V.  Rankin,  45  III.  Ap.  226 125. 

S.  S.  Ass'n  1:.  Company,  25  Mo.  Ap.  642 100 

S.  S.  &  L    Ass'n  r.  Libert,  153  Ind.  19H;  54  .\.  F.  753 269 

S.  S  T.  &  Co.  y.  Piper,  4  Idaho,  463;  40  Pac.  144 26(> 

S.  W.  Co.  V.  Armstrong,  17  Me.  34 3  4 

S.  \V.  Co.  r.  Bank,  6H  Ark.  234;  57S.W.  257 225 

S.  &  K.  Uy.  Co.  v.  dishing,  45  .Me.  .')3J ' 57,68,70 

Sacramento  Bank  /•.  Pacific  llaidc,  124  Cal.  147;   156  I'ac.  7H7 173 

Salamon  r.  Salamon  Co.  (II.  of  L.  Cases),  45  \V.  K.  193;  75  L.  T.  1{.  420     .     .  14 

Salem  Baidc  c  Bank,  17  .Mass.  1 56 

Salem  .M.  I).  Corp.  i;.  Hopes,  23  ^L•lss.  23 2. '4 

Salt  Co.  y.  East  Saginaw,  13  Wall.  (U.  S.)  378 10 


XXXviii  TABLE   OF   CASES. 

Salt  Lake  llanlware  Co.  r.  Company,  13  Utah,  423;  45  Pac.  200 374 

SaiiiiiT  V.  Upton,  Ul  U.  S.  (30 170 

Sair.Ioaquin  r.  Heeclior,  101  Cal.  70;  35Pac.  349 48 

San  IVdro  r.  K.  K.  Co.,  101  Cal.  333;  35  Pae.  993 233 

Santa  Clara  Female  Acaiiemv  «^.  Sullivan,  116  111.  375;  6  N.  E,  183     ....  192 

Sarsjont  r.  Ins.  Co.,  25  Mass.  "JO 48 

Samulers  r.  Farmer,  62  N.  II.  572 24,  27 

Savini^s  Trust  Co.  r.  Company,  112  Fed.  693 60 

Soanlon  v.  Crawshaw,  6  Mo.  Ap.  337 32 

Sc-anlon  v.  Snow,  2  D.  C.  Ap.  Cases,  137 248 

Sciienectady,  etc.  Plank  Road  v.  Thatcher,  111  N.  Y.  102 71 

Schley  V.  Dixon,  24  Ga.  273 176 

Schloss  r.  Company,  87  Ala.  411;  G  So.  350 71 

Schmidt  &  Bro.  Co.  (,-.  Mahoney,  60Neb.  20;  82N.  W.  99 317 

Schmidt  r.  Mitchell,  101  Ky.  570;  41  S.  W.  929 49 

School  District  !•.  Greenville,  69  N.  II.  84;  6  Atl.  484 323 

Schroersr.  Fisk,  lOCol.  599;  16  Pac.  285 325 

Schuetzenhund  I'.  Agitations  Verein,  44  Mich.  313;  6  N.  W.  673 29 

Scott  r.  B.  &  0.  R.  R.  Co.,  93  Md.  75 ;  49  Atl.  327 45 

Scott  i».  Company,  93  Md  475;  49  Atl.  327 288 

Scott  V.  Depeyster,  1  Kd.  Ch.  N.  Y.  513 176 

Scott  r.  Windham,  73  Miss.  76;  16  So.  206 305 

Scottish  Union,  etc.  Co.  v.  Herriott,  109  la.  606 ;  80  N.  W.  665 273 

Scoville  V.  Thaver,  105  U.  S.  143 72,  115,  142,  144 

Scruggs  V.  Coinpany,  54  Ark.  566  ;  16  S.  W.  563 229 

Seabright  i-.  Pavne,6  Lea,283 ; 367 

Seaton  c.  Grimm,  110  la.  145;  81N.  W.  225 80 

Seattle  Gas  &  Electric  Co.  v.  Citizens'  Light  and  Power  Co.,  123  Fed.  588     .     .  183 

Second  Nat.  Bank  I'.  Hall,  35  0.  St.  158 40 

Sec.  Co.  V.  Paniiandle  Nat.  Bank,  93  Texas,  575 ;  57  S.  W.  22 191 

Security  Co.  r.  Bank,  93  Texas,  575;  56  S.  W.  22 371 

Seignouret  v.  Com  pan  v,  24  Fed.  332 70 

Senn  r.  Levy,  23  K.  L."  R.  662,  1331  ;  63  S.  W.  776 279 

Shadford  c.  Company,  130  Mich.  300;  89  N.  W.  960 290 

Shanklin»^  Grav,  111  Cal.  88;  43Pac.  399 176 

Shannon  f.  Stevenson,  173  Pa.  St.  419;  34  Atl.  218 50 

Shattuck  V.  Company,  58  Cal.  550 230 

Sliaw  f.  Gilberr,  111  Wis.  165;  86N.  W.  188 392 

Shelmerdine  v.  Welch,  8  Pa.  Co.  Rep.  3-30 105 

Shepang  Voting  Trust  Case,  60  Conn.  553;  24  Atl.  32 105 

Shepard  ;-.  Drake,  61  Mo.  Ap.  134 121,308 

Sheridan  Elec.  Light  Co.  v.  Bank,  127  N.  Y.  517;  28  N.  E.  467 108 

Sherwood  y.  Bank,  195  111.  112;  62  N.  E.  835 263 

Shickle  r.  Watts,  94  Mo.  410;  7  S.  W.  274 123,309 

Shields  V.  Company,  94  Tenn.  123  ;  28  S.  W.  668 79,  135,  366 

Shields?;.  Life  Ins.  Co.,  119  N.  C.  380;  25  S.E.  951 339 

Shoun  r.  Armstrong  (Tenn.),  59  S.  W.  790 54 

Sluirtz  V.  Company,  9  Mich.  269 71 

Sibley  v.  Bank,  133  Mass.  515 292 

Sidway  v.  Company,  104  Fed.  481 183 

Sigualron  Co.  V.  lirown,  171  N.  Y.  488;  64N.  E.  294 171 

Silsby  V.  Strong,  38  Ore.  36  ;  62  Pac.  633 350 

Simmings  v.  Association,  26  O.  St.  483 79 

Simmons  I'.  Company,  113  N.  C.  147;  13  S.E.  117;  22  L.R.  A.  677     .      65,66,160 

Simmons  v.  Steamboat  Co.,  113  N.  C.  147  ;  18  S.  E.  117 338 

Simon  y.  Association,  54  Ark.  58;  14  S.  W.  1101 226 

Simplex  Dairy  Co.  v.  Cole,  86  Fed.  739 192 

Simpson  V.  Garland,  76  Me.  203 101 

Sims  r.  Commonwealth,  24  Ky.  L.  Rep.  159;  71  S.  W.  929 87 

Siniier  v.  Given,  61  la.  93  ;  15  N.  W.  858 272 

Singer  r.  Hutchinson,  183  111.  605;  56  N.  E.  388 155 

Singer  .Mfg.  Co.  v.  Brown,  64  Ind.  548 269 

Singer  Mfg.  Co.  v.  Graham,  8  Ore.  18 351 

Singer  .Mfg.  Co.  v.  Peck,  9  S.  1).  29 ;  67  N.  W.  947 13,  98,  362,  363 

Skick  i\  Company,  15  Ind.  Ap.  310;  44  N.E.  48 29 


TABLE   OF   CASES.  XXXIX 

Skinner  v.  Smith,  134  N.  Y.  240  ;  31  N.  E.  911 125 

Slaughter  v.  Commonwealth,  13  Grat.  767       382 

Slaughter  House  Cases,  111  U.  S.  746 162,163 

Slee  V.  Bloom,  5  Johnson's  Chan.  N.  Y.  366 157 

Sleeper  v.  Goodwin,  67  Wis.  577  ;  31  N.  W.  335       895 

Slocum  V.  Head,  105  Wis.  431  ;  81  N.  W.  673 173,  391 

Smead  f.  Company,  52  0.  St.  59 60 

Smith  i-.  Alabama,  124  U.  S.  474 208 

Smith  t'.  Bank  of  New  England,  69  N.  H.  254 ;  45  Atl.  10S2 ;  72  N.  H.  4  .     .  63,  64,  322 

Smith  V.  Company,  6  Cal.  1 330 

Smith  V.  Company,  27  N.  H.  86 30 

Smith  V.  Company,  1  How.  (Miss.)  479 109 

Smithi;.  Company  (Cal.),  57  Pac.  710 123,125 

Smith  V.  Company,  30  Ala.  650 14,  31 

Smith  17.  Company,  64  Md.  85;  20  Atl.  1032 40,96,104,106 

Smith  V.  Company,  58  N.  J.  Eq.  331 ;  43  Atl.  567 73,  176 

Smith  y.  Company,  181  U.  8.  248;  45  L.  E.  847 163 

Smith  V.  Little,  67  Ind.  549 191 

Smith  V.  Morse,  2  Cal.  524 330 

Smith  V.  V.  R.  R.  Co.,  30  Ala.  650 214 

Snell  V.  City  of  Chicago,  133  111.  413 ;  24  N.  E.  532 11 

Sniders' Sons  Co.  y.  Troy,  91  Ala.  224;  8  So.  658 90 

Society  for  Savings  v.  Coit,  6  Wall.  (U.  S.)  594 178,  205 

Society  Perun  v.  Cleveland,  43  0.  St.  481  ;  3  N.  E.  357 343 

Solomon  f.  Bates,  118  N.  C.  321;  24  S.  E.  746 338 

Spangler  i-.  Butterfield,  6  Col.  356 235 

Spangler  v.  Company,  21  111.  476 108 

Sparks  v.  Company,  87  Ala.  294  ;  6  So.  195 86 

Sparks  i'.  Company,  3  Idaho,  306  ;  29  Pac.  134 14 

Spartenberg,  etc.  ll.  Co.  v.  Ezell,  14  S.  C.  281 113 

Spear  r.  Crawford,  14  Wend.  24 95 

Spence  v.  Shapard,  57  Ala.  598 2j^5 

Spero  V.  Company,  7  Ind.  369 179 

Sprague  r.  Bank,  172  111.  149 ;  50  N.  E.  190 172,268 

Sprague  v.  Company,  90  111.  174 147,  179 

Sprague  Brimmer  Mfg.  Co.  v.  Company,  26  Fed.  572 156 

Spry  Lumber  Co.  i;.  Cliappell,  184  111.  539;  66  N.  E.  794 264 

St.  Clair  v.  Co.x,  106  U.  S.  356 180 

St.  J.  &  L.  R.  R.  Co.  V.  Shambaugh,  100  Mo.  557  ;  17  S.  W.  581 308 

St.  L.  A.  &  T.  H.  Ry.  Co.  v.  Company,  158  111.  390 ;  41  N.  E.  16 110 

St.  Louis  Per.  Ins.  Co.  v.  Goodfellow,  9  Mo.  149 48 

St.  L.,  etc.  I^y.  Co.  f.  Fire  Ass'n,  60  Ark.  325;  30  8.  W.  350 229 

Stafford  &  Co.  v.  Am.  Mill  Co.,  13  R.  I.  310 358 

Standard  Oil  Co.  r.  Common  wealth,  23  Ky.  L.  R.  302;  62  8.  W.  897     ....     279 

Standard  Sewing  Machine  Co.  r.  Fr.ince,  2  Pen.  430;  48  Atl.  188 247 

Standley  v.  Company,  27  Col.  331 ;  01  J'ac.  GOO 238 

Stanton  Copper  Mining  Co.  v.  Thurmond,  7  Mo.  Ap.  587 77 

State  I'.  Association,  29  O.  St.  399 77 

State  y.  Association,  .35  O.  St.  258 37,156 

State  V.  Association,  23  N.  J.  L.  195 48 

Statev.  Bank,95Tenn.  221;  31  8.  W.  993 68,70 

State  I'.  Bank,  13  Smeads  &M.  (Miss.)  509 160 

State  V.  Bank,  5  Ark.  595 227 

State.;.  Bank,  108  Ala.  3;  18  So.  634 237 

State  V.  Bank,  2  Stew.  .30 216 

State  r.  Barron,  58  N.  II.  370 159,323 

State  V.  Beck,  81  Ind.  500 20,  79 

State  V.  Carr,  5  N.  II.  307       24 

State  V.  Chemical  P.ank.  10  O.  St.  6.35 158 

Staley.  Company,  HH  Wis.  612;  GO  N.  W.  796 20,28,29,83 

State  u.  Conii)any,  16  8.  C.  521       68 

State  i;.  Company,  144  Mo.  562;  46  8.  W.  593 30 

State  t;.  Company,  40  Kan.  96  ;  19  Pac.  849 32,  62 

State  V.  Company,  24  'i  c.xas,  80 65,  GO,  IGO 

State  V.  Company,  45  Wis.  579 66,  66,  169 


xl  TABLK   OF   CASES. 

State  r.  Company,  58  Minn.  nSO;  50  N.  W.  1048 66,159 

State  I'.  Company,  41  Iiid.  151 08 

State  r.  Company,  .'>  Hump.  (Tenn.)  305 72 

State  r.  Company,  4i)  O.  St.  137  ;  30  N.  !<:.  279 81,100 

State  r.  Company,  102  Ala.  594  ;  15  So.  347 147 

State  i\  Company,  8  K.  I.  182 158 

State  V.  Company,  1  Tenn.  Cases,  511 160 

State  r.  Company,  39  Minn.  638;  41  N.  W.  108 184,198,199 

State  c.  Company,  47  ().  St.  167  ;  24  N.  K,  392 198 

State  c.  Company,  91  la.  517;  00  N.  \V.  121 iy8 

State  r.  Company,  49  O.  St.  440;  31  N.  E.  058 

State  V.  Company,  108  Ala.  20 ;  18  So.  801 216 

State  r.  Company,  91  la.  517;  CO  N.  W.  121 273 

State  u.  Company,  01  Kan.  547;  CO  Pac.  337 60,93,182,270,277 

State  I'.  Company,  52  La.  Ann.  1822;  28  So.  372 283 

State  r.  Company,  40  Minn.  213;  41  N.  W.  1020 300 

Stale  r.  Company,  43  Minn.  17;  44  N.  W.  10;S2 304 

State  r.  Company,  21  Wash.  451  ;  58  Pac.  584 384 

Stater.  Company,  61  Neb.  28;  84  N.  W.  413 317 

State  i^.  Company,  24  Neb.  143 ;  38  N.  W.  43 317 

State  iv  Company,  29  Neb.  700;  40  N.  W.  155 29,317 

State  V.  Company,  4  Neb.  354 317 

State  r.  Company,  62  ().  St.  350  ;  57  N.  E.  62 345 

State  V.  CompanV,  59  Kan.  151 ;  52  Pac.  422 66,  155,  276 

State  f.  Critohett,  37  Minn.  13;  32  N.  W.  787 79,91,300 

State  V.  Curtis,  9  Nev.  324 56 

State  V.  Foulkes,  94  Ind.  493 13,  77 

State  1-.  Greer.  78  Mo.  188 49 

State  I'.  Lee,  21  O.  St.  662 79 

State  1-.  Lesiieur,  99  Mo.  552;  13S.  W.  377 85 

State  V.  McCiiilou!j;li,  3  Nev.  202 58 

State  f.  McDaniel,  22  O.  St.  354 57 

State  V.  McCains,  04  Mo.  Ap.  225 103 

State  V.  McGrath,  75  Mo.  424 14 

State  I'.  McGrath,  92  Mo.  355;  6  S.  W.  29 15  31,83,84,307 

State  V.  Merchant,  37  O.  St.  251 .      103,  104 

State  r.  Oftedal,  72  Minn.  488;  75  N.  W.  692 146 

State  1-.  Oyerton,  4  Zabriskie  (N.  J.),  435  ;  24  N.  J.  L.  435 100 

State  y.  Payne,  129  Mo.  408;  31  S.  W.  797 32,73 

State  i;.  Phipps,  50  Kan.  609;  31  Pac.  1097 199 

State  r.  Keinmund,  45  0.  St.  214;  13N.  E.  30 199 

State  V.  Hot  Witt,  17  Mont.  41  ;  41  Pac.  1004 85,178 

State  f.  Sclditz  Brewing  Co.,  104  Tenn.  715;  59  S.  W.  1033 308 

Stater.  Sherman,  22  0.  St.  411 179,345 

State  V.  Siiippers  Compress  &  Warehouse  Co.,  95  Tex.  603  ;  69  S.  W.  58       .  108,  370 

State  V.  Simonton,  78  N.  C.  57 159 

State  V.  Stocklov,  45  O.  St.  304  ;  13  N.  E.  279 49 

State  V.  Taylor,'55  ().  St.  01 ;  44  N.  E.  513 84,  85,  152 

State  V.  TaVlor,  53  la.  759 ;  6  N.  W.  39 40 

State  r.  Tudor,  5  Day,  329 49,104 

State  V.  Trustees,  etc.,  5  Ind.  77 61,  150 

State  r.  Webl),  97  Ala.  Ill ;  12  So.  377 73,91,113,210 

State  r.  Webb,  110  Ala.  214;  20  So.  462 125,141 

State  V.  White,  13  Mo.  Ap.  139 92 

State  er  r^/.  r.  Ackerman,  51  O.  St.  163  :  37  N.  E.  828 184 

State  ex  rel.  v.  Cook,        Mo.       ;  80  S.  W.  929 185,  190 

State  ex  rel.  v.  Insurance  Co.,  49  O.  St.  440  ;  31  N.  E.  658 343,  344 

State  ex  rel.  Attorney  General  v.  Conklin,  33  Wis.  21 100 

State  ex  rel.  Bourdette  r.  Company,  49  La.  Ann.  1550  ;  22  So.  815 IOC) 

State  ex  ?-p/.  Cornish  y.  Tuttle,  53  Wis.  45;  9  N.  W.  791 392 

State  ex  r^l.  Drake  v.  Doyle,  40  Wis.  175 393 

Stateer  re/.  Ledercri'.  Company,  88  Wis.  512;  00  N.  W.  790 390 

Stateer  re/.  O'Hara  r.  Nat.  Bis.  Co.,  N.  J.;  51  Atl.  211 320 

State  ex  ,v/.  Walker  r.  Talbot,  123  Mo.  69;  27  S.  W.  .306 28 

State  ex  rel.  Watkins  v.  Company,  106  La.  Ann.  621 ;  31  So.  172 283 


TABLE    OF    CASES. 


xli 


State  ex  rel.  White  v.  Hancock,  20  Pen.  252  ;  45  Atl. 

State  R.  R.  Tax  Cases,  92  U.  S.  603 

State  Savings  Bank  v.  Johnson,  18  Mont.  440 ;  45  V 
Steamship  Co.  v.  Company,  28  La.  Ann.  173  .  .  . 
Steger  i'.  Davis,  8  Tex.  Civ.  Ap.  23 ;  27  S.  W.  1068 
Stein  y.  Howard,  (5-5  Cal  616;  4  Pac.  622  .  . 
Steiner  v.  Steiner,  L.  L.  Co.  (Alaj,  20  So.  494 
Steinmetz  v.  Company,  57  Inil.  457     .... 

Stevens  v.  Company,  20  Vt.  545 

Stewart  v.  Company,  38  N.  J.  L.  436       .     .     . 
Stickle  V.  Company  (X.  J.  Eq.)  32  Atl.  708 
Stockton  V.  Baltimore  &  N.  Y.  R.  R.  Co.,  32  Fed 
Stoddard  c.  Company,  44  Conn.  545        .     . 
Stolze  V.  Company,  100  Wis.  208  \^  75  N.  W.  987 
Stone  I'.  Framingham,  109  Mass.  303       .     .     . 
Stout  V.  Zulick,  48  N.  J.  L.  599 ;  7  Atl.  302      . 

Stowe  1-.  Flagg,  72  111.  397 

Strauss  v.  Company,  52  ( ).  St.  o9  .  .  .  ^  . 
Sturges  V.  Company,  7  I)e  GfX,  M.  &  G.  158  . 
Sturges  V.  Vanderbilt,  73  N.  Y.  384    .... 

Sullivan  v.  Company,  3J  Cal.  459 

Sullivan  v.  Parkes,  69  Ap.  Div.  221  ;  74  N.  Y.  Sup 
Sullivan  v.  Vernon,  121  Ala.  393;  25  So.  600  . 
Sultons  Hospital  Cases,  5  Coke's  Rep.  253.     . 
Summers  v.  Company,  38  S.  1).  ;  86  N.  W.  749 

Sutherland  v.  Olcott,  95  N.  Y.  93 

Sutro  V.  Company,  19  Nev.  121  ;  7  Pac.  271  . 
Swan  V.  Bui-nliam,  70  N.  H.  580 ;  49  Atl.  93  . 
Sweney  v.  Talcott,  85  la.  103;  52  N.  W.  106  . 
Sykes  v.  People,  132  111.  32;  23  N.  E.  391    .     . 


851 
ac.  662 


786 


.  244 

.  205 

.  312 

.   37 

.   33 

143,  232 

.   10 

71,77 

.  147 

.  198 

38,  46.  47,  66 

.  201 

.  121 

.  156 

.  294 

.  80,88 

10,  88,  85,  94 

.   60 

.   45 

.   74 

.   52 

.  .  105 

.  .  217 

.  30,  65 

.  .  362 

.  .   41 

.  .  318 

322 

.  75,  82 

.  .   41 

T. 

T.  A.  L.  Co.  y.  Massey  (Tenn.),56S.  W.  35 3^1 

T.  L.  Co.  17.  Holhert,  5  N.  Y.  Ap.  Div.  559 191,  192 

T.  M.  Co.  V.  Goodlme,  18  N.  C.  981 '^^'^^^ 

T.  R.  N.  Co.  V.  Xcal,  3  Hawks  (N.  ('.),  526 89,  90 

Tabor  y.  Bank,  62  Fed.  383;  IOC.  C.  A.  429 l'& 

Tabor  y.  Company,  11  Col.  419;  18  Pac.  537 191 

Talbot  V.  Company,  74  Mo.  544 1°"^ 

'iallmadge  v.  Company,  4  Barb.  (N.  Y.)  382 Jo 

Taylor  y.  Com|)any,  91  Me   193;  39  Atl.  560 ^4 

Taylor  r.  Comp-uiv,  6  O.  St.  83 f 

Tavlori-.  Company.  14  Alien  (Mass.),  353 ,,-.    l-A 

Taylor  c.  Cummings,  127  Fed.  108 l2o,  I'O 

Taylor  v.  Griswold,  14  N.  J.  L.  222 •     104 

Taylor  v.  Holmes,  14  Fed.  Rep.  498 58,  lo5 

Teitif?  V.  Boesman,  12  Mont.  404  ;  31  Pac.  371 J4 

Telephone  Co.  y.  ToU-phone  Co.,  22  Cal.  398 230 

Tempel''-  no'lK^'-H'^'l'exas,  69;  32S.  W.  514;  33S.  W.  222 08 

Ten  Eyck  I'.  Company,  74  Mich.  226;  41  N.  W.  905 197 

Terwilhger  r.  Comi)anv,  59  ill.  249 f.'^ 

Thatclier.;.  King,  156  Mass.  490;  31  N.E.  048 1'5 

Tiiomas  v.  Company,  101  U.  S.  71 J'\ 

Thomasi'.  C.)mi)any,  65Cal.  600;  4  Pac.  641 2.4 

Thomas  v.  Dakin.  22  Wfuil.  9 •;- 

Thompson  v.  Bank,  19  Nev.  171  ;  7  Pac.  870 •'»•' 

Thompson  r.  Comjjany,  58  Miss.  423 1' 6 

Thompson  v.  Company.  68  Miss.  423  ;  9  So.  821 30|) 

Thompson  IV  Waters,  25  Midi.  214 ,    ;     •     •     •         \^S'l 

'Ihompson  Houston  Klec.  Co.  v.  Murray,  GO  N.  J.  L.  20;  37  All.  4  l.J    .     .  1<6 

Thornton  I'.  Balcom,  85Ia.  198;  52N.  W.  190 > 5,  80,271 

Thum  V.  Pyke  (Idaho),  06  Pac.  167 '-^^^ 


xlii  TABLE   OF   CASES. 

Tidewater  Tipe  Line  Co.  v.  Berry,  6S  N.  J.  L.  212 178 

Titlioiite  S:iv.  Hank  v.  Libbey,  101  Wis.  1!)3 ;  77  N.  W.  182 75 

Tillev  r.  CovkoiKlall,  172  N.  Y.  687;  (Jo  N.  E.  674 40 

Tillvcr  V.  lloro  .lar  Co.,  17  Pliil.  (I'a.)  163 14 

Titus  c.  C.  M.  r.  Ixoa.l,  61  N.  Y.  2:57 110 

Toledo  c.  National  Bank,  21  N.  Y.  542 

Toledo  Commercial  Co.  v.  Company,  55  0.  St.  217 196 

Toledo  Co.  c.  Thomas,  33  W.  Va  5(3(5;  11  S.  E.  87 389 

Toledo,  etc.  Ky.  Co.  r.  Company,  95  Fed.  497  ;  30  C.  C.  A.  155 38 

Toledo,  etc.  Co.  v.  Glum,  etc.  Co.,  65  O.  St.  217;  45  N.  E.  197 346 

Tolmap.  V.  Company,  22  N.  W.  605 37 

Tomlin  r.  Bank,  52  xMo.  Ap.  430 49,102 

Toner  c.  Faulkerson,  125  Ind.  224;  25  N.  E.  218 173 

Tooncy  >:  S.  L.  K.  P.,  74  Mo.  Ap.  129 310 

Topeka  Paper  Co.  v.  Company,  7  Okla.  220 ;  54  Pac.  455 346 

Tourtelot  v.  Wliitliead,  9  N.  1).  4(J7 ;  84  N.  W.  8 340 

To\vn  of  Searcy  !•.  Yarnell,  47  Ark.  2(JU;  1  S.  \V.  319       228 

Tradesmen  Pub.  Co.  v.  Comnany,  95  Tenn.  034  ;  32  S.  W.  1097 72,  175 

Traer  r.  Company  (la.),  99  N.  W.  290 61 

Treadvvell  r.  Company,  7  Gray  (Mass.),  393 51 

Troy,  etc.  Ry.  Co.  V.  Kerr,  17  Barb.  (N.  Y.)  G07 147 

TrustCo.  v.  Floyd,  47  O.  St.  525;  26  N.  E.  no 344 

Trust  Co.  V.  State,  109  Ga.  736 ;  35  S.  E.  323 265 

Trustee,  etc.  w.  Campbell,  40  La.  Ann.  1543;  21  So.  184 79 

Trustees  v.  Manning,  72  Md.  116  ;  19  Atl.  599 33 

Tschumi  v.  Hills,  6  Kan.  Ap.  549  ;  57  Pac.  619 57 

Tuckasegee  Mining  Co.  v.  Goodhue,  118  N.  C.  981;  24  S.  E.  797 40 

Tucker  I'.  Oilman,  121  N.  Y.  189;  24  N.  E.  302 333 

Tattle  V.  Nat.  Bank,  161  111.  497  ;  44  N.  E.  984 173 


u. 

U.  M.  Co.  V.  Bank,  2  Col.  248 69 

U.  P.  Ry.  Co.  y.  Company,  163  U.  S.  604;  16  S.  Ct.  1173 108 

U.  R.  Co.  t'.  Holden,  03  N.  C.  410 94 

U.  S.  V.  Company,  1  Fed.  700 156 

U.  Savings  Ass'n  i-.  Seligman,  92  Mo.  635  ;  15  S.  W.  030 GO,  172 

Ulmer  r.  Company,  98  Me.  579;  57  Atl.  1001 13,107 

Underwood  v.  Wsildron,  12  Mich.  73 38 

Union  Bank  !'.  Laird,  2  Wheat.  (U.  S.)  390 47 

Union  Horseshoe  Works  v.  Lewis,  1  Abb.  (U.  S.)  618;  Fed.  Cases,  14383      .   85,  178 

Union  Nat.  Bank  v.  Matthews,  98  U.  S.  021 64,  77 

Union  Pacific  Railroad  Co.  v.  United  States,  99  U.  S.  700 154 

Union  S.  Co.  v.  City  of  Buffalo,  82  N.  Y.  351 332 

Union  Trust  Co.  v.  Company,  8  N.  M.  327  ;  43  Pac.  701 331 

Union  Water  Co.  v.  Company  et  oL.  22  Cal.  621 230 

Union  Water  Co.  ?;.  Kean,  62  N.J.  Eq.  Ill;  27  Atl.  1015 24 

United  States  «.  Association,  100  U.  S.  290;  17  S.  Ct.  540 139,167 

United  States  v.  Company,  29  Fed.  17 191 

United  States  Vinegar  Co.  v.  Foehrenbach,  148  N.  Y.  68;  42  N.  E.  403     ..     .       29 
United  States  Vinegar  Co.  V.  Schlegel,  143  N.  Y.  537;  38  N.  E.  729      .     .     .     24,27 

Upton  y.  Triblecock,  91  U.  S.  345;  21  L.  E.  203 142 

Utley  V.  Comi)any,  4  Col.  369 199,  232 

Utley  V.  Union  Tool  Co.,  11  Gray  (Mass.),  139 10 


V.  B.  R.  R.  Co.  V.  E.  T.  &  G.  R.  R.  Co.,  14  Ga.  327 257 

V.  C.  Itailway  Co.  y.  Clayes,  21  Vt.  30 92 

V.  G.  B.  Co.  u.  Blode,  84  Md.  129;  34  Atl.  1127 48 

Van  Cott  »;.  Van  Brunt,  82  N.  Y.  535 124,171 

Van  Etten  v.  Eaton,  19  Mich.  187 47,  66,  175 


TABLE   OP   CASES.  xliii 

Van  Pelt  v.  Association,  79  Ga.  439  ;  4  S.  E.  501 82 

Van  Pelt  v.  Gardner,  64  Xeb.  701 ;  75  N.  W.  874 54,  83,  174 

Van  Sands  i'.  Bank,  26  Conn.  144 48 

Vaughn  Machine  Co.  v.  Lighthouse,  64  Ap.  Div.  (N.  Y.)  138 194 

Va^vter  v.  FrankHn  College,  53  Ind.  88 77,  82 

Veeder  v.  Mudgett,  95  N.  Y.  295 109 

Ventura,  etc.  Ky.  Co.  r.  Hartman,  116  Cal.  260;  48  Pac.  65 142 

Vermont,  etc.  Ky.  Co.  v.  Company,  34  Vt.  2 24 

Vermont  Loan  &  Trust  Co.  v.  Hoffman,  5  Idaho,  376  ;  49  Pac.  314 260 

Vermont  Marble  Co.  v.  Company,  135  Cal.  579  ;  67  Pac.  1057 143,  232 

Vidal  V.  Girard's  Executors,  2  How.  (U.  S  )  127 33 

Visalia,  etc.  Co.  y.  Hyde,  110  Cal.  632;  43  Pac.  10 232 

Vo8  V.  Association,  9  Bull  (Ohio),  194 65 


W. 

W.  B.  &  L.  Ass'n  v.  Coleman,  89  Pa.  St.  428 79 

W.  C.  M.  Co.  V.  Byrnes,  114  N.  C.  353 159 

W.  F.  C.  F.  Co.  v.  Kiltridge,  5  Sav.  44 159 

W.  G.  &  S.  M.  Co.  V.  Baker,  3  Nev.  351       320 

W.  H.  &  H.  Mining  Co.  v.  King,  45  Ga.  34 104 

W.  P.  II.  Co.  V.  Company,  114  N.  C.  690  ;  19  S.  E.  616 27 

W.  P.  H.  Co.  V.  Young,  12  Md.  476 24 

W.  R.  Lumber  Co.  y.  Implement  Ass'n,  55  Ark.  625;  18  S.  W.  1055     ....  229 

W.  S.  Bank  i-.  Bank,  107  Mo.  133;  17  S.  W.  644 108 

W.  U.  T.  Co.  V.  Attorney-General,  125  U.  S.  530 ;  8  S.  Ct.  961 ;  31  L.  E.  790    .  85 

W.  &  B.  T.  Co.  r.  Maryland,  19  Md.  239 157 

W.  &  M.  Road  Co.  v.  Board  of  Supervisors,  64  Cal.  69 ;  28  Pac.  496    ...     .  22 

Wagner  Free  Institution  v.  Philadelphia,  132  Pa.  St.  612 153 

Walker  v.  Company,  34  (N.  Y.)  Misc.  345 71 

Wallace  y.  Bank,  a',)  Tenn.  030;  13  S.  W.  48 •     .  176 

Wallace  y.  Walsh,  125  N.  Y.  26 ;  25  N.  E.  1076 175 

Wallace  v.  T.  Co.,  70  Minn.  521  ;  73  N.  W.  189 302 

Walsenberg  Water  Co.  v.  Moore,  5  Col.  Ap.  144  ;  38  Pac.  60 107 

Walworth  v.  Brackett,  98  Mass.  98 92,  96,  290 

Ward  V.  Brigiiam,  127  Mass.  24 173 

Ward  V.  Johnson,  95  111.  215 60 

Ware  Cattle  Co.  v.  Anderson,  107  la.  231  ;  77  N.  W.  1026 273 

Warfield  u.  Company,  72  la.  666;  34  N.  W.  467 271,272 

Warner  v.  Callender,  20  O.  St.  190 79 

Washburn  v.  Company,  81  Fed.  17 121 

Washburn  .Mills  Co.  i-.  Bartlett,  3  X.  D.  138 ;  54  X.  W.  544 342 

Washington  Co.  Mut.  Ins.  Co.  i'.  Dawes,  6  Gray  (Mass.),  376 181 

Washington,  etc.  Ass'n  u.  Stanley,  38  Ore.  319;  63  Pac.  489 349 

Washington  Mills  Co.  v.  Roberts,  8  N.  Y.  Ap.  Div.  20  ;  151  N.  Y.  69     .     ,     .     .  193 

Waters  (;.  Quinbv,  27  X.  J.  L.  296 109 

Waters  Pierce  Oil  Co.  v.  Texas,  177  U.  S.  28 207 

Water  Works  Co.  v.  Low,  46  X.  Y.  Sup.  633 64 

Waterworks  v.  San  Francisco,  22  Cal.  441 231 

Watson  V.  Company,  56  Mo.  Ap.  145 56 

Waukon,  etc.  Rv.  Co.  r.  Dwyer,  49  la.  121 96 

Wechsulberg  v.  Bank,  64  Fed.  90 13,  08 

Weeks  i'.  Company,  55  N.  Y.  Sup.  Ct.  1 48 

Weeks  v.  Love,  5(i  N.  Y.  568 333 

Wuinhenmaycr  v.  Bitncr,  88  Md.  325 ;  42  Atl.  245 289 

Welch  V.  Bank,  122  X.  Y.  177  ;  25  N.  K.  269 89 

Wells  I'.  Black,  117  Cal.  157;  48  Pac.  1090 33 

Wells  c.  Company,  90  Wis.  442  ;  64  N.  W.  69 142 

Wolton  V.  .Missouri,  91  U.  S.  275 206 

West  I,'.  Crawford,  80  Cal.  19;  21  Pac.  1123 108 

Western  Co.  V.  Central  Co.,  116  Ind.  22'.);  18  N.  E.  14 268 

Western  Union  Telegraph  Co.  v.  .Mayer,  28  O.  St.  521 184,  345 

Wetherbee  v.  Baker,  35  N.  J.  Eq.  501 138,  326 


Xliv  TABLE    OF    CASKS. 

Wluclorc.  Company.  Unill.  107;  38  N.  !•:.  420 53,102,157 

Winder,  etc.  Co.  c.  Company,  11  Wasli.  tJoU;  45  I'uc.  310 78 

M'liite  c.  IJrownell,  4  Abb.  Pr.  n.  s.  102 61 

■\Vliite  r.  Dummer.  3  .M;ison  (U.  S.),  308 126 

White  r.  liroeno  (la.).  70  N.  \V.  182 172 

Wliiie  V.  Ilowanl,  :>8  Conn,  oi'2 SS 

Wliite  c.  l^ice,  112  iMioh.  403;  70  N.  W.  1024 33 

White  Corbin  Co.  r.  Jone.s,  107  N.  Y.  158 ;  bO  N.  E.  422 334 

Wiiitehill  r.  Jacobs,  75  Wis.  474  ;  44  N.  W.  630 121,  124,  125 

Whitman  r.  Bank,  176  U.  S.  550 173 

Whitman  Ag.  Co.  v.  Strand,  8  Wash.  647;  36  Pac.  082 !     385 

Wick  Nat.  Bank  f.  Union  Nat.  Bank,  62  O.St.  446;  57  N.  E.  320 344 

Wiggins  Co.  v.  East  St.  Louis,  107  U.  S.  374 208 

Wilco.x  Cordage  Co.  y.  Mosher,  114  Midi.  64;  72  N.  W.  117 290 

Wilkinson  c.  Bertock,  111  Ga.  187;  36  S.  E.  023 256 

Willamette  Ercighting  Co.  v.  Staimiers,  4  Ore.  262 350 

Williams  c  Bank  of  Commeicc,  71  JNIiss.  858;   16  So.  238 306 

Williams  r.  Benet,  34  S.  C.  112;  13  S.  E.  97 360 

Williams  v.  Boicc,  38  N.  J.  Eq.  304 326 

Williams  v.  Company,  25  Ind.  Ap.  351 ;  57  N.  E.  581 20,  28,  265 

Williams  v.  Company,  153  Ind.  496 ;  55  N.  E.  425 108 

Williams  f.  Evans,  87  Ala.  725;  6  So.  702 143,215 

Williams  r.  Hewitt,  47  La.  Ann.  1076 ;  17  so.  496 68 

Williams  r.  Lowe,  4  Neb.  382 815 

Williams  r.  Taylor,  120  N.  Y.  244;  24  N.  E.  288 108 

Willis  c.  Mabon,  48  Minn.  140;  50  N.  W.  1110 173 

Wilmington  &  Beading  By.  Co.  v.  Downward  (Del.),  14  Atl.  720 156 

Wilson  c.  Proprietors,  etc.,  9  II.  I.  590 156 

Wing  V.  Slater,  19  R.  I.  597  ;  35  Atl.  302 80 

Winscott  V.  Investment  Co.,  63  Mo.  Ap.  367 45,  309 

Witters  i\  Sowles,  31  Eed.  1 175 

Wolff  Dryer  Co.  y.  Bigler,  192  Pa  St.  466;  43  Atl.  1092 191 

AVood  c.  Association,  63  Wis.  9;  22  N.  W.  756 392 

Wood  V.  Bank,  9  Cowen,  194 81 

Wood  y.  Company,  50  Conn.  87;  13  Atl.  137 27 

Wood  V.  Corry  Water  Works  Co.,  44  Fed.  146 64 

Wood  y.  Dummer,  3  Mas(m,  308;  Fed.  Cases,  17044 114,122 

Woodberry  v.  McClurg,  78  Miss.  831  ;  29  So.  514    .     .     .     .     .     .     .     .     .  20,  83,  306 

Woodman  i-.  Company,  50  Me.  549 32 

Woodruff  V.  Erie  K.  R.  Co.,  93  N.  Y.  609 64 

Woodsim  i:  State,  69  Ark.  521 ;  05  S.  W.  465 229 

Woolen  Mills  Co.  v.  Edwards,  84  Mo.  Ap.  448 310 

Worcester  v.  Company,  109  Mass.  103  .     .     .     • 147 

Wortlien  u.  Griffith,  59  Ark.  662;  28  S.  W.  286 226 

Wright  V.  Company,  67  Cal.  532  ;  8  Pac.  70 102 

Wright  V.  Company,  52  N.  J.  Eq  352 101 

Weight  V.  Hughes,  119  Ind.  324 ;  21  N.  E.  907 59,  60 

Wright  V.  Lee,  2  S.  D.  596  ;  51  N.  W.  706       40,  90,  98 

Wright  V.  Lee  et  al.,  4  S.  D.  287  ;  55  N.  W.  931 365 

Wyman  v.  Powder  Co.,  62  Mass.  168 292 


Y.  li.  L.  N.  Co.  V.  Company,  72  Fed.  62 72 

Young  y.  Company,  65  Mich.  Ill;  31  N.  W.  814 121,124,125 

Young  V.  Vough,  23  N.  J.  Eq.  325 47 


z. 

Zabriskie  v.  Company,  18  N.  J.  Eq.  178 147 


A  TREATISE 


ON   THE 


INCORPORATION   AND   ORGANIZATION 
OF   CORPORATIONS. 


INTRODUCTION. 

The  development  of  the  modern  business  corporation  act  has 
been  most  curious  and  interesting.  Previous  to  the  year  1837 
charters  could  be  procured  only  by  special  act  of  the  legislature. 
In  that  year  the  legislature  of  Connecticut  passed  the  first  busi- 
ness corporation  act  that  went  into  force  and  effect  in  the 
United  States.  It  was  drawn  by  Theodore  Hinsdale,  of  Win- 
chester, Connecticut,  a  Yale  graduate  of  the  class  of  1821.  As 
this  act  forms  the  basic  work  of  most  of  the  business  corporation 
acts  of  to-day,  it  deserves  more  than  passing  notice.  It  was  drafted 
for  the  purpose  of  permitting  incorporation  thereunder  of  com- 
panies for  the  purpose  of  carrying  on  a  manufacturing,  mechan- 
ical, mining,  and  quarrying  business.  The  statutory  powers  of 
corporations  incorporated  thereunder  were  enumerated  as  follows : 
To  sue  and  be  sued,  to  have  a  common  seal,  to  elect  officers,  to 
fix  their  compensation  and  duties,  to  establish  by-laws,  to  em- 
ploy agents,  mechanics,  and  laborers.  Incorporation  was  limited 
to  one  purpose,  to  be  distinctly  and  definitely  set  forth  in  the  art-- 
icles  of  agreement  which  were  required  to  be  signed  by  all  the 
incorporators.  A  board  of  directors  was  provided  for;  also  a 
president,  secretary,  and  treasurer.  Power  was  given  to  the  cor- 
poration to  forfeit  stock  of  stockholders  for  non-i)ayment  of  stock 
subscriptions.  The  corporation  also  had  a  lien  upon  tlie  stock  of 
its  members  for  debts.  After  tbc  articles  were  signed  and  the 
corporation  organized  and  the  articles  of  association  published, 
1  •  1 


INCORPORATION    AND    ORCJANIZ ATION    OF    CORPORATIONS. 

the  olTicers  were  required  to  make  and  file  with  tlie  Secretary  of 
State  (and  a  duplicate  thereof  with  the  town  clerk  of  the  town 
where  tlie  corporation  was  to  transact  its  business)  a  certificate 
setting  forth,  (1)  the  purpose  of  the  corporation;  (2)  the  amount 
of  its  capital  stock;  (3)  the  names  of  stockholders  and  the  num- 
ber of  shares  held  by  each.  Annual  reports  were  made  obliga- 
tory. Stockholders  were  made  liable  for  all  capital  refunded 
to  them,  and  made  personally  liable  for  the  declaration  of  illegal 
dividends. 

The  passage  as  well  as  the  operation  of  the  first  Connecticut 
act  was  watched  closely  by  the  legislative  bodies  of  the  neighbor- 
ing States,  with  the  result  that  by  1850  there  were  in  the 
neighborhood  of  a  score  of  general  business  corporation  acts  in 
force  and  effect  in  various  parts  of  the  country  modelled  with 
some  few  exceptions  closely  after  the  Connecticut  act  above  re- 
ferred to.  The  operation  of  these  general  acts  was  so  satisfac- 
tory that  a  new  element  appeared  in  the  passage  by  various  States 
of  constitutional  amendments  forbidding  absolutely  the  creation 
of  private  corporations  for  purposes  of  profit  by  special  act  of 
the  legislature.  This  has  been  continued  until  at  the  present 
time  special  charters  cannot  be  procured  save  in  seven  of  the 
Commonwealths. 

The  next  development  is  to  be  noted  along  the  line  of  enlarge- 
ment of  corporate  purposes  and  powers.  Gradually  the  restric- 
tion of  the  earlier  incorporation  acts  limiting  the  right  and 
benefits  thereof  to  those  desiring  to  incorporate  companies  for 
manufacturing  and  mining  purposes  was  removed  so  as  to  permit 
practically  of  incorporation  for  any  lawful  purpose.  At  the  same 
time  there  came  a  demand  on  the  part  of  prospective  incorpora- 
tors for  greater  powers  than  were  permitted  at  common  law, 
— such,  for  example,  as  the  right  to  perform  constituent  acts 
outside  of  the  domiciliary  State,  to  hold  stock  and  bonds  in  other 
corporations,  and  to  amend  their  charters  unrestrictively.  In  this 
way  there  came  to  be  found  in  many  of  the  corporation  acts  a 
large  number  of  extraoi'dinary  powers  which  were  not  recognized 
at  common  law.  This  served  to  greatly  popularize  the  corporate 
form  of  organization  as  compared  with  individual,  partnership,  or 
joint  stock  company  enterprises.  The  result  which  followed  was 
natural.  The  several  State  legislatures  proceeded  one  after  tlie 
other  to  enact  statutes  compelling  incorporators  when  organizing 
2 


INTRODUCTION. 

corporations  to  pay  a  license  tax  graduated  according  to  the  cap- 
italization of  the  corporation.  In  this  way  certain  States  —  nota- 
bly Nevr  Jersey,  New  York,  Delaware,  West  Virginia,  and  Maine  — 
have  secured  a  very  large  revenue  —  all  to  the  satisfaction  of  the 
average  tax-payer. 

It  is  characteristic  of  State  legislatures  that  they  never  fail 
to  take  advantage  of  an  opportunity  to  relieve  a  majority  of 
voters  from  the  burdens  of  taxation  at  the  expense  of  a  few. 
Doubtless  it  was  with  this  laudatory  purpose  in  mind  that  they 
next  proceeded  to  enact  statutes  requiring  corporations  to  pay  an 
annual  license  tax  based  upon  either  their  authorized  capitaliza- 
tion, the  amount  of  capital  invested  in  the  State,  or  the  amount  of 
dividends  paid  annually  to  stockholders.  The  success  of  a  few 
States  in  securing  large  revenues  from  both  organization  and 
license  taxes  resulted  in  legislative  action  in  other  States  taken 
with  a  view  to  securing  a  proper  share  of  the  incorporation  busi- 
ness, wliich  had  hitherto  enured  to  the  benefit  of  two  or  three 
favored  Commonwealths.  This  may  be  properly  described  as  the 
era  of  the  "  tramp  corporation."  That  is,  it  was  about  this  time 
that  there  appeared  a  well-defined  tendency  on  the  part  of  incor- 
porators to  go  outside  of  the  State  of  their  residence  for  a  charter 
under  which  they  planned  to  do  business  exclusively  in  some 
foreign  State.  The  result  has  been  that  incorporators  have  grad- 
ually accustomed  themselves  to  going  for  their  charters  to  those 
States  which  are  commonly  known  as  leading  incorporating 
States.  In  this  group  will  be  found  at  the  present  time  New 
Jersey,  New  York,  Delaware,  West  Virginia,  South  Dakota, 
Maine,  Nevada,  Arizona,  Connecticut,  District  of  Columbia, 
Virginia,  Oklahoma,  North  Carolina,  and  Alabama. 

Speaking  in  general  terms,  it  may  be  said  that  a  great  majority 
of  the  l)u.sines3  corporation  acts  in  force  in  this  country  to-day  are 
sadly  in  need  of  revision.  Thus,  for  example,  the  incor|)oration 
acts  of  Iowa,  Nebraska,  New  Hampshire,  Vermont,  Rhode  Island, 
Arizona,  Mississippi,  and  the  District  of  Columbia  are  more  or 
less  c-rude  in  construction,  and  lack  many  of  the  essentials  of  com- 
jiletc  and  satisfactory  acts.  Tlic  incorporation  laws  of  Georgia, 
Pennsylvania,  and  Maryland  are  veritable  "legal  antifjues,"  and 
would  bear  revision  without  any  injury  whatever  to  the  best 
interests  of  those  Commonwealths.  The  incorporation  acts  of 
Indiana,  Minnesota,  Tennessee,  Pennsylvania,  and  Louisiana  arc 


INCORPORATION    AND    ORGANIZATION    OP   CORPORATIONS. 

SO  involved  as  to  lead  to  almost  certain  confusion  when  an  attempt 
is  made  to  take  advantage  of  their  provisions. 

In  regard  to  the  attitude  taken  by  the  legislatures  of  the  several 
States  in  the  framing  of  these  General  Acts,  attention  is  called  to 
some  remarks  of  the  Committee  on  Corporations  addressed  to  the 
legislature  of  Massachusetts  in  1903,  which  were  as  follows : 

"The  history  of  corporations,  as  well  as  the  logic  of  the  case, 
shows  that  there  are  possible  two  general  theories  as  to  the  State's 
duties  in  creating  corporations.  First,  the  old  theory  that  being 
creatures  of  the  State,  they  should  be  guaranteed  by  it  to  the  public 
in  all  particulars  of  responsibility  and  management ;  and  the  modern, 
quite  opposite  theory  that,  in  the  absence  of  fraud  in  its  creation  or 
government,  an  ordinary  business  corporation  should  be  allowed  to  do 
anything  that  an  individual  can  do.  Under  the  old  theory  the  capi- 
tal stock  of  a  corporation  was,  in  the  law,  considered  to  be  a  guarantee 
fund  for  the  payment  of  creditors  as  well  as  affording  a  method  of 
corporate  enterprise.  There  resulted  from  this  principle  not  only  the 
fundamental  proposition  that  the  capital  stock,  being  in  the  nature 
of  a  guarantee  fund,  should  be  paid  for  at  its  par  value  in  actual 
cash,  but  all  the  other  provisions  to  protect  creditors  or  other  persons 
having  dealings  with  the  corporation,  such  as  that  the  debts  of  a 
corporation  should  not  exceed  its  capital  stock,  designed  primarily  in 
the  iuterest  of  creditors,  and  secondarily  in  that  of  the  stockholders, 
who  are  looked  after  as  carefully  as  if  they  were  wards  of  the  State 
when  dealing  in  corporation  matters.  Under  the  modern  theory,  the 
State  owes  no  duty  to  persons  who  may  choose  to  deal  with  corpora- 
tions to  look  after  the  solvency  of  such  artificial  bodies  •,  nor  to  the 
stockholders  to  protect  them  from  the  consequences  of  going  into 
such  concerns,  the  idea  being  that  in  the  case  of  ordinary  business 
corporations  the  State's  duty  ends  in  providing  clearly  that  creditors 
and  stockholders  shall  be  at  all  times  precisely  informed  of  all  the 
facts  attending  both  the  organization  and  the  management  of  such 
corporations,  and  particularly  that  there  shall  be  full  publicity  given 
to  all  details  of  the  original  organization  thereof." 

It  may  be  of  some  practical  value  at  this  point  to  inquire  briefly 
what  are  the  advantages  of  conducting  business  under  corporate 
management  rather  than  as  an  individual  or  a  copartnership  en- 
terprise.    These  advantages  may  be  enumerated  as  follows : 

FirHt,   Immunity  from  individual  liabihty  for  debts  arising  out 
of  the  conduct  of  the  business. 
4 


INTRODUCTION. 

Second,  The  securing  of  the  element  of  perpetuity  for  the  life 
of  the  enterprise  in  hand,  so  that  the  death  of  any  of  the  parties 
interested  does  not  interfere  with  the  conduct  of  the  business. 

Third,  The  good-will  and  prestige  of  the  business  is  not  then  the 
property  of  an  individual,  but  belongs  to  the  corporation. 

Fourth,  The  ease  with  which  capital  is  obtained  for  the  use  of 
the  business  through  the  sale  of  stock,  thus  doing  away  with  the 
danger  or  necessity  of  admitting  general  or  special  partners  into 
the  concern. 

Fifth,  The  facility  with  which  money  can  be  obtained  by  the 
sale  of  bonds  or  preferred  stock. 

Sixth,  The  ease  with  which  individual  interests  in  a  business 
may  be  sold  or  transferred,  without  the  necessity  of  obtaining  the 
consent  of  a  third  party  to  the  sale. 

Seventh,  The  removal  of  the  danger  of  being  ruined  through 
the  dishonesty  or  extravagance  of  a  partner. 

Eighth,  Tlie  small  expense  connected  with  the  incorporation  of 
an  enterprise. 

Ninth,  The  wide  and  far  reaching  extension  of  the  powers  of  a 
corporation  as  compared  with  that  of  individuals  and  copartners. 

But  the  advantages  of  corporate  management  being  stated,  the 
question  then  arises  :  Where  sliould  the  business  man  of  to-day  go 
to  procure  a  charter  for  the  enterprise  he  may  have  in  hand  ? 
With  forty-five  States,  five  Territories,  and  the  District  of  Columbia 
all  offering  facilities  for  incorporation,  the  task  of  selection  there- 
from is  by  no  means  an  easy  one.  Where  the  capitalization  is 
small  or  the  corporate  purposes  simple,  it  is  sometimes,  though 
not  always,  best  to  procure  a  charter  from  the  State  where  the 
principal  prospective  incorporators  reside  or  where  they  propose 
to  carry  on  the  company's  business.  On  the  other  hand,  if  the 
capitalization  is  to  be  sought  in  other  localities,  tiie  proposed  cor- 
porate business  interstate  in  character,  or  the  prospective  capital- 
ization large,  and  the  corporate  purposes  sought  for  broad  in 
character,  then  it  may  be  of  great  advantage  to  procure  a  charter 
in  some  outside  State.  Under  such  circumstances  recourse  is 
usually  had  to  what  are  recognized  as  the  leading  incorporating 
States  already  referred  to. 

]>ut  to  go  further,  it  may  be  stated  that  a  jiropcr  investigation 
into  the  fpicstion  as  to  where  to  look  for  a  charter  best  suited  to 
the  immediate  purposes  of  the  proposed  corporation  must  necessa- 

5 


INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS. 

rily  entail  an  investigation  among  many  others  into  the  foHowing 
matters : 

1.  Nature  of  the  business  corporation  act  of  the  State  wherein 
it  is  proposed  to  incorporate. 

2.  Policy  of  such  States  towards  corporations,  domestic  and 
foreign. 

3.  Publicity  required  as  to  the  condition  of  corporations  or- 
ganized under  the  laws  of  that  particular  State. 

4.  Extent  of  legislative  control  over  private  corporations. 

5.  Nature  of  corporate  powers  desired. 

6.  Initial  expense. 

7.  Amount  of  annual  franchise  tax,  if  any. 

8.  Amount  of  capitalization  permitted,  and  the  par  value  of 
shares  allowed. 

9.  Time  within  which  the  capital  stock  must  be  paid  up. 

10.  Question  as  to  whether  stockholders'  and  directors'  meet- 
ings must  be  held  within  the  State  in  which  the  charter  is  procured. 

11.  Question  as  to  whether  the  principal  office  of  the  corpora- 
tion may  be  maintained  outside  of  the  State  of  its  organization. 

12.  Ascertainment  of  the  question  as  to  whether  stock  can  be 
legally  issued  for  property  or  services  instead  of  for  cash. 

13.  Inquiry  as  to  what  extent  the  appraisal  of  the  board  of  di- 
rectors of  the  property  or  services  paid  for  by  the  issuance  of 
stock  is  conclusive  upon  the  creditors  of  the  corporation  seeking,  in 
case  of  insolvency,  to  enforce  an  alleged  liability  for  unpaid  stock. 

14.  Power  to  issue  preferred  stock. 

15.  Par  value  of  the  corporate  shares  desired. 

16.  Power  to  create  debts. 

17.  Ease  or  difficulty  with  which  the  charter  may  be  amended. 

18.  Amount  of  stockholders'  liability,  if  any. 

19.  Extent  of  directors'  liability,  if  any. 

20.  Ease  or  difficulty  with  which  the  corporation  may  be 
dissolved. 

21.  Nature  of  the  laws  of  the  various  States  with  reference  to 
the  terms  and  conditions  under  which  foreign  corporations  may 
do  business  therein. 

Each  of  the  foregoing  questions  has  its  proper  bearing  when  it 
comes  to  deciding  where  to  go  for  a  charter  for  some  particular 
business  enterprise  which  it  is  proposed  to  prosecute  under  the 
form  of  corporate  organization. 
6 


INTRODUCTION. 

A  discussion  of  each  of  these  matters  will  be  found  in  Part  I. 
of  the  present  treatise. 

Turning  now  to  the  character  of  the  business  corporation  acts 
passed  by  the  legislatures  of  the  various  States  and  Territories,  it 
will  be  apparent  to  all  that  many  of  them  are  "  wonderfully  and 
fearfully  made." 

If  one  were  to  attempt  to  characterize  and  compare  the  various 
incorporation  acts  of  the  several  States  and  Territories,  it  would 
be  found  a  task  of  great  difficulty,  for  the  reason  that  it  is  almost 
impossible  to  find  a  logical  basis  for  classification.  Any  number 
of  arbitrary  classifications  might  be  adopted,  but  these  would  be 
of  no  value  to  either  the  practitioner  or  the  public  at  large.  What- 
ever attempt  may  be  made  here  along  this  line  must  be  based 
solely  upon  the  most  general  lines  of  similarity  of  the  incorporation 
acts  of  various  States.  As  a  preliminary  to  this,  it  has  been 
noted  that  certain  States  and  Territories  are  known  and  recog- 
nized as  "leading  incorporating  States."  The  ones  to  which  ref- 
erence is  made  are  New  Jersey,  New  York,  Delaware,  West 
Virginia,  Maine,  South  Dakota,  Connecticut,  Massachusetts,  Ari- 
zona, Nevada,  District  of  Columbia,  and  Virginia.  The  great  ma- 
jority of  charters  taken  out  annually  in  this  country  are  procured 
in  the  foregoing  enumerated  States  and  Territories. 

By  many  the  New  Jersey  act  is  considered  to  be  a  model  of 
what  a  business  corporation  act  should  be.  This  fact,  coupled 
with  the  large  revenue  secured  by  the  State  of  New  Jersey 
through  this  medium,  has  resulted  in  the  passage  in  other  States 
of  statutes  modelled  more  or  less  closely  after  the  New  Jersey  act. 
This  fact  prompts  the  first  classification  that  will  be  attempted 
liere,  which  will  be  termed  the  "  New  Jersey  Class."  Within  the 
limits  thereof  may  be  properly  included  not  only  New  Jersey,  but 
New  York,  Delaware,  West  Virginia,  Alabama,  Nevada,  North 
Carolina,  and  Viiginia  as  well. 

Another  classification  would  embrace  a  large  number  of  West- 
ern States  and  Territories,  which  to  a  greater  or  less  extent  have 
modelled  their  corporation  acts  along  the  same  general  lines  as 
that  of  California.  Tiiis  class  may  properly  be  referred  to  as  the 
"  California  Class,"  and  included  therein  will  be  found  Colorado, 
North  Dakota,  South  Dakota,  Oklalioma,  Idaho,  Montana,  Oregon, 
Washington,  Colorado,  Utah,  Wyoming,  Texas,  Arizona,  and  New 
Mexico. 

7 


INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS. 

Another  group  will  be  known  as  the  "  Maine  Group,"  for  the 
reason  that  the  plan  has  been  therein  adopted  of  having  the  cor- 
poration organized  before  a  certificate  of  incorporation  or  organiza- 
tion is  filed  with  or  issued  by  the  State  oflicials.  In  this  class 
belong  Maine,  IMassacliusetts,  Connecticut,  Illinois,  Missouri, 
Arkansas,  and  Indian  Territory. 

Iowa  and  Nebraska  have  acts  very  closely  resembling  each 
other,  and  may  be  grouped  as  the  "  Iowa  Class."  In  another 
groui>,  which  we  shall  call  the  "  Pennsylvania  Class,"  are  to  be 
found  Pennsylvania,  South  Carolina,  Florida,  Mississippi,  and 
Kansas.  The  distinguishing  feature  of  tliis  class  is  that  the  incor- 
poration scheme  adopted  embraces  a  petition  for  incorporation  by 
the  incorporators  addressed  to  State  officials,  to  be  followed  by 
the  filing  of  a  certificate  of  incorporation  if  the  petition  is 
favorably  acted  upon. 

Another  group  may  be  known  as  the  "  Kentucky  Group,"  in 
which  belong  Kentucky,  Ohio,  New  Hampshire,  Rhode  Island,  and 
Vermont.  The  resemblance  here,  it  must  be  admitted,  is  more  fan- 
cied than  real,  and  probably  does  not  depend  upon  any  actual  in- 
tent to  copy  the  first  Kentucky  act.  In  the  "  Michigan  Class  "  are 
to  be  found  Michigan,  Wisconsin,  and  Minnesota,  all  of  which 
possess  acts  resembling  each  other  in  certain  features.  It  is 
impossible  to  place  Georgia,  Indiana,  Louisiana,  Maryland,  and 
Tennessee  in  any  specified  class.  They  all  possess  inadequate 
and  certainly  unique  business  corporation  acts,  which  are  not 
likely  to  be  copied  by  any  other  State  in  this  day  and  generation. 


Wm-  J'  Kirkpatricky^ 


PART   I. 

INCORPORATION   AND   ORGANIZATION   OF 
CORPORATIONS. 


CHAPTER  I. 

DRAFTING   THE  'CHARTER. 

§  1,  General  Remarks  on  Corporate  Charters.  —  Incorporation 
is  a  form  of  expression  of  the  sovereign  political  power  of  the 
State  in  the  creation  of  a  juristic  person  possessing  such  limited 
powers  as  may  be  granted  to  it  by  the  legislative  branch  of  our 
State  or  national  government.  The  growth  of  the  corporate 
form  of  organization  affords  an  example  of  the  rapid  evolution 
from  a  somewhat  circumscribed  beginning  to  proportions  that 
can  only  be  described  in  this  age  of  industrial  trusts  and  com- 
binations as  colossal  in  character.  Even  the  courts  have  not 
infrequently  called  attention  to  the  modern  disposition  to  incorpo- 
rate everything.^ 

Much  of  this  is  due  no  doubt  to  the  passage  by  the  various  State 
legislatures  of  what  are  commonly  known  as  "  business  corpora- 
tion acts."  The  phrase  "  business  corporation,"  in  this  connec- 
tion, is  a  broad  term,  and  includes  all  corporations  engaged  in 
business  for  profit,  as  distinguished  from  municipal  and  eleemosy- 
nary corporations.2  The  creation  of  corporations  organized  for 
profit  by  special  act  is  now  forbidden  by  constitutional  pro- 
vision in  all  but  seven  of  the  States.^  The  existence  through- 
out the  country  of  general  incorporation  acts  has  fully  reversed 
the  old  policy  of  granting  exclusive  privileges  of  any  kind  to 
corporations.'' 

>  Seo   In  re  Italian    Mat   Ben.  Ass'n,  New    Hampshire,    Rho<lo    Island,    South 

4  Pa.  Dirt.  Rep.  3.')7.  Carolina,  and  Vormont. 

2  Adams/'.  Company, Fed. Canes  No. 47.  *  People  v.  Conii)any,  130  111.  2G8  ;     2 

8  Connecticut,  Florida,  Massachusetts,  N.  E.  7'J8. 

9 


§  1      INCORPORATION    AND    ORGANIZATION    OP^    CORPORATIONS.     [PART  I. 

The  purpose  of  restrietinii:  the  power  to  create  corporations  by 
special  act  lias  been  well  set  forth  as  follows  :  "  To  inaugurate  the 
policy  of  placing  corporations  of  the  same  kind  upon  a  i)erfect 
equality  as  to  all  future  grants  and  powers  by  making  such  laws 
applicable  to  all  parts  of  the  State  and  thereby  securing  the  vigi- 
lance and  attention  of  its  whole  representation,  and,  finally,  of 
making  the  judicial  construction  of  their  powers  or  the  restric- 
tions imposed  upon  them  equally  applicable  to  all  corporations  of 
the  same  class."  ^ 

It  is  universally  recognized  in  this  country  that  legislative 
authority  is  essential  to  the  creation  of  a  corporation.^  Incor- 
porators cannot  come  together  and  agree  to  become  a  corporation 
without  conforming  to  legislative  requirements.^  It  has  been  well 
said  *'  that  there  is  an  obvious  reason  for  making  such  organiza- 
tion Ijy  written  articles  of  agreement  a  condition  precedent  to  the 
exercise  of  corporate  rights.  It  is  the  basis  upon  which  all  subse- 
quent proceedings  are  to  rest,  and  is  designed  to  take  the  place  of 
a  charter  or  act  of  incorporation  by  which  corporate  rights  and 
privileges  are  usually  granted.  If  there  were  no  such  provisions, 
there  would  be  an  absence  of  any  provision  by  which  the  right  to 
exercise  corporate  powers  could  be  definitely  fixed  and  established, 
and  there  would  be  no  means  of  ascertaining  the  rights  of  stock- 
holders and  of  persons  dealing  with  such  association."  * 

The  charter  of  a  company  together  with  the  general  laws  of  the 
State  of  its  creation,  enumerating  and  limiting  the  powers  of  all 
corporations  of  that  class,  constitutes  the  measure  of  its  powers, 
and  the  enumeration  thereof  implies  the  exclusion  of  all  other 
powers  except  such  as  are  incidentally  or  necessarily  implied.^ 

The  instrument  by  wdiich  corporations  are  created  is  known  by 
different  names  in  various  ])arts  of  the  country.  The  term 
"  charter  "  is  a  word  which  has  descended  to  us  from  the  commoA 
law  existing  in  England  long  before  the  United  States  became  a 
nation.  It  originally  referred  to  the  specific  grant  of  certain 
privileges  running  from  the  sovereign  to  a  subject.  Subsequently 
it  was  applied  in  this  country  to  a  specific  act  of  the  legislature 

1  Atkinson  v.  Company,  15  O.  St.  21  ;  *  Utley  v.  Union  Tool  Co.,  11  Gray 
Bee  also  Ex  parte  Pritz,  9  la.  30.  (Mass.),  139. 

2  McKim  V.  Odom,  8  Bland's  Chan-  »  G.  L.  &  H.  I.  Co.  v.  Kainper,  73  Ala. 
eery  (Md.),  407.  325;     Steiner    v.    Steiner    L.    &    L.    Co. 

8  Stowe  V.  Flagg,  72  111.  397.  (Ala.),  26  So.  494;  Salt  Co.  v.  East  Sagi- 

naw, 13  Wall.  (U.  S.)  378. 
10 


CHAP.  I.]  DRAFTING  THE  CHARTER.  §  1 

creating  a  corporation  with  distinct  and  exclusive  purposes  and 
powers.  With  the  advent  of  the  passage  of  general  business  cor- 
poration acts  in  this  country,  the  word  "  charter "  has  been  re- 
placed by  such  terms  as  "  articles  of  incorporation,"  "  articles  of 
association,"  "  certificate  of  incorporation,"  "  certificate  of  organi- 
zation," and  "  petition  for  incorporation."  It  goes  without  saying 
that  under  the  Business  Corporation  Acts  referred  to  there  must 
be  articles  of  some  sort  properly  executed.^ 

It  has  been  said  that  the  essence  of  a  corporation  consists,  first, 
in  its  capacity  to  have  perpetual  succession  under  a  special  name 
and  in  an  artificial  form ;  second,  to  take  and  grant  property  and 
contract  obligations,  sue  and  be  sued  by  its  corporate  name  as  an 
individual ;  and  third,  to  receive  and  enjoy  corporate  privileges 
and  immunities.  The  first  two  are  the  privileges  of  the  incorpo- 
rators, and  the  third  is  the  franchise  of  the  corporation.^ 

As  far  back  as  1612  Lord  Coke  enumerated  the  essentials  of  a 
corporate  "charter  as  follows  :  (1)  lawful  authority  for  incorpora- 
tion ;  (2)  persons  to  be  incorporated;  (3)  corporate  name;  (4) 
domicile ;  (5)  words  sufficient  in  law  enumerating  the  purposes 
and  powers  of  the  corporation.  All  of  these  essentials  and  many 
more,  which  by  statute  are  made  essentials,  are  to  be  found  in 
the  business  corporation  acts  of  to-day. 

Referring  now  briefly  to  those  matters  which  are  by  statute  in  this 
country  made  necessary  parts  of  articles  of  incorporation, the  follow- 
ing may  be  said :  with  the  exception  of  Arkansas,  Georgia,  In- 
dian Territory,  Maine,  Massachusetts,  Mississippi,  New  Hampshire, 
Ohio,  Oregon,  Rhode  Island,  South  Carolina,  Tennessee,  and  Ver- 
mont, all  have  incorporation  acts  requiring  that  the  duration  of  cor- 
porate existence  shall  be  set  forth  in  the  articles  of  incorporation. 

Again,  all  but  New  Hampshire  and  Tennessee  require  a  state- 
ment as  to  the  number  and  i)ar  value  of  shares.  More  than 
half  the  States  prescriljo  that  the  names  of  the  first  or  tem- 
porary l)oard  of  directors  sliall  bo  inserted  in  the  articles,  while 
most  of  the  remaining  States  require  that  the  nnmbcr  of  directors 
only  shall  be  inserted.  Fully  half  the  States  autliorize  the  inser- 
tion in  the  articles  of  provisions  for  the  issuance  of  preferred 
stock.     A  few  of  the   Commonwealths  reiiuire  that  the  articles 

1  Abbott   V.    Company,    4    Neb.   41G;  *  gnell  „.  City  of  Chicago,  133  111.  413  ; 

Lu.sk  V.   Kiggs  (Neb.),  97   N.    W.  1033;     24  N.  E.  532. 
Childs  V.  Smith,  55  Barb.  (N.  Y.)  45. 

11 


^  -     INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS.     [PART  I. 

shall  contain  a  statement  as  to  the  amount  of  stock  subscriptions, 
the  amount  of  capital  stock  paid  in,  and  the  amount  of  capital 
with  which  the  corporation  will  begin  business.  Alaska,  Arizona, 
Delaware.  Louisiana,  Iowa,  Minnesota,  Nebraska,  and  Utah  require 
that  the  date  of  the  annual  meeting  shall  appear  in  the  articles. 
Alabama,  Connecticut,  Delaware,  Maryland,  Massachusetts, 
Nevada,  New  Jersey,  New  York,  North  Carolina,  South  Carolina, 
Utah,  Virginia,  West  Virginia,  and  Wisconsin  expressly  authorize 
the  insertion  in  the  articles  of  provisions  for  the  regulation  of  the 
internal  affairs  of  the  corporation.  If  it  is  desired  to  protect 
stockholders  from  personal  liability  for  corporate  debts,  there 
must  be  inserted  in  the  articles  of  incorporation  of  companies 
organized  under  the  laws  of  Arizona,  Delaware,  Iowa,  Kentucky, 
Louisiana,  Mississippi,  and  Utah  provision  specifically  exempting 
stockholders  from  such  liability. 

And  so  the  enumeration  might  be  continued  almost  indefinitely 
of  special  provisions  required  in  particular  States  in  connection 
with  the  incorporation  of  corporate  enterprises. 

Finally,  attention  is  called  to  the  various  steps  necessary  to 
create  a  corporation  under  the  modern  business  corporation  acts, 
qualified  in  every  respect  to  carry  out  the  purposes  for  which 
it  is  formed.  These  steps  may  be  enumerated  as  follows :  (1)  the 
drafting  of  the  articles  of  incorporation  ;  (2)  the  signing  of 
the  articles  by  the  requisite  number  of  incorporators,  and  ac- 
knowledgment of  the  same  before  an  officer  duly  authorized  to 
take  such  acknowledgments ;  (3)  filing  and  recording  the  arti- 
cles with  the  proper  State  and  county  officials  after  payment  of 
the  requisite  organization  tax  and  filing  and  recording  fees ;  (4) 
organization  of  the  corporation  ready  for  the  transaction  of  busi- 
ness; (5)  securing  the  necessary  permit  from  State  officials  (if 
any  is  required)  to  transact  business  within  the  domiciliary  State.^ 

§  2.  Incorporators.  —  An  incorporator  is  one  of  the  constituents 
of  a  corporation,  who  by  petition  or  by  means  of  the  execution 
of  articles  of  incorporation  invokes  the  exercise  of  the  supreme 
political  power  of  the  State  in  the  creation  of  a  corporation  for  the 
benefit  of  himself  and  associates  and  their  successors  in  interest.^ 

The  words  "  corporator"  and  "  incorporator"  have  essentially 

1  See  Carmody  v.  Powers,  60  Mich.  26 ;  ^  /„  ^e  Lady  Bryan  Co.,  1    Saw.  349  ; 

26  N.  W.  80.  E.   &  N.  Y.  C.  R.  K.  Co.  v.   Owen,  32 

Barb.  (N.  Y.)  615. 

12 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  2 

the  same  meaning.  The  qualifications  of  incorporators  vary 
with  the  State  from  which  the  charter  is  sought.  The  usual 
number  of  incorporators  required  by  the  various  acts  varies  from 
one  to  five.i  In  Arizona,  Iowa,  and  Nebraska  one  person  may 
incorporate.^  Residential  requirements  on  the  part  of  incor- 
porators exist  in  Alaska,  California,  Idaho,  Kansas,  Maryland, 
New  York,  North  Dakota,  Ohio,  Oklahoma,  Pennsylvania,  South 
Dakota,  Texas,  Utah,  and  Wisconsin.^  Failure  to  state  residence 
in  articles  is,  however,  not  fatal  to  corporate  existence.* 

The  general  rule  is  that  citizenship  is  not  necessary  unless 
specifically  required  by  the  statute  of  incorporators.^  It  has  been 
said  that  in  the  absence  of  statute  providing  otherwise  incorpora- 
tors must  be  stockholders.^  The  rule,  however,  appears  to  be 
otherwise  in  Oregon,  Pennsylvania,  South  Dakota,  Texas,  Tennes- 
see, and  Georgia.^  In  a  majority  of  the  States,  however,  statutes 
expressly  prescribe  that  incorporators  must  be  subscribers  for  at 
least  one  share  of  the  capital  stock  of  the  proposed  corporation. 

If  married  women  are  under  no  disabilities,  they  may  act  as 
incorporators.^  Aliens  may  be  incorporators  if  statute  does  not 
provide  otherwise.^ 

Some  of  the  States  expressly  limit  the  right  to  become  incorpo- 
rators to  natural  persons.  However,  where  no  such  express  limi- 
tation exists,  there  is  no  question  but  what  the  word  "  person," 
when  used  in  the  statute  limiting  such  matters,  would  not  permit 
corporations  to  act  as  incorporators.^*^ 

The  rule  seems  to  be  that  incorporators  must  be  of  full  age." 
Incorporators  must  also  be  known  persons.^^     The  modern  rule 

i  See  Tart  III.  Table  4,  page  574.  67  N.  W.  947 ;  Ramsey  v.  Tod,  95  Tex. 

2  P.  B.  Corporation  v.  Lainson,  16  Me.  614  ;  69  S.  W.  133;  Byrnes  r.  Beck,  10  Ga. 

224;   Ulmer  v.    Company,    98    Me.    579;  121;    B.  B.  &  T.  Co.' y.  J.  B.  T.  Co.,  101 

57  Atl.  1001.  Tenn.  545;  48  S.   W.   228;  Wechselberg 

8  See  Part  III.  Table  5.  page  575.  v.  Bank,  64  Fed.  90. 

*  State  f.  Foulkes,  94  Ind.  493  ;  see  also  8  /„    ^.g    application    for    charter,   27 

Ilalberti;.  A.s.sociation  (Tex.  Civ.  App.),34  Weekly  Notes  of  Cases  (Pa),  399;  In  re 

S.  W.  636.  Century  Club,  27  W,  N.  C.  (Pa.)  399. 

^  M.  N.  F.  Co.  V.   Raumbach,  32  Fed.  »  Lamar  v.  Browne,  92  U.  S.   187;  23 

205  ;  A.  S.  Co.  v.  lleidenbeimer,  80  Tex.  Law.  Kd.  650. 
344  ;  15  S.  \V.  1038.  ^"  C.  H.  Co.  v.  P.  R.  Co.,  31   N.  J.   Eq. 

6  Gulliver  v.  Roelle,  100  111.  141  ;  Byron-  475 ;  Insurance  Co.  v.  N.  H.  P.  Co.,  37  La. 

ville  Creamery  A.'^s'n  r.  Ivers  (Minn.),  100  An.  233. 

N.  \V.  387;  Cha.se  v.  Lord.  77  N.  Y.  11;         "  Matter    of    Globe,    etc.    Ass'n,     135 

Medler  v.  Company,  6  N.  Mex.  331.  N.  Y.  280;  32  N.  E.  122;  H.  F.  Road  Co. 

^  Coyote,  etc.  Co.  v.  Ruble,  8  Ore.  284  ;  v.  Townsend,  13  Ont.  Ap.  Rep.  534. 
Dcn.smore  Oil  Co.  v.  Densmore,  64  Pa.  St.         >2  c.  R.  R.  of  N.  J.  v.  P.  R.  R.  Co.,  31 

43 ;  Singer  Mfg.  Co.  v.  Peck,  9  S.  I).  29 ;  N.  J.  Eq.  475. 

13 


§  o      INCORrORATlON    AND    ORGANIZATION    OF    CORPORATIONS.     [PART  I. 

seems  to  be  that  incorporators  are  merely  conduits  for  the  pur- 
pose of  organization  for  the  benefit  of  future  stockholders.^ 
Under  this  rule  there  can  be  no  valid  legal  question  raised  at  this 
day  as  to  the  legality  of  the  use  of  what  arc  commonly  known  as 
''  dummy  incorporators "   in   the   organization   of   corporations.^ 

§3.  Corporate  Name.  —  Every  corporation,  like  an  individual, 
must  have  a  name  under  which  its  business  must  be  carried  on. 
It  has  been  said  "  that  the  name  goes  to  the  very  being  of  the  cre- 
ation, the  knot  of  the  combination,  without  which  corporations 
could  not  do  their  corporate  acts,  without  which  it  is  unable  to 
implead  and  be  impleaded,  to  take  any  action  until  it  hath  gotten 
a  name."  ^  The  word  "  company,"  which  is  usually  a  part  of  the 
corporate  name,  does  not  necessarily  imply  a  corporation.*  In 
Alabama,  Colorado,  Connecticut,  Delaware,  Kansas,  Kentucky, 
Missouri,  North  Carolina,  and  Virginia  statutes  exist  which  pro- 
vide that  the  corporate  name  must  end  with  some  such  word  as 
"  association,"  "  company,"  "  corporation,"  "  club,"  "  society," 
"syndicate,"  or  "limited."^ 

In  a  number  of  the  States  corporations  upon  organization  are  for- 
bidden to  take  the  same  name  as  that  of  an  existing  domestic  cor- 
poration, or  one  so  similar  as  to  be  calculated  to  deceive  or  cause 
confusion.^  Some  few  of  the  States  go  still  further  and  forbid  the 
use  of  the  name  of  any  foreign  corporation  by  newly  created  do- 
mestic corporations,  provided  the  former  has  secured  a  permit  to 
do  business  in  the  State.  The  States  here  referred  to  are  Connec- 
ticut, Delaware,  Kentucky,  Massachusetts,  New  York,  Utah,  Vir- 
ginia, and  West  Virginia.  In  the  absence  of  such  statute  there  is 
ordinarily  no  restriction  on  the  right  to  take  the  corporate  name 
of  a  foreign  corporation.'^ 

The  corporate  name  is  the  property  of  the  corporation,  and 
equity  will  protect  the  corporation  in  any  jurisdiction  from  the 

1  Densmore  Oil  Co.  v.  Densmore,  64  *  Clarke  v.  Insurance  Co.,  7  Mo.  App. 
Pa.  St.  43.  77. 

2  Salamon  v.  Salamon  Co.  (Honse  of         ^  On  use  of  word  "  limited  "  see  Sparka 
Lords  Cases),   4.5  Weekly  Rep.  193;    75  v.  Company,  3  Idaho,  306 ;  29  Pac.  134. 
Law  Times  Rep.  426.     Hut  see  Louisville  ®  See  State  v.  McGrath,  75  Mo.  424. 
Banking  Co.  v.  Eisenman,  94  Ky.  83;   21  7  L.  V.  C.  Co.  v.   Hamblen,    23    Fed. 
S.  \V.  531,  1049;  Tillyer  v.  Hero  Jar  Co.,  225;   G.   I.  R.   G.    M.   Co    v.  G.   R.  Co., 
17  Phil.  (Pa.)  153.       '  128  U.  S.   598;  9  S.    Ct.  166;  People  v. 

3  Smith  V.  Plank  Road,  30  Ala.  650  ;  H.  L.  Sus.  Co.,  Ill  Mich.  405  ;  69  N.  W. 
Hazelton  Boiler  Co.  v.  Company,  137  111.  653. 

231 ;  28  N. E.  248. 

14 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  4 

fraudulent  use  of  another  name  so  like  it  as  to  deceive  the  public 
and  rob  it  of  its  business.^  The  mere  fact  that  the  corporation 
against  whom  a  restraining  order  is  asked  for  has  secured  a 
charter  in  that  particular  State  while  the  complaining  corporation 
lias  never  been  incorporated  there  or  even  procured  a  permit  to  do 
business  there,  will  not  in  most  jurisdictions  prevent  the  granting 
of  such  relief.^ 

Where  statutes  exist,  such  as  have  been  referred  to,  forbidding 
the  use  of  similar  corporate  names,  while  the  attitude  of  the  Sec- 
retary of  State  in  such  cases  with  respect  to  the  issuance  of  a  cer- 
tificate of  incorporation  is  ministerial,  yet  he  has  reasonable 
discretion  in  the  matter  and  cannot  be  mandamused  whgn  exercis- 
ing such  discretion.^  In  protecting  the  use  of  a  corporate  name 
the  courts  proceed  on  the  theory  that  such  name  should  be  pro- 
tected in  equity  on  principles  analogous  to  those  which  prevail 
in  the  use  of  trademartcs.* 

§  4.  Corporate  Purposes.  —  By  corporate  purposes  is  meant  the 
specific  declaration  in  the  articles  of  incorporation  of  the  nature 
of  the  business  which  the  corporation  is  authorized  to  carry  on. 
Such  statement  is  a  matter  which  primarily  concerns  the  stock- 
holders, and  to  a  less  degree  the  State  under  whose  authority  the 
corporation  is  created. 

In  the  granting  of  corporate  privileges  it  is  important  to  specify 
the  purposes  and  objects  because  the  courts  should  have  some 
guide  in  keeping  them  within  the  powers  granted  and  conveyed. 
Unless  they  be  specified  with  particularity  in  the  petition  or  in  the 
granting  thereof,  they  might  do  as  they  pleased  and  the  law  be 
powerless  to  restrain  them.*  The  purposes  enumerated  in  the 
articles  of  association,  read  in  connection  with  the  general  laws 
under  wliich  the  charter  is  procured,  is  the  measure  of  the  powers 
of  the  corporation.^ 

1  Inil.  Milt.  Dcp.  Co.  v.  Central  Mnt.  Iliggins  Soap  Co.,  144  N.  Y.  462;  39 
Dep.  Co.,  2:i  Ky.  L.  K.  2247  ;  Br,  S.  W.  N.  K.  490;  American  Clay  Mfg.  Co.  v. 
1032.  American  Clay  Mfg.  Co.,  198  Pa.  St.  189  ; 

2  Ind.  Mnt.  Dep.  Co.  v.  Central  Mut.  47  All.  9.36;  Ilazleton  Boiler  Company  v. 
Dep.  Co.,  2.'}  Kv.  L.  K.  2247  ;  66  S.  \V.  Iliizleton  T.  Boiler  Co.,  142  111.  494  ;  30 
1032  ;  P.  T.  S.  1).  1.  Co.  r.  P.  T.  Co.,  123  N.  E.  339. 

Fed.  534.  ^  /"  re  John  II.  Deveaux  ci  a/.,  54  Ga. 

3  State  ex  rcl.  v.  McGrath,  92  Mo.  355.      673. 

♦  P.  T.  S.  1).  I.  Co.  V.  P.  T.  Co.,  123  »  O.  B.  &  M.  R.  Co.  v.  Union  Steam- 

Fed.  534  ;  Grand    Lodge  v.  Graham,   9G     boat  Co.,  107  U.  S.  98  ;  27  L.  E.  413;  Salt 
Iowa,  592;  65  N.  \V.  837  ;  IIi;:gins  Co.  v.     Co.  i;.  East  Saginaw,  13  Wall.  (U.  8.)  378. 

15 


§  4     INCORrORATION    AND    ORGANIZATION    OP   CORPORATIONS.     [PART  I. 

It  must  be  remembered  that  articles  of  asaociation  under  general 
acts  arc  the  productions  of  private  citizens  gotten  up  in  the  interest 
of  the  parties  who  propose  to  become  incorporated,  and  who  are 
stimulated  by  their  zeal  for  personal  advantage  rather  than  for  the 
general  good.  They  are,  so  far  as  permitted  in  accordance  with 
the  law,  substitutes  for  legislative  action  in  the  place  of  the  will 
of  the  people  of  the  State  as  formerly  expressed  by  acts  of  the 
legislature.  While  it  was  true  at  one  time  that  all  grants  from 
the  State  to  corporations  were  strictly  construed,  this  principle  has 
been  subject  to  considerable  modification  of  late  years.  This  is 
owing  to  the  passage  of  general  incorporation  acts  which  were  un- 
doubtedly framed  and  passed  with  the  intent  to  liberalize  the  law 
in  respect  to  such  grants.^ 

"  It  is  fundamental  that  a  corporation  can  be  created  and  exist 
only  by  statutory  authority,  and  if  a  corporation  organizes  under 
a  general  act  and  inserts  in  its  articles  of  incorporation  regula- 
tions and  provisions  additional  to  those  required  by  the  creative 
statute,  such  additional  regulations  and  privileges  are  voidable  at 
the  will  of  the  State,  nor  is  the  corporation  permitted  to  place  any 
restrictions  on  the  manner  of  exercising  its  corporate  duties  other 
than  the  statute  provides.  If  the  corporation  claims  the  right  to 
exist  for  a  certain  purpose,  it  must  show  that  it  was  organized 
under  a  statute  authorizing  the  creation  of  a  corporation  for  that 
particular  purpose."  ^ 

The  statutes  of  the  various  States  differ  of  course  with  respect 
to  the  character  of  the  purposes  for  which  corporations  may  be 
formed.  Some  of  them  permit  incorporation  for  any  lawful  busi- 
ness, without  any  limitations  whatsoever.  The  phrase  "other 
lawful  business,"  found  in  so  many  of  the  statutes,  is,  according  to 
the  weight  of  authority,  held  not  to  be  subject  to  the  noscitur  a 
80CU8  rule,  and  is  used  as  a  "  catch-all "  for  the  purpose  of  includ- 
ing any  kind  of  business  for  pecuniary  profit  not  otherwise  pro- 
vided for.3  In  setting  out  the  purposes,  this  must  be  done  with 
reasonable  certainty  and  definiteness.  For  example,  an  appli- 
cation for  a  charter  was  refused  in  Pennsylvania,  where  it  was 
stated    that,   in    addition    to    certain    enumerated    objects,  the 

1  Finnegan  v.   Noerenberg,    52   Minn.  »  Brown  v.  Corbin,  40    Minn.  508 ;  42 
239;  53  N.  W.  11.50.  N.  W.  481  ;  Green  v.  Breard,  35  La.  An. 

2  Indiana  Bond  Co.  v.   Ogle  et  ah,  22  875  ;  Dittman  v.  Company  (N.  J.),  54  Atl. 
Ind.  Ap.  593  ;  54  N.  E.  407.  570. 

16 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  4 

corporation  was  organized  for  "  such  other  purposes  as  might  be 
agz-eed  upon  in  the  future."  ^ 

In  many  of  the  States  express  mention  is  made  of  the  various 
specific  purposes  for  which  corporations  may  be  created.  As  a 
general  rule  the  incorporators  are  required  to  set  out  in  their 
articles  of  association  the  specific  purpose  or  purposes  for  whicb 
the  proposed  corporation  is  to  be  organized.^ 

Turning  now  to  the  various  States,  we  find  the  following  statu- 
tory provisions  relative  to  the  purposes  for  which  business  cor- 
porations may  be  created.  In  Alabama  for  any  general  business 
or  lawful  enterprise.  In  Arizona  for  the  transaction  of  any  law- 
ful business.  In  Arkansas  for  the  transaction  of  any  lawful 
business.  In  Colorado  for  any  lawful  purpose.  In  California  for 
any  purpose  for  which  individuals  may  associate  themselves.  In 
Connecticut  for  the  transaction  of  any  lawful  business.  In  Dela- 
ware for  the  transaction  of  any  lawful  business  or  to  promote  or 
conduct  any  legitimate  object  or  objects.  In  the  District  of  Co- 
lumbia any  enterprise  or  business  which  may  be  lawfully  con- 
ducted by  an  individual,  except  banking,  real  estate,  and  railroads. 
In  Florida  for  the  transaction  of  any  lawful  business.  In  Georgia 
for  auy  purpose  intended  for  pecuniary  profit.  In  Idaho  for  any 
purpose  for  which  individuals  may  lawfully  associate  themselves. 
In  Illinois  for  any  lawful  purpose.  In  Indiana  for  the  transac- 
tion of  any  kind  of  mining,  mercantile,  chemical,  and  manufactur- 
ing business ;  also  grain  elevator,  union  stock  yards,  and  transit 
companies.  In  Iowa  for  the  transaction  of  any  lawful  business. 
In  Kansas  for  the  transaction  of  any  kind  of  manufacturing, 
mining,  chemical,  and  mercantile  business.  In  Kentucky  for 
the  transaction  of  any  lawful  business,  or  to  promote  or  conduct 
any  legitimate  oi)ject  or  i)urpose.  In  Louisiana  for  the  transaction 
of  any  lawful  business,  except  stock  jobbing.  In  Maine  for  the 
transaction  of  any  lawful  business.  In  Maryland  for  the  trans- 
action of  any  kind  of  mining,  manufacturing,  chemical,  or  mer- 
cantile business;  also  for  shipbuilding  and  industrial  purposes, 
and  for  the  transportation  of  the  productsof  any  manufacturing  or 
mining  corporation.  In  Massachusetts  for  any  lawful  purpose 
except  to  buy  or  sell  real  estate  or  to  sell  or  nmnufaf.'turc  intoxi- 
cating liquors.     In  Michigan  for  the  transaction  of  any  lawful 

'  In  re  Journalists'  Fond,  8  Phil.  212.  2  yeg  iJughes  v.  Compauy,  34  Md.  316. 

2  17 


v^  4     INCORrORATION    AND    ORGANIZATION   OP   CORPORATIONS.     [PART  I. 

business,  but  only  a  manufacturing  and  a  mcrcantilo  business  can 
be  carried  on  by  the  same  corporation.  In  Minnesota  for  the 
transaction  of  any  lawful  business.  In  Mississij)pi  for  any  lawful 
purpose.  In  Missouri  for  any  purpose  intended  for  profit  or 
gain.  In  Montana  for  the  transaction  of  any  kind  of  manufact- 
uring, mining,  chemical,  or  mercantile  business,  or  for  any  lawful 
commercial  or  industrial  business,  or  for  carrying  on  any  branch 
of  business  designed  to  aid  in  or  protect  the  interests  of  the 
company.  In  Nebraska  for  the  transaction  of  any  lawful  busi- 
ness. In  Nevada  for  any  branch  of  trade  or  business,  commerce, 
foreign  or  domestic.  In  New  Hampshire  for  the  transaction  of 
any  lawful  business.  In  New  Jersey  for  any  lawful  purpose  or 
purposes  whatever.  In  New  Mexico  for  mining  and  manufactur- 
ing or  other  industrial  purposes.  In  New  York  for  any  lawful 
purpose  or  purposes.  In  North  Carolina  for  engaging  in  any 
lawful  business.  In  North  Dakota  for  any  purpose  for  which  in- 
dividuals may  lawfully  associate  themselves.  In  Ohio  for  any 
purpose  for  which  individuals  may  lawfully  associate  themselves, 
except  for  carrying  on  a  professional  business.  In  Oklahoma  for 
mining,  manufacturing  or  other  industrial  purposes.  In  Oregon 
for  the  purpose  of  engaging  in  any  lawful  enterprise,  business 
pursuit,  or  occupation.  In  Pennsylvania  for  the  transaction  of 
any  lawful  business,  but  not  for  more  than  one  kind  of  business. 
In  Rhode  Island  to  carry  on  any  ordinary  business.  In  South 
Carolina  for  any  purpose  or  purposes  whatsoever  or  two  or  more 
combined.  In  South  Dakota  for  the  transaction  of  any  lawful 
business.  In  Tennessee  for  the  trade  of  the  merchants,  and  for 
mining,  boring,  manufacturing,  and  other  specified  purposes.  In 
Texas  for  manufacturing  or  mining  and  the  purchase  of  goods, 
wares,  and  merchandise  ;  also  for  buying  and  selling  agricultural 
products  and  for  other  specified  purposes.  In  Utah  for  any  pur- 
pose for  which  individuals  may  lawfully  associate  themselves. 
In  Vermont  for  carrying  on  any  object  or  business  not  repugnant 
to  public  policy  or  the  laws  of  the  State.  In  Virginia  for  any  pur- 
pose which  may  be  lawfully  conducted  by  individuals  or  l)y  a  body 
politic  and  corporate.  In  Washington  for  any  trade  or  business. 
In  West  Virginia  for  any  purpose  or  business  useful  to  the  public 
for  which  a  firm  or  copartnership  may  be  lawfully  formed.  In 
Wisconsin  for  any  lawful  business  or  purpose  whatever.  In 
Wyoming  for  the  transaction  of  any  kind  of  manufacturing, 
18 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  O 

mining',  mercantile,  and  chemical  business  or  any  business  designed 
to  aid  in  the  industrial  or  productive  interests  of  the  company. 

The  foregoing  enumeration  of  purposes  for  which  corporations 
niav  be  created  in  the  various  Commonwealths  named  above, 
should  be  qualified  by  the  statement  that  in  most  of  them  special 
acts  are  provided  for  certain  classes  of  corporations,  such  as 
banks,  trust  companies,  insurance  companies,  etc.,  under  which 
corporations  of  that  character  must  be  incorporated.  Among  the 
few  States  in  which  corporations  may  be  created  for  any  lawful 
purpose  whatever  including  the  excepted  classes  above  referred 
to  are  Alabama,  Virginia,  and  West  Virginia. 

Finally,  attention  is  called  to  the  fact  that  in  some  few  of 
the  Commonwealths  the  statutes  require  that  the  certificate  set 
forth  the  particular  trade  to  be  carried  on.  Such  a  provision  is 
in  legal  effect  equivalent  to  requiring  that  the  purpose  or  object 
of  the  j)roposed  corporation  be  set  forth. 

§  5.  Number  of  Corporate  Purposes  Permitted.  —  Difficulty  fre- 
quently arises  in  determining  whether  under  the  provisions  of 
some  particular  business  corporation  act  parties  may  incorporate 
for  the  transaction  of  more  than  one  line  of  business.  In  some 
of  the  States,  notably,  Alabama,  Connecticut,  Delaware,  Maine, 
Massachusetts,  Xevada,  New  Jersey,  New  York,  North  Carolina, 
A^irginia,  and  West  Virginia,  the  acts  are  so  framed  as  to  clearly 
authorize  incorporation  of  companies  for  any  number  of  purposes 
not  covered  by  special  acts.  In  all  the  remaining  States,  with  the 
exception  of  District  of  Columbia,  Indiana,  Kansas,  Louisiana, 
Miciiigan,  Missouri,  Ohio,  Pennsylvania,  Tennessee,  Texas,  and 
Wyoming,  the  matter  is  greatly  simplified  by  State  officials  con- 
struing the  statutes  of  their  respective  States  to  permit  the  incor- 
poration of  companies  for  tlie  transaction  of  any  number  of  lines 
of  business  not  regulated  by  special  statutes. 

In  Georgia,  Indiana,  Maryland,  Michigan,  Pennsylvania,  Tenn- 
essee, and  Texas  tlie  dilTercnt  lines  of  business  are  divided  into 
classes.  Generally  speaking,  parties  are  not  ))crmitted  to  incor- 
porate for  linfs  of  businr;ss  included  in  more  than  one  of  these 
classes. 1  In  Wyoming  tin;  law  re(iniros  the  certificate  of  incor- 
l)oration  to  have  but  one  general  ol)ject.  In  Ohio  only  one 
purpose  may  l)e  inserted.  In  Knnsas  and  Missouri  the  number  of 
purposes  is  only  limited  by  the  i)rovi8ion  of  law  that  the  name  of 

1  The  rule  is  otherwise  in  Indiana  and  Maryland. 

19 


§  5     INCOKrOPvATION    AND    ORGANIZATION    OP   COllPOllATIONS.     [PAIiT  I. 

the  corporation  shall  indicate  the  nature  of  the  business  to  be 
carried  on  by  it. 

Some  suggestions  along  the  line  of  determining  the  question  as 
to  the  number  of  purposes  which  may  be  inserted  in  articles  of 
incorporation  in  any  particular  States  may  be  here  pi-eseuted, 
"Where  the  statute  permits  corporations  to  be  formed  lor  several 
purposes  named  in  the  alternative,  separated  by  the  disjunctive 
conjunction  "  or,"  it  is  held  that  a  corporation  cannot  be  organized 
thereunder  for  more  than  one  of  such  purposes,  and  that  articles 
of  incorporation  which  include  more  than  one  of  them  are  void, 
and  that  incorporation  under  them  will  be  refused.^ 

Again,  it  would  appear  that  where  incorporation  for  only  one 
purpose  is  permitted,  incorporators  must  make  a  choice  of  such 
purpose  themselves  in  the  first  instance,  for  the  courts  have  quite 
generally  refused  to  make  it  for  them.''^ 

On  tins  general  subject  the  Supreme  Court  of  Texas  in  a  recent 
case  spoke  as  follows :  "  A  charter  must  set  forth  the  purpose  for 
which  it  is  formed.  This  for  the  reason  that  if  it  had  been  in- 
tended that  a  corporation  might  be  created  for  two  or  more  of  the 
purposes  specified  in  the  statute,  it  would  have  been  proper  to 
have  stated  '  purpose  or  purposes  for  which  it  is  formed.'  The 
use  of  the  word  '  purpose  '  in  the  singular  number  tends  to  show 
that  it  was  the  intention  of  the  legislature  to  authorize  the 
creation  of  a  corporation  for  only  one  purpose.  It  may  be  true 
that  the  use  of  the  singular  number  may  not  be  the  conclusion  of 
the  question,  and  that  if  there  were  other  purposes  in  the  act 
which  either  by  express  declaration  or  clear  implication  indicate 
that  it  was  intended  to  authorize  incorporation  for  two  or  more  of 
the  designated  purposes,  whether  in  the  same  subdivision  or  not, 
we  should  so  hold.^ 

Finally,  it  may  be  said  that  unless  the  statute  expressly  or 
impliedly  permits  the  insertion  of  more  than  one  purpose  in  the 
articles,  the  insertion  of  two  or  more  purposes  therein  will  clearly 
justify  State  officials  in  refusing  to  allow  the  filing  of  the  same.* 

1  State  V.  Beck,    81    Ind.  500;  In  re  »  Ramsey  v.  Tod,   95  Texas,  614;  69 

John  H.  Deveaux  et  ul.,  54  Ga.  673.  S.  W.  133. 

■•^  Williams   v.   Company,  25  Ind.   Ap.  *  Ind.  Bond  Co.  v.  Ogle,   22    Ind.   A  p. 

351  ;  57  N.  E.  581  ;  Bayou  Cook  Nav.  &  593;    54  N.  E.  407;    Woodberry   v.   Mc- 

Fisherie3   Co.    v.   Doul'lut    (La.),  35    So.  Clurg,  78  Miss.  831;    29  So.  514;    Kins- 

729;  Or.  By.  &  Nav.  Co.  f.  Company,  130  ton,  etc.  Co.  v.   Stroud,   132  N.   C.  413; 

U.  S.  1 ;  9  S.  Ct.  409 ;  State  v.  Company,  43  S.  E.  9. 
88  Wis.  512;  60  N.  W.  796. 

20 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  6 

§  6.  Collateral  Attack  upon  Corporate  Purposes  and  Powers.  — 
The  terra  "  collateral  attack,"  as  used  in  corporation  law,  has 
reference  to  the  attempt  of  parties  other  than  the  State  (in  direct 
proceedings)  to  question  the  validity  of  a  corporation's  existence 
and  purposes  or  its  riglit  to  exercise  corporate  powers.  The  law 
reports  are  full  of  conflicting  decisions  relating  to  the  general 
subject  of  collateral  attack  upon  corporate  existence,  purposes, 
and  powers.  The  seemingly  hopeless  confusion  which  exists 
among  the  courts  on  this  subject  is  largely  due  to  a  failure  on 
their  part  to  recognize  that  the  matter  has,  by  a  gradual  process 
of  statutory  and  judicial  legislation,  become  at  the  present  time 
an  academic  one.  It  is  proposed  at  this  point  to  discuss  at 
length  not  only  the  question  of  the  right  to  collaterally  attack 
the  legality  of  corporate  purposes  as  set  forth  in  articles  of  incor- 
poration, but  as  well  to  consider  in  this  same  connection  the  right 
to  collaterally  attack  the  validity  of  corporate  existence  and  the 
right  to  exercise  corporate  powers.  This  for  the  reason  that  all 
these  questions  are  so  closely  related  to  each  other  as  to  properly 
permit  of  discussion  at  one  and  the  same  time. 

At  the  outset,  a  word  should  be  said  as  to  the  policy  that  would 
seem  to  dictate  the  establishment  of  statutory  and  judicial  rules, 
forbidding  the  impeachment  by  indirect  methods  of  a  corpora- 
tion's right  to  exist.  In  the  first  place,  such  attacks  are  rarely 
made  except  in  an  attempt  to  defeat  the  ends  of  justice,  by 
setting  up  defences  to  actions  brought  against  debtors  by  cor- 
porations, in  which  the  parties  interposing  the  same  have  generally 
no  direct  interest  whatever.  If  the  State  legislatures  had  not  by 
legislation,  and  the  courts  by  an  extended  application  of  the  doc- 
trine of  estoppel,  forbidden  such  collateral  inquiry  into  these 
matters,  it  would  have  been  impossible  in  a  great  number  of  cases 
fur  litigants  to  enforce  their  just  rights  in  courts  of  law.  If  such 
a  rigiit  were  admitted  in  one  case,  it  must  be  in  all.  Cor])ora- 
tions  might  thus  be  called  upon  years  after  their  creation  to  cs- 
taljlish  the  validity  of  corporate  existence,  purjjoses,  and  i)()wers, 
whicii  public  policy  should  hold  to  be  valid  as  against  all  parties 
exccj)t  the  State.^ 

Having  already  observed  that  the  question  of  the  right  to  col- 
laterally attack  corporate  existence,  purpo.ses,  and  powers  has 
become  largely  an  academic  one,  it  will   now  be  proper  to  sub- 

1  Duggan    I'.    Comp.iuy,  11    Col.  113;   17   Pac.  105. 

21 


§  G     INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS.      [PART  I. 

stantiatc  this  stateincnt.  That  the  discussion  of  this  qncstion 
may  proceed  along  logical  lines,  attention  is  first  called  to  the 
alleged  right  to  collaterally  attack  the  validity  of  corporate 
existence. 

In  twenty-six  of  the  States  and  Territories  collateral  inquiry 
into  the  legality  of  corporate  existence  is  expressly  forbidden  by 
statute,  the  right  to  impeach  such  existence  being  expressly  re- 
served to  the  State  alone  by  means  of  direct  proceedings  brought 
for  that  purpose.^  Thus,  in  California  it  is  provided  that  where 
a  corporation  claims  in  good  faith  to  be  a  corporation  and  doing 
business  as  such,  its  right  to  exercise  corporate  powers  shall  not 
be  inquired  into  collaterally  in  any  private  suit  to  which  such 
de  facto  corporation  may  be  a  party. 

In  Delaware  the  law  provides  "  that  no  corporation  shall  be 
permitted  to  set  up  or  rely  upon  the  want  of  legal  organization  as 
a  defence  in  any  action  against  it,  nor  shall  any  person  transact- 
ing business  with  such  corporation,  or  sued  for  injury  to  its  prop- 
erty be  permitted  to  rely  upon  such  want  of  legal  organization  as 
a  defence."  In  Georgia  the  law  provides  that  the  existence  of  a 
corporation  claiming  a  charter,  under  the  color  of  law,  cannot  be 
collaterally  attacked,  and  that  all  who  dealt  with  the  corporation 
as  such  are  estopped  from  denying  its  corporate  existence.  In 
Iowa,  Kentucky,  and  Nebraska  statutes  exist  essentially  the  same 
as  that  in  force  in  Delaware  as  cited  above.  In  Nebraska  the  law- 
provides  that  evidence  that  the  corporation  is  doing  business 
under  a  certain  name  shall  be  prima  facie  proof  of  its  due  incor- 
poration or  existence  pursuant  to  law. 

In  Montana  collateral  inquiry  into  corporate  existence  is  ex- 
pressly forbidden,  until  the  fact  that  there  was  in  fact  no  such  cor- 
poration has  been  adjudged  in  a  direct  proceeding  brought  for 
that  purpose.  In  South  Carolina,  it  is  provided  that  no  irregu- 
larity shall  be  held  to  vitiate  the  corporation  until  a  direct  pro- 
ceeding to  set  aside  or  annul  the  charter  be  commenced  by  the 
proper  authorities  of  the  State,  and  all  acts  and  contracts  entered 
into  shall  have  the  same  force  and  effect  as  if  no  irregularity  existed. 

In  Soutli  Dakota,  North  Dakota,  and  Oklahoma  the  law  provides 
that  the  due  incorporation  of  any  company  claiming  in  good  faith 
to  be  a  corporation  and  doing  business  as  such,  its  right  to  exer- 

1  See  Part  III.  Table  3,  page  573  ;  see  M.  W.  R.  Co.  v.  SuperriBors,  64  Cal.  69 ; 
also  Boyce  v.  Church,  46  Md.  359 ;  W.  &    28  Pac.  496. 

22 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  6 

cise  corporate  powers  shall  not  be  inquired  into  collaterally.  In 
Tennessee  the  law  provides  that  the  validity  of  corporate  existence 
shall  not  be  collaterally  questioned.  Persons  acting  as  a  corpora- 
tion, the  law  says,  will  be  presumed  to  be  legally  incorporated  un- 
til the  contrary  is  shown,  and  no  such  franchise  shall  be  declared 
annulled  or  forfeited  except  in  a  regular  proceeding  brought  for 
that  purpose.  In  Texas  no  person  who  shall  have  assumed  an 
obligation  to  an  ostensible  corporation  as  such  shall  resist  the 
enforcement  of  such  obligation  on  the  ground  that  there  was  no 
such  corporation  until  that  fact  has  been  adjudged  in  a  direct 
proceeding  for  that  purpose. 

In  Arizona  persons  acting  as  a  corporation  under  the  provisions 
of  the  incorporation  act  in  force  in  that  Territory  are  by  law  pre- 
sumed to  hh  legally  organized  until  the  contrary  is  shown,  and  no 
franchise  can  be  declared  to  be  annulled  or  forfeited  except  in  reg- 
ular proceedings  brought  for  that  purpose.  The  law  also  provides 
that  no  persons  acting  as  a  corporation  under  such  act  shall  be  per- 
mitted to  set  up  or  rely  upon  the  want  of  legal  organization  as  a 
defence  to  any  action  brought  against  them  as  a  corporation,  nor 
shall  any  person  who  shall  be  sued  under  a  contract  made  with 
such  corporation  sue  for  an  injury  done  to  its  property  or  for  a 
wrong  done  to  its  interest  be  permitted  to  rely  upon  such  want  of 
legal  organization  in  his  defence. 

Finally,  in  Mississippi  it  is  provided  that  it  shall  not  be  a  defence 
in  any  action  against  a  corporation  that  there  was  a  defect  or  in- 
formality in  its  organization. 

Again  in  twenty-nine  of  the  States  authority  is  given  to  State 
officials  to  issue  certificates  of  due  incorporation.'  Of  this  number 
fourteen  are  not  included  in  the  list  of  States  forbidding  collateral 
attacks  upon  corporate  existence.  In  such  States  it  is  safe  to  say 
that  the  issue  of  such  a  certificate  is  in  itself  a  final  adjudication 
against  all  parties  except  the  State  that  a  corporation  has  a  legal 
existence  to  the  extent  that  it  cannot  bo  colhiterally  attacked  by 
third  parties.  Particularly  where  it  is  organized  by  the  voliintiny 
action  of  the  requisite  numl)cr  of  incorporators  with  (he  aj)pr()val 
and  consent  of  an  officer  of  the  State  j)ossessing  authority  in  the 
premises,  under  an  enabling  statute  permitting  corporations  of 
that  particular  dcscrijjtion  to  be  organized  thereunder.^ 

1  See  Part  III.  Table  3,  page  573.  ^  O'Brien   v.  Cumminps,   13  Mo.  Ap. 

197  ;  Hoyce  v.  Church,  4G  Md.  359. 

23 


§   6     INCOUrOIiATION    AND    ORGANIZATION    OF    CORPORATIONS.      [PART  I. 

Tlio  theory  upon  which  the  rule  here  stated  is  based  sceins  to  bo 
that  State  oHicials  in  issuing  a  ccrtiiicate  oi"  due  incorporation  act 
under  a  general  statute  passed  by  the  legislature,  and  under  the 
terms  thereof  become  agents  as  it  were  thereof  for  that  purpose. 
It  therefore  follows  that  the  act  of  such  State  officials  in  certify- 
ing as  to  due  incorporation,  is  in  effect  the  act  of  the  legislature 
which  has  the  supreme  power  of  creating  corporations.  So  it 
may  be  safely  said  that,  according  to  the  best  current  of  authority, 
where  the  statute  gives  the  State  official  authority  to  issue  a  cer- 
tificate of  due  incorporation,  such  certificate  is  evidence  thereof 
against  all  the  world  except  the  State.^ 

Again  it  should  be  noted  that  in  many  of  the  States  the  statute 
itself  gives  certain  probative  force  to  the  charter  so  issued,  by  provid- 
ing that  the  certificate  of  incorporation,  or  a  certified  copy  thereof, 
shall  be  evidence  to  a  certain  designated  extent  and  for  certain 
purposes.  Thus  in  Connecticut,  Kansas,  Minnesota,  North  Dakota, 
and  Ohio  statutes  exist  providing  that  a  certified  copy  of  the  cer- 
tificate of  incorporation  shall  be  prima  facie  evidence  of  the  legal 
existence  of  the  corporation.  In  Colorado,  Oklahoma,  Oregon, 
Texas^  West  Virginia,  and  Wyoming  statutes  provide  that  such  cer- 
tificate shall  be  evidence  of  the  existence  of  the  company.  In  Cal- 
ifornia, Colorado,  Idaho,  Illinois,  Louisiana,  Montana,  Nevada, 
North  Dakota,  South  Dakota,  Oklahoma,  Utah,  Washington,  and 
Wyoming  such  a  certificate  is  prima  facie  evidence  of  the  facts 
therein  stated.  In  New  York  the  certificate  of  incorporation  of  any 
corporation  when  duly  filed  is  presumptive  evidence  of  its  incor- 
poration. In  Arkansas  a  certified  copy  of  the  articles  is  made 
prima  facie  evidence  of  the  due  formation  and  of  the  existence 
and  capacity  of  the  corporation.     In  Colorado  it  is  made  evidence 

1  Petty  V.  Hayden,  115  Iowa,  212;  88  Jones  v.  Dana,  24  Barb.  395;  Taylor  v. 

N.  W.  339  ;  Cochran  v.  Arnold,  58  Pa.  St.  Company,  91  Me.  1 93 ;  39  Atl.  560  ;  Finch 

399;  Litchfield  Bank  i?.  Church,  29  Conn.  v.    Ullman,    105   Mo.   255;    Saunders   v. 

137;   Napier   v.  Poe,   12  Ga.   170;   Caro-  Farmer,  G2  N.  H.  572  ;  Union  Water  Co.  v. 

lina  Iron  Co.  v.  Abernathey,  94  N.  C.  545;  Kean,  52  N.  J.  Eq.  Ill ;   27  Atl.    1015; 

Casey  v.  Galli,  94  U.  S.  673;  24  L.  E.  168,  U.  S.  Vinegar  Co.  v.  Schlefrel,  143  N.  Y. 

307 ;  Lake  Sup.  Nav.  Co.  v.  MorrLson,  22  537  ;   38  N.    E.    729 ;    W.    &  P.  Ry.   Co. 

U.  C.  C.  P.  217;    Birds    Case,  1    Simon  v.   Company,   114   N.    C.  690;    19    S.  E. 

(n.  8.),  47;  40  Enf,'.  Ch.  47  ;  In  re  Barneds  646;  Carroll    v.  Bank,  19   Wash.  639;  54 

Bakery  Co.,  L.  R.  2  Ch.  674 ;  O'Brien  v.  Pac.  32 ;  Vermont,  etc.  Ry.  Co.  v.  Com- 

Cummini^.s,  13  Mo.  Ap.  197;  N.  P.  C.I.  pany,  34  Vt.  2;  Grubb  v.  Company,   14 

Co.  V.   Company,   16  Utah,  246;  52  Pac.  Pa.  St.  305;  W.  P.  R.   Co.   v.  Young,  12 

168;    Holman   v.   State,    105  Ind.   569;    5  Md.  476. 
N.  E.  702;  State  t;.  Carr,  5  N,    H.  367; 

24 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  6 

of  the  existence  of  the  corporation.  In  Connecticut  it  is  evidence 
of  the  legal  existence  of  the  corporation,  and  it  is  there  provided 
that  it  shall  serve  all  the  purposes  of  a  charter  for  the  corporation. 
In  Delaware  it  is  made  evidence  in  any  court  of  law  or  equity. 
In  Georgia  a  certified  copy  of  the  petition  for  incorporation  and 
order  granting  the  same  is  made  evidence  of  such  incorporation 
in  any  court.  In  Kentucky  the  law  provides  that  it  may  be  used 
as  evidence  in  any  action  for  or  against  the  corporation.  In 
Maryland  it  may  be  used  as  evidence  in  all  legal  proceedings.  In 
Michigan  it  is  prima  facie  evidence  of  the  due  formation,  exist- 
ence, and  capacity  of  such  corporation.  In  Minnesota  it  is  pro- 
vided that  it  shall  be  evidence  in  all  courts  of  such  incorporation. 
In  New  Jersey  it  is  evidence  in  all  courts  and  places.  In  North 
Carolina  it  is  prima  facie  evidence  of  the  organization  and  incor- 
poration of  the  company  purporting  thereby  to  have  been  estab- 
lished. In  Pennsylvania  it  is  evidence  for  all  purposes.  In  Rhode 
Island  a  certificate  must  be  received  in  evidence  before  any  court, 
tribunal,  or  authority.  In  Tennessee  it  is  competent  evidence  in 
any  proceeding.  In  West  Virginia  it  sliall  be  received  as  evidence 
of  the  existence  of  the  corporation.  In  Wyoming  it  is  provided 
that  it  shall  be  evidence  of  the  existence  of  the  company. 

Again,  in  Massachusetts  and  Indiana  the  law  provides  tliat  the 
certificate  of  record  shall  be  conclusive  evidence  of  tlie  existence  of 
such  corporation.  In  Wisconsin  it  must  be  received  as  conclusive 
evidence  of  the  existence  of  the  corporation  or  of  the  organization 
thereof  in  all  cases  where  such  facts  are  collaterally  involved. 

Again,  in  Alabama  the  certificate  of  the  probate  judge  states 
specifically  that  the  incorporators  are  duly  organized  as  a  corpora- 
tion for  the  purposes  expressed  in  the  declaration,  having  the 
power,  capacity,  and  authority  conferred  by  law.  In  Floi-ida  the 
law  provides  that  "  letters  patent "  shall  be  conclusive  evidence  of 
the  existence  of  the  corporation  in  all  actions  where  the  question 
of  the  existence  is  only  collaterally  involved,  and  prima  facie  evi- 
dence in  all  other  acti(jns  and  jiroceedings.  In  Indiana  the  order 
of  the  court  declaring  the  existence  of  a  corporation  entered  "  ex 
parte  "  is  conclusive  as  to  the  fact  of  such  existence.  In  Missis- 
sippi the  law  provides  that  the  ])0wer3  specified  in  the  charter 
shall  by  tlie  approval  of  the  Gcncrnor  be  vested  in  such  corpora- 
tion, and  it  shall  go  into  operation  at  the  time  and  on  the  terms 
and  conditions  specified. 

25 


§  0    iNconrouATioN  and  organization  of  coupokations.   [part  I. 

Airaiii,  oortaiu  statutes  exist  providinji;  tluit  after  ctu-taiu  pre- 
liminary ste[)S  have  been  taken  as  prescribed  by  statute  such 
incorporators  and  their  successors  and  assigns  shall  thereupon 
become  a  body  j)olitic  and  corporate  for  certain  specified  purposes. 
These  statutes  really  provide  that  upon  the  observance  of  certain 
specified  preliminary  conditions  relative  to  the  making  and  execu- 
tion of  articles  of  incorporation,  the  incorporators,  their  suc- 
cessors and  assigns,  shall  be  a  body  politic  and  corporate  under  the 
name  and  for  the  purposes  stated  in  the  articles.  The  foregoing  is 
the  statutory  provision  as  it  exists  to-day  in  substance  in  South  Da- 
kota, North  Dakota,  and  Oklahoma.  In  Virginia  the  law  provides 
that  they  shall  be  a  body  politic  and  corporate  by  the  name  set 
forth  in  the  said  certificate  and  upon  the  terras  and  powers  set  forth 
therein,  so  far  as  not  in  conflict  with  law.  In  Pennsylvania  the 
law  provides  that  they  shall  become  a  corporation  uj)on  the  pur- 
poses and  terms  named  in  the  charter.  In  Maryland  they  are 
declared  to  thereby  become  a  body  politic  and  corporate  according 
to  tlie  objects,  purposes,  articles,  conditions,  and  provisions  in  said 
instrument  contained.  In  Maine  they  are  declared  to  be  a  corpo- 
ration, with  all  the  rights  and  powers  and  subject  to  all  the  duties, 
obligations,  and  liabilities  provided  by  law. 

In  Connecticut  a  copy  of  the  certificate  of  organization  is  prima 
facie  evidence  that  the  corporation  has  been  duly  organized  and 
is  duly  authorized  to  exercise  all  its  corporate  powers.  In  Maine 
the  certificate  of  the  Secretary  of  State  that  the  corporation  has 
been  duly  organized  is  evidence  of  the  corporate  existence  of  the 
corporation.  In  South  Carolina  a  certificate  is  issued  by  the  Sec- 
retary of  State  that  the  corporation  is  fully  authorized  to  com- 
mence business  under  its  charter  for  the  purposes  indicated  in 
the  written  declaration  of  the  incorporators. 

It  is  not  claimed  that  the  statutory  provisions  here  referred  to 
operate  so  as  to  preclude  entirely  collateral  attack  upon  corpo- 
rate existence,  purposes,  and  powers.  The  most  that  is  claimed 
for  them  where  they  do  not  make  certain  instruments  conclusive 
evidence  of  corporate  existence,  purposes,  and  powers,  is  that  they 
shift  the  burden  of  proof  and  render  the  likelihood  of  collateral 
attack  more  remote.^ 

^  As  to  meaning  of  conclusive  evidence,  of  prima  facie  evidence,  see  ITolmes  v.  Gil- 
see  American  Order,  etc.  v.  Merritt,  151  liland,  41  Barb.  (N.  Y.)  .'iGO ;  Knapp,  etc. 
Mass.  .558;  24  N.  E.  918.     As  to  meaning     Co.  v.  Strand, 4  Wash.  686;  30  Pac.  1063; 

2G 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  6 

It  has  now  been  fairly  demonstrated,  it  is  hoped,  that  in  the 
majority  of  the  Commonwealths  collateral  inquiry  into  corporate 
existence  is  either  prohibited  by  statute  or  else  is  forbidden  by 
implication,  by  reason  of  the  issuance  of  certificates  of  due  in- 
corporation, under  proper  legislative  authority,  by  State  officials. 
In  the  few  remaining  States  and  Territories  the  courts  have  either 
by  a  process  of  judicial  legislation  or  by  an  extended  application 
of  the  principle  of  estoppel,  practically  made  it  impossible  to 
successfully  attack  in  collateral  proceedings  the  due  existence 
of  a  corporation.     This  on  grounds  of  enlightened  public  policy.^ 

The  judicial  legislation  above  referred  to  covers  the  cases  where 
it  is  impossible  to  apply  principles  of  estoppel  either  on  account 
of  the  absence  of  any  conduct  on  the  part  of  parties  litigant  show- 
ing their  recognition  of  the  corporation's  existence,  or  else  is 
inapplicable  by  reason  of  such  parties  having  never  in  any  way 
dealt  with  the  corporation  or  recognized  its  corporate  existence.^ 

Having  now  considered  at  some  length  the  question  as  to  the 
right  to  collaterally  attack  the  validity  of  corporate  existence, 
there  naturally  follows  an  inquiry  as  to  the  right  to  attack  the 
validity  of  corporate  purposes  and  powers  when  the  same  are  in- 
serted in  the  articles  of  incorporation.  It  would  seem  to  follow, 
as  a  logical  sequence,  that  if  the  rule  be  once  established  forbid- 
ding collateral  attack  upon  corporate  existence,  this  same  rule 
should  operate  as  well  to  prevent  collateral  attack  upon  corporate 
purposes  and  powers.  This  for  the  reason  that  if  a  corporation 
exists  at  all  it  must  necessarily  exist  with  such  purposes  and 
powers  as  arc  inserted  in  the  articles  of  incorporation  which 
called  the  corporation  into  being. 

As  has  already  been  observed,  a  large  number  of  the  States  have 
enacted  statutes  forbidding  collateral  attack  upon  corporate  exist- 
ence. For  the  reasons  already  stated,  it  would  apjjcar  that  these 
statutes  would  l>e  equally  efficacious  for  the  purpose  of  prohibiting 
collateral  attack  upon  corporate  purposes  and  powers. 

Eastern  Plank  Road  Co.  v.  Vanpjhan,  14  863;   Saunders  v.  Farmer,  62  N.  II.  572; 

N.  Y.  546  ;  Bates  v.  Wilson,  14  Col.  140;  Hackensack  Water  Co.  v.  DcKay,  36  N.  J. 

24  Pac.  99;  Woo.l  v.  Company,  56  Conn.  Eq.  548;  U.   S.  Vincf^ar  Co.  v.  Schlcgel, 

87;  13  Atl.  137;  Jewell  v.  Company,  101  143   N.  Y.  537;  38  N,  E.  729;  W.  &  P. 

111.  57.  liy.  Co.  i;.  Com])any,   114  N.  C.  690;  19 

1  See  Casey  v.  Galli,  94  U.  S.  673  ;  Dug-  S.  E.  646  ;  Reynold.^  r.  Myers,  51  Vt.  444  ; 

gan    y.  Company,    II   Col.   113;  17  Pac.  Carroll  i-  Bnnk,  19  Wash.'639;  .54  Pac.  32. 

105  ;  McClinch   v.  Sturgis,  72   Me.  288;  *  See  Marion  Savings  Bank  v.  Dunkin, 

Finch  V.  Ullman,  105   Mo.  255;  16  S.  W.  54  Ala.  471. 

27 


ij  7     INTOnrORATION    AND    ORGANIZATION    OF    CORPORATIONS.     [PART  I. 

Aszain,  as  has  already  been  staled,  a  larj^e  number  of  tlic  in- 
corporation  acts  provide  that  the  certificate  of  incorporation  shall 
be  issued  by  certain  designated  State  officials.  Where  such  cer- 
tificates are  issued  under  express  or  even  implied  authority  of  the 
State,  the  rule  unquestionably  is  that  the  validity  of  corporate 
purposes  and  powers  not  per  se  illegal,  inserted  in  the  articles  of 
incorporation,  cannot  be  attacked  except  by  the  State  in  a  direct 
proceeding  brought  for  that  purpose. ^ 

If,  however,  the  charter  is  issued  without  the  express  or  im- 
plied approval  of  the  State  officials, — their  duty  being  merely  to 
certify  to  the  fact  and  to  mark  them  when  filed  as  public  documents 
in  their  respective  offices,  —  then  the  insertion  of  purposes  not 
authorized  by  the  statute,  yet  not  unlawful  per  se,  would  probably 
not  render  the  charter  valid  for  all  purposes  even  when  flled.^ 

To  sum  up  briefly  the  propositions  herein  presented,  it  may  be 
said  that  collateral  inquiry  into  the  legality  of  a  corporation's  ex- 
istence, purposes,  and  powers  is  forbidden  in  this  country,  (1)  by 
statutes  expressly  forbidding  such  collateral  attack  ;  (2)  by 
reason  of  authority  vested  in  state  officials  to  issue  certificates  of 
due  incorporation  which  for  the  reasons  already  stated  are  not 
open  to  collateral  attack ;  (3)  by  reason  of  statutory  provi- 
sions giving  to  certified  copies  of  articles  of  incorporation  certain 
probative  effect;  (4)  by  an  extended  application  of  the  principle 
of  estoppel  forbidding  such  collateral  attacks ;  (5)  by  a  process 
of  judicial  legislation  denying  on  grounds  of  public  policy  the  right 
of  parties  other  than  the  State  to  attack  the  legality  of  corporate 
existence,  purposes,  and  powers. 

§  7.  Effect  of  Inserting  Illegal  Purposes.  —  There  seems  to  be  a 
sound  basis  in  law  for  permitting  collateral  attack  upon  purposes 
that  are  illegal  per  se.  This  for  the  reason  that  a  distinction 
clearly  exists  between  purposes  which  are  merely  unauthorized 

1  State  ex  rel.  Walker  v.  Talbot,  123  Mo.  399  ;  Casey  v.  Galli,  94  U.  S.  673 ;  Fortier 

69;  27  S.  W.  366;  Doty  v.  Patterson,  155  v.   Bank,   112   U.  S.  439;  5  S.   Ct.  234; 

Ind.  60;  56  N.  E.  668;  T.  A.  L.   Co.  v.  Niemeyer  v.  L.   U.  J.  Ry.,  43  Ark.  111. 
Massey  (Tenn.),  56  S.  W.  35;  Allbright        '^  Williams    v.   Company,  25  Ind.    Ap. 

V.  Association,  102  Pa.  St.  411.     See  also  351;  57  N.  E.  581  ;    Kinaton,  etc.   Co.  r. 

Peoples.  Beach,  19  Hun,  2.59;  N.Orleans,  Stroud,  132  N.  C.  413  ;  43S.  E.  913;  Ram- 

etc.  R.  R.  Co.  V.  Frank,  39   La.  An.  707  ;  aey  v.  Tod,  95  Tex.  614  ;  69  S.  W.  133  ;  Or. 

2  So.  310;  Holmes  v.  Gilliland,  41  Barb.  Ry.  &  Nav.  Co.  v.  Or.  Ry.  Co.,  130  U.  S. 

N.  Y.  569;   Eastern  Plank  Road    Co.  v.  1 1'o  S.  Ct.  409;  State  w.  Company,  88  Wis. 

Vaughan,  14  N.  Y.  .546;   C.  &  P.  Co.  v.  512;   60  N.  W.  796;  G.  L.  H.  Ins.  Co,  v. 

Secretary   of  State,   128    Mich.    621;  87  Kamper,  73  Ala.  325. 
N.  W,  901  ;  Cochran  v.  Arnold,  58  Pa.  St. 
28 


CHAP.  I,]  DRAFTING   THE   CHARTER.  §  8 

by  the  terms  of  the  general  incorporation  act,  and  those  purposes 
which  are  forbidden  by  express  statute, —  civil  or  penal.  In  the 
latter  case  it  seems  clear  that  even  the  approval  by  a  State  official 
of  such  unlawful  purposes  as  evidenced  by  the  issuance  by  them 
of  certificates  of  due  incorporation,  do  not  forbid  collateral  attack 
thereon  in  any  suit  whereby  the  corporation  seeks  to  benefit  by 
the  insertion  of  such  unlawful  purposes  in  its  articles.^ 

The  rule  might  be  still  further  extended  so  as  to  apply  to  pur- 
poses which  may  be  lawful  in  a  general  way,  yet  which  may  be 
deemed  unlawful  on  account  of  the  limitations  inserted  in  the 
articles  upon  the  means  by  which  such  purposes  are  to  be  carried 
out.^  The  same  principle  would  apply  where  the  purposes  are 
clearly  contrary  to  the  public  policy  of  the  State.^  But  if  pur- 
poses are  lawful  on  their  face,  they  will,  as  against  all  but  the 
State,  be  presumed  to  be  such.*  Where  some  of  the  purposes  are 
merely  unauthorized,  while  others  are  valid  and  proper,  the 
insertion  of  the  unauthorized  purposes  will  not  vitiate  the  incorpo- 
ration.^ But  where  any  of  the  purposes  are  illegal  j^er  se,  the  State 
officials  would  be  clearly  justified  in  refusing  to  allow  the  articles 
to  be  filed,  though  some  of  them  are  lawful.^ 

§  8.  Corporate  Powers,  Classification  of.  —  By  "  corporate 
powers  "  is  meant  the  right  or  authority  of  a  corporation  to  act 
along  certain  lines  prescribed  for  it  in  the  instrument  whereby  it 
was  created.  The  tendency  of  modern  decisions  is  to  assimilate 
the  powers  of  private  corporations  to  those  of  individuals  and 
copartnerships."  It  is  unnecessary  to  say  that  a  corporation  can- 
not assume  for  itself  powers  of  action,  irrespective  of  statute,  by 
the  mere  declaration  thereof  in  its  articles  of  incorporation.^ 
Neither  can  they  be  created  by  by-law.^ 

The  Supreme  Court  of  the  United  States  i°  has  observed  that 

1  F.  N.  Bank  v.  Company,  59  Ohio  St.  *  U.  S.   Vinccjar  Co.  v.  Foehrenbach, 

316;    52    N.  E.   834;     In  re     DuQue.sno  148  N.  Y.  58 ;  42  N.  E.  403. 

College,  2   Pa.   Dist.  Ct.  Uep.  555;  Mat-  ^  gkick  v.  Company,  15  Iml.  Aj).  310; 

ter  of  Agudath  Ilakehiloth,  18  N.  Y.  Mis.  44  N.  E.  48. 

Kep.  717;    42   N.    Y.   Sup.  985;    State  v.  "  State   v.  Company,  88   Wis.  512;   GO 

Company,  29  Neb.  700;  4G  N.  W.  155.  N.  W.  796. 

■^  Or.  lly.  &  Nav.  Co.  v.  Or.   Ily.   Co.,  "  Fink  v.  Conipnny,  5  Dro.  301. 

130  U.  S.  1  ;   9  S.  Ct.  409.  ^  People   v.   Green,  1  Hi  Midi.  505;    74 

8  Scbeulzeu  Bund  u.  Agitations  Verein,  N.  W.  714. 

44  Mieh.   313;  6  N.  W.  675;    McGrow  v.  9  AndrewH  v.  Company,  37  Mo.  256. 

C.  P.  Ex.,  85  Tenn.  572  ;  4  S.  W.  3s ;  In  i'  Thomas  v.  Company,  101  U.  S.  71. 
re  Benefit  Society,  10  Phil.   19;   People  v. 
Company,  130  111.  268;  22  N.  E.  798. 

29 


§  0     TXCOUrORATION    AND    ORGANIZATION   OF   CORPORATIONS.     [PART  I. 

'*  we  take  the  general  doctrine  to  be  that  the  powers  of  corpora- 
tions organized  under  general  statutes  arc  such  and  such  only  as 
are  conferred  by  statute.  Conceding  the  rule  applicable  to  all 
statutes,  that  what  is  fairly  implied  is  as  much  granted  as  what 
is  expressed,  it  remains  that  the  charter  of  the  corporation  is 
the  measure  of  its  powers,  and  that  the  enumeration  of  these 
powers  implies  the  exclusion  of  all  others." 

The  foregoing  is  true  only  as  to  certain  classes  of  powers  which 
are  hereinafter  referred  to  as  "  express  powers."  The  rule  is  not 
applicable  either  to  what  are  known  as  "  common  law  papers"  or 
to  the  "  incidental  powers  "  of  corporations.  Corj)orate  powers 
may  properly  be  divided  into  three  general  classes,  to  wit : 
(1)  Common  Law  Powers;  (2)  Express  Powers;  (3)  Incidental 
Powers.  Generally  speaking,  there  is  no  existing  rule  or  prin- 
ciple by  which  corporations  created  for  a  certain  specific  object 
or  to  carry  on  a  particular  trade  or  business  are  to  be  held  to  be 
prohibited  from  all  other  dealings  or  transactions  not  coming 
within  the  exact  scope  of  those  designated.  Undoubtedly  the  main 
business  of  a  corporation  is  to  be  confined  to  that  class  of  opera- 
tions which  properly  appertains  to  the  general  purposes  for  which 
this  charter  was  granted.  But  it  may  also  enter  into  contracts 
and  engage  in  transactions  which  are  incidental  or  auxiliary  to  the 
main  business,  or  which  may  become  necessary  or  profitable  in 
the  care  and  management  of  the  property  which  it  is  authorized 
to  hold.  The  same  is  true  as  to  certain  powers  which  are  held 
to  exist  at  common  law  even  in  the  absence  of  any  specific  refer- 
ence to  such  powers  in  the  articles  of  incorporation. 

§  9.  Common  Law  Pow^ers,  Definition  of ;  Enumeration  of.  — 
Common  law  powers  are  those  which  the  law  bestows  upon  cor- 
porations irrespective  of  statute  or  charter  provisions,  as  being 
necessary  for  the  carrying  out  of  the  purposes  for  which  it  was 
created.^  The  common  law  gives  to  corporations  the  powers 
belonging  to  corporations  of  their  class,  unless  there  is  some- 
thing in  the  nature  of  the  corporation  or  in  the  terms  of  its 
charter,  or  in  the  act  under  which  it  was  incorporated  inconsis- 
tent witli  tlie  exercise  of  the  powers,  or  there  is  some  general 
statute  restricting  the  same.^ 

1  Falconer  u.  Campbell,  8  Fed.  Cases,  593;  Knowles».Beatty,l  McLean, 41 ;  Leg- 

4620;  2  McLean,  195  ;    C.  O.  N.  G.  &  F.  gett  v.  N.  J.  M.,  etc.  Co.,  1  N.  J.  Eq.  54L 

Co.  «.  C.  D.  Co.,60Ohio,  96  ;  53N.  E.  711 ;  2  j^mjth   v.   Company,   27    N.    H.    86; 

State  V.  Company,  144  Mo.  562  ;  46  S.  W.  Sutton's  Hospital  Cases,  5  Coke's  Hep.  253. 

30 


CHAP.  I.J  DRAFTING   THE    CHARTER.  §  11 

The  common  law  powers  here  referred  to  may  be  enumerated 
as  follows :  (1)  the  right  to  the  use  of  a  corporate  name ; 
(2)  the  right  to  perpetual  succession ;  (3)  the  right  to  acquire, 
hold,  and  dispose  of  corporate  property  ;  (4)  the  right  to  appoint 
corporate  officers  and  agents ;  (5)  the  right  to  establish  by-laws 
for  the  government  of  the  corporation,  its  officers  and  members ; 
(6)  the  right  to  sue  and  be  sued. 

An  examination  of  the  various  corporate  acts  in  force  in  the 
several  States  and  Territories  will  serve  to  show  that  without 
exception  they  contain  an  enumeration  more  or  less  full  of  the 
common  law  powers  above  referred  to.  In  Indiana  the  statute 
refers  to  them  as  common  law  powers,  and  proceeds  to  enumerate 
them.i 

§  10.  Right  to  a  Corporate  Name.  —  The  right  to  the  use  of  a 
corporate  name  is  a  power  well  recognized  both  at  common  law 
and  by  statute.  Corporations  have  a  property  right  to  the  use  of 
such  name  in  the  transaction  of  their  business  which  the  courts 
will  always  protect.^  They  are  recognized  in  law  only  by  their 
corporate  name.^ 

The  name  is  said  "  to  Ije  the  very  being  of  their  constitution  ; 
the  knot  of  their  combination  ;  without  which  they  could  not  do 
their  corporate  acts  ;  for  it  is  unable  to  implead  and  be  impleaded, 
to  take  any  action  until  it  hath  gotten  a  name."  * 

Tiie  action  of  State  officials  in  granting  the  use  of  a  name,  it 
may  be  observed,  is  not  conclusive,  for  courts  of  equity  will  never- 
theless protect  corporations  in  the  use  of  their  name.^  State 
officials  have,  however,  the  power  to  protect  the  use  of  corpo- 
rate names  when  applications  are  made  for  charters,  even  when 
the  proposed  name  is  not  exactly  similar  to  that  of  existing 
corporations.^ 

The  right  to  have  a  corporate  name  is  in  itself  a  common  law 
power  ;  but  it  is  one  whicli  is  not  alienable." 

§  1  1.  Right  of  Perpetual  Succession.  —  The  "  right  of  perpetual 
succession "  under  a  designated  corporate  name  is  one  of  the 
common  law  powers  of  a  corporation.      The   words  "  perpetual 

1  Iiid.  Session  Laws,  1901,  cli.  127,  §  28.  "  State  ex  rel.  v.  McGrath,  92  Mo.  355  ; 

2  L.  I).  Co.  V.   Ma.ssachu.setts,  10  Wall.     5  S.  W.  29. 

(U.  S.)  566;  see  also  an/c,  §  3.  ''  State  v.   Comitany,  40  Kan.   ;»6  ;    19 

8  Curtiss  V.  Murry,  26  Cal.  MS.  I'ac.  .'?4;t  ;  Detroit  Citizons'  Street  Ky.  Co. 

*  Smith  i;.  Company,  30  Ala.  650.  v.    Common  Council,   125   Mich.   673;   85 

6  Grand    Lodfje,  etc.    v.   Graham,  96     N.  W.  96. 

la.  592;  65  N.  W.  837. 

31 


§  lo    INCOKrOUATION    AND    ORC ANIZaTION    OF    CORPORATIONS.    [PART  I. 

succession  "  do  not  refer  to  the  duration  of  the  life  of  the  corpora- 
tion, where  tliis  is  specilically  limited  eitlier  by  statute  or  by  the 
articles  of  incorporation,  but  merely  operates  to  grant  the  continu- 
ation of  cori)orate  life  during  the  period  so  i)rescribed,^  Perpetual 
succession  ordinarily  merely  conveys  the  right  of  continued  un- 
broken succession  for  the  period  of  time  limited  for  the  corporate 
existence.^ 

§  12.  Right  to  adopt  and  use  a  Corporate  Seal.  —  It  is  an  in- 
separable incident  to  every  corporation  that  it  may  have  a  conunon 
seal,  and  make,  alter,  and  renew  the  same  at  pleasure.^  The  doc- 
trine of  the  common  law  requiring  the  use  of  a  corporate  seal  in 
the  execution  of  corporate  contracts  is  practically  obsolete,  and 
the  seal  is  now  required,  in  the  absence  of  express  statute,  only 
when  it  would  be  required  of  a  natural  person  under  similar 
circumstances.'*  Ordinarily  the  exercise  of  this  power  is  dele- 
gated by  the  stockholders  to  the  directors  by  means  of  an 
appropriate  by-law.^ 

§  13.  Power  to  acquire,  hold,  and  dispose  of  Real  and  Personal 
Property.  —  No  doctrine  of  the  common  law  is  more  clearly  and 
undeniably  established  than  that  which  concedes  to  corporations 
an  inherent  right  to  acquire  and  hold  title  to  real  and  personal 
property,  except  so  far  only  as  they  may  be  restricted  by  the 
objects  of  their  creation  or  the  limitations  of  their  charter.*^  The 
power  to  acquire  such  property,  when  not  restricted  by  statute,  is 
only  limited  by  the  rule  that  it  must  be  such  as  is  reasonably 
necessary  or  convenient  to  enable  it  to  accomplish  the  purposes 
for  which  it  was  created.'' 

Formerly  the  amount  of  real  property  which  a  corporation 
might  purchase  and  hold  was  very  generally  limited  by  statute  in 
most  of  the  Commonwealths.  The  existence  of  such  statutes  may 
be  traced  to  the  policy  of  the  common  law  and  to  the  existence  in 
England  of  statutes  known  as  statutes  of  mortmain,  which  pro- 
hibited corporations  from  taking  and  holding  real  estate  without 
licenses  from  the  king  or  Parliament.^     However,  in  most  of  the 

1  State  V.  Payne,  129  Mo.  468 ;  31  S.  W.  "  Green  Co.  v.  Bloilgett,  S.O  111.  Ap.  556. 
797.  5  Woodman  v.  Company,  50  Me.  549. 

2  Scanlon  v.  Crawshaw,  5  Mo.  Ap.  ®  Lathrop  v.  Bank,  8  Dana  (Ky.),  114; 
337  ;  see,  however,  Fairchild  v.  Association,  Thompson  v.  Waters,  25  Mich.  214. 

71  Mo.  526.  7  Brown  v.  Hogg,  14  111.  219  ;  Kichard- 

'  Ransom  v.  Bank,   13  N.  J.  Eq.  212  ;     son  v.  Association,  131  Mass.  174. 
Thomas  v.  Dakin,  22  Wend.  9.  «  Leazure  v.  Hillegas,  7  Ser.  &  U.  (Pa.) 

32 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  15 

States  such  restrictions  have  been  done  away  with,  and  corpora- 
tions may  now  hold  such  property,  both  real  and  personal,  as  the 
attainment  of  their  corporate  purposes  may  require.  In  any 
event,  the  general  power  of  a  corporation  to  hold  real  estate  is 
primarily  a  question  betwen  the  corporation  and  the  State,  and 
cannot  ordinarily  be  raised  by  third  parties.^  Where  such  statutes 
exist  the  corporation  has  of  course  no  power  to  exceed  the  statu- 
tory limit  as  against  the  State.^ 

The  general  riile  is  that  corporations,  unless  forbidden  by  stat- 
ute, have  implied  power  to  take  property  by  devise.^  The  same 
rule  applies  with  respect  to  the  power  of  taking  and  holding 
property  in  trust,  provided  in  so  doing  it  acts  within  its  corporate 
powers.*  The  power  of  a  corporation  to  sell  and  convey  is  as 
broad  as  the  power  to  purchase  and  hold,  and  is  granted  on  the 
same  terms.-^ 

I  14.  Power  to  appoint  Corporate  Officers  and  Agents. — At 
common  law  corporations  have  the  inherent  power,  irrespective 
of  statute  or  charter  provision,  to  elect  directors  and  executive 
oOicers  and  to  appoint  such  agents  as  the  business  of  the  corpora- 
tion require.** 

§  15.  Power  to  establish  By-laws.  —  Every  corporation  has  the 
implied  power  to  enact  such  by-laws  as  may  be  necessary  for  the 
proper  government  of  the  corporation,  its  officers,  and  stock- 
holders.^ 

Sometimes  the  statutes  i)rescribe  the  nature  of  the  by-laws  to  be 
adopted  and  authorize  penalties  for  violation  thereof.^ 

.313;    White  v.  Howard,  38  Conn.  342;  «  Vidal  y.  Girards  Executors.  2  How. 

Page  (,'.  IIeinel)erg,  40  Vt.   81  ;    Rivanna  (U.  S.)  127;  Morris  ?>.  Mav,  16  Ohio,  469; 

Nav.  Co.  V.   Dawsons,  3   Grat.  (Va.)  19;  F.  L.  T.    Co.  v.  II.    F.  N."  Co.,  41   N.   Y. 

Moore  y.  Moore,  4  Dana  (Ky.),  354;    Mai-  619;  Wliito  v.  Rice,   112  Mich.  403;  70 

lett  V.  Simp.Hon,  94  N.  C.  37;  Trustees  v.  N.  W.  1024;  Greene  v.   Dennis,  6  Conn. 

Manninic:,  72  Md.  116  ;   19  Atl.  .'599;  Fir.st  304. 

M.  E.   Churchy.  Dixou,    178  111.  260;  52  6  Miners'  Ditch  Co.  v.  Zclierhach,  37 

N.  E.  887.  Cal.  .543;   People  v.  Collcgn,  38  Cal.  166. 

1  C.  n.  &  Q.  R.  11.  Co.  I'.  Lewis,  .')3  o  Kearney  v.  Andrews,  10  N.  .J.  E(i.  70 ; 
la.   101  ;  4  N.  W.  842.  A.  R.  R.  Co.  v.  Kidd,  29  Ala.  221. 

2  Market  St.  l{y.  Co.  v.  Ildlnian,  109  "  Wells  r.  IJlack,  117  Cal.  157;  48  Fac. 
Cal.  571  ;  42  Tac.  225;  Tn  re  Mc(iraw's  1090;  IVopIo  v.  Society,  24  Barl).  N.  Y. 
Estate,  HI  N.  Y.  66;  Andrews  v.  An-  570;  Martin  v.  Association,  2  Coldw. 
(Irews,  110  111.  223;  Graves  y.  Niles,  1  (Tcnn.)  418;  Mechanics' Hiink  »•.  Smith,  19 
Walker  (Mich.),  .3.32.  .lohns.  (N.  Y.)    115;    Stepjer    r.  Davis,    8 

»  White    V.     Howard,    38    Conn.    342;     Tex.  Civ.  App.  23 ;   27  S.  W.  1068. 
Ravanna   Nar.  Co.  v.  Dawsons,  3  Grat.  ^chju  ,,.  Compjiny,  2  l)ouf,^   (.Mich.) 

(Va  )  19.  128;  Mohile  v.  Yuille,'3  Ala.  137. 

3  3;3 


,$  17  iNConroiiATiON  and  organization  of  corporations,  [part  I. 

^  U>.  Power  to  sue  and  be  sued.  —  It  luia  becil  the  rule  of  tllC 
coiiils  from  time  immemorial  to  reeognize  and  enforce  the 
j)o\vcr  of  corporations  to  sue  and  be  sued  under  and  by  their  cor- 
porate name  as  incident  to  such  corporate  existence.^ 

^  17.  Express  Powers,  Definition  of;  Enumeration  of.  —  Ex- 
press powers  arc  those  whicli  arc  cither  granted  to  all  corpora- 
tions alike  by  statute,  whether  inserted  in  the  charter  or  not, 
or  else  arc  those  which  are  permitted  by  statute  to  such  corpora- 
tions as  may  see  fit  to  take  advantage  of  them,  by  reserving  such 
powers  in  the  charter'  itself.  Statutes  of  the  character  first  re- 
ferred to  are  construed  by  the  courts  to  be  ijjso  facto  read  into 
the  charter,  thereby  becoming  part  and  parcel  of  it.  On  the  other 
hand,  the  last-named  powers  can  only  be  availed  of  by  the  corpo- 
ration when,  as  has  been  stated,  they  are  specifically  reserved  or  set 
forth  in  the  articles  of  incorporation.  Express  powers  relate  not 
only  to  the  right  to  engage  in  a  special  line  of  business  as  set 
forth  in  the  statement  in  the  articles  of  the  object  or  purposes  for 
which  the  corporation  is  formed,  but  they  relate  as  well  to  other 
powers  which  are  here  termed  "express,"  inasmuch  as  they 
depend  upon  the  existence  of  specific  statutes  authorizing  their 
exercise  by  such  corporations  as  desire  to  avail  themselves 
thereof.  These  express  powers  may  be  divided  into  twenty-eight 
classes,  enumerated  as  follows:  (1)  power  to  purchase  its  own 
capital  stock  ;  (2)  power  to  subscribe  for,  purchase,  and  hold  stock 
in  other  corporations  ;  (3)  power  to  consolidate  with  other  cor- 
porations ;  (4)  power  to  transact  all  or  any  part  of  its  business 
outside  of  the  State  of  its  origin ;  (5)  power  to  extend  its  cor- 
porate existence ;  (6)  power  to  change  its  corporate  name  ;  (7) 
power  to  increase  or  decrease  its  capital  stock  ;  (8)  power  to 
issue  preferred  stock  ;  (9)  power  to  change  the  corporate  pur- 
poses ;  (10)  power  to  change  the  numlicr  of  directors  ;  (11)  power 
to  change  its  domiciliary  office  or  place  for  the  transaction  of  its 
business;  (12)  power  to  acquire  and  enforce  a  lien  upon  stock  of 
the  corporation  to  secure  the  payment  of  debts  due  the  corporation 
from  stockholders  ;  (13)  power  to  levy  assessments  against  the 
stockholders  with  tlie  right  to  forfeit  the  stock  for  non-payment 
thereof ;  (14)  power  to  authorize  voting  at  stockholders'  meetings 
by  proxy ;  (15)  power  to  allow  cumulative  voting  at  the  election 
of  directors  ;  (16)  power  to  issue  stock  as  full   paid  and   non- 

1  S.  W.  Co.  V.  Armstrong,   17  Me.  34. 

34 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  17 

assessable  in  exchange  for  property  or  services  ;  (17)  power  to 
sell  the  corporate  assets;  (18)  power  to  voluntarily  dissolve  the 
corporation  without  recourse  to  the  courts  ;  (19)  power  to  insert 
in  the  charter  provisions  for  the  regulation  of  the  internal  affairs 
of  the  corporation  ;  (20)  power  to  authorize  directors  to  adopt  by- 
laws;  (21)  power  to  authorize  appointment  of  executive  com- 
mittee from  board  of  directors  ;  (22)  power  to  enlarge  or  diminish 
corporate  powers;  (23)  power  to  change  par  value  of  shares; 
(24)  power  of  bondholders  to  vote  at  elections  of  directors  ;  (25) 
power  to  classify  directors  ;  (26)  power  to  amend  articles  before 
organization  ;  (27)  power  to  surrender  charter  before  organiza- 
tion ;  (28)  power  given  to  minority  stockholders  to  compel 
purchase  of  their  holdings  upon  consolidation. 

Of  the  foregoing  enumerated  powers,  the  following  when  ex- 
pressly authorized  by  statute  are  applicable  to  all  corporations 
alike,  whether  reserved  or  enumerated  in  the  articles  of  incorpora- 
tion, to  wit:  The  power  to  consolidate  with  other  corporations ;  to 
perform  constituent  acts  outside  of  the  State  of  its  origin;  to 
extend  its  corporate  existence  ;  to  change  its  corporate  name  ;  to  in- 
crease or  decrease  its  capital  stock;  to  change  the  corporate  pur- 
poses, the  number  of  its  directors,  its  domiciliary  office  or  i)lace 
for  the  transaction  of  its  business  ;  to  acquire  and  enforce  a 
lien  upon  stock  of  the  corporation  to  secure  the  payment  of  debts 
due  the  corporation  from  stockholders ;  to  levy  assessments  against 
the  stockholders  with  the  right  to  forfeit  stock  for  non-payment 
thereof;  to  authorize  voting  at  stockholders'  meetings  by  proxy  ; 
to  permit  cumulative  voting  at  election  of  directors  (unless  such 
right  is  merely  made  permissible  by  statute)  ;  to  issue  stock  as  full 
paid  and  non-assessable  in  exchange  for  property  or  services  ;  to 
sell  the  corporate  assets  in  their  entirety  ;  to  voluntarily  dissolve 
the  corporation  without  recourse  to  the  courts;  to  authorize  the 
directors  to  adopt  ])y-laws  (unless  such  authority  is  by  statute  re- 
quired to  1)0  reserved  in  the  articles  of  incorporation)  ;  to  apjwint 
an  executive  committee;  to  enlarge  or  diminish  the  corporate 
[)Owers ;  to  change  the  par  value  of  shares ;  to  amend  articles 
before  organization  ;  to  surrender  ciiarter  before  organization  ; 
power  given  to  minority  stockholders  to  compel  purchase  of  their 
holdings  upon  consolidation. 

Of  the  remaining  ex{)ress  powers  it  is  prol);il.ly  in  accord  with  the 
general  current  of   authority  in  this  country  to  say  that  to  bo 

35 


§  IS    INTOUrOKATION   AND    ORGANIZATION   OP   CORPORATIONS.    [PART  I. 

available  to  the  corporation  they  must  be  reserved  or  s])ccified  in 
the  articles  of  incorporation.  The  powers  to  which  rerercnce  is 
here  made  may  be  enumerated  as  follows :  To  subscribe  for, 
jiurchase,  and  hold  stock  in  other  corporations  ;  to  transact  all 
or  any  part  of  its  business  outside  of  the  State  of  its  origin ;  to 
issue  preferred  stock  ;  the  power  to  insert  in  the  charter  provisions 
for  the  regulation  of  the  internal  affairs  of  the  corporation ; 
power  of  bondholders  to  vote  at  election  of  directors ;  power  to 
classify  directors  ;  and  possibly  power  to  purchase  its  own  capital 
stock. 

§  18.  PoTver  of  Corporations  to  purchase  their  own  Stock. — 
There  is  considerable  contlict  of  opinion  in  this  country  relative 
to  the  question  whether  a  corporation  may  purchase  its  own  stock 
without  express  statutory  authority  so  to  do.  One  line  of  deci- 
sions holds  to  the  view  that  such  power  exists  only  when  expressly 
conferred  by  statute  no  matter  what  the  purpose  may  be.^  Other 
courts  of  equally  high  standing  take  the  view  —  and  this  we  believe 
to  be  the  true  one  —  that  every  corporation  has  implied  power  to 
purchase  its  own  stock  provided  it  does  so  in  good  faith  and  with- 
out prejudice  to  the  rights  of  creditors.^  It  has  been  said  that, 
"  generally  speaking,  a  corporation,  when  acting  within  the  scope 
of  the  purposes  of  its  organization,  has  the  same  power  to  con- 
tract with  reference  to  such  powers  as  an  individual.  We  believe 
the  rule  to  be  well  settled  in  the  United  States  by  the  overwhelm- 
ing weight  of  authority  and  reason  that  a  private  corporation  may 
purchase  its  own  stock  if  the  transaction  is  fair  and  in  good  faith  ; 
if  it  is  free  from  fraud,  actual  or  constructive  ;  if  the  corporation 
is  not  insolvent  and  in  process  of  dissolution,  and  if  the  rights  of 
creditors  are  in  no  way  affected  thereby."^ 

Where  there  is  no  formal  corporate  action  taken,  authorizing 
the  purchase  of  the  company's  own  stock,  a  purchase  made  thereof, 
even  though  all  the  stockholders  separately  consented  thereto, 
would  be  invalid  as  against  creditors.* 

1  Crandall  v.  Lincoln,  52  Conn.  73;  Vt.  131;  Chapman  w.  Company,  62  N.J. 
Currier  u.  Company,  56  N.  H.  262 ;  Morgan  497;  41  Atl.  690;  Belknap  v.  Adams,  49 
V.  Lewis,  46  O.  St.  1  ;  17  N.  E.  558.  La.  Ann.  1350;  22  Sou.  382  ;  Ins.  Co.  v. 

2  City   Bank  Columbus  v.   Bruce,   17  Swigert,  135  111.  162;  25  N.  E.  382;  Por- 
N.  Y.  507  ;  N.  E.  T.  Co.  v.  Abbott,  162  ter  v.  Company  (Mont.),  74  Pac.  938. 
Mass.  148;  38  N.  E.  432;  Clapp  v.  Peter-  »  Porter  v.  Company  (Mont.),  74  Pac. 
sen,  104  111.  26 ;  Hall  &  Farley  v.  Render-  938. 

eon,  126  Ala.  449;  Bank  v   Company,  18         *  De  La  Vergne  Refrigerator  Machine 

30 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  19 

Some  of  the  States  expressly  authorize  corporations  to  purchase 
shares  of  their  own  capital  stock,  while  others  expressly  forbid  it.^ 
The  rule  of  course  does  not  apply  to  those  cases  where  statutes 
exist  expressly  authorizing  the  forfeiture  of  stock  for  non-pay- 
ment of  assessments.^  The  purchase  by  a  corporation  of  its  own 
stock  docs  not  extinguish  it.^  Many  of  the  States  have  statutes 
expressly  forbidding  corporations  to  vote  their  own  stock  when 
held  or  owned  by  them.  Even  in  the  absence  of  such  statute,  it  is 
probable  that  the  courts  would  enjoin  corporations  from  voting 
their  own  stock.*  By  statute  in  a  number  of  States  corporations 
are  forbidden  to  purchase  their  own  stock. ^ 

§  19.  Power  to  subscribe  for,  purchase,  and  hold  Stock  in  other 
Corporations.  —  The  prevailing  rule  in  this  country  is  that  unless 
the  power  is  expressly  given  by  statute  or  by  reservation  of  such 
right  in  the  charter,  corporations  have  no  implied  power  to  sub- 
scribe for,  purchase,  or  hold  stock  in  other  corporations.^ 

An  attempt  has  been  made  in  some  States  to  establish  the  rule 
that  where  the  statute  does  not  expressly  prohibit  such  act,  the 
corporation  may  purchase  stock  in  other  corporations  without  anv 
express  authority  so  to  do,  provided  the  circumstances  are  such 
as  to  render  the  transaction  a  necessary  and  proper  means  for 
accomplishing  the  objects  of  its  creation." 

If,  however,  there  is  no  statutory  prohibition  in  the  matter  and 
the  State  officials  permit  the  insertion  in  the  articles  of  the  power 
to  purchase  and  hold  stock  in  other  corporations,  the  exercise  of 
such  power  is  unquestionably  valid.^  In  the  same  connection  it 
may  l)e  oljserved  that  a  corporation  cannot  organize  subsidiary  com- 
panies unless  such  power  is  given  in  express  terms  in  the  charter 
or  In-  necessary  implication  from  the  powers  thereby  conferred.^ 

Co.  V.  German    Savings    Institution,  175  40  Ga.  .582;  First  Nat.  Banic  ;•.  Nat.  Ex- 

U.  S.  38;  44  L.  E.  6.5.  change  Bank,  92  U.  S.    122;  Knowles  v. 

1  See  I'art  III. Table  l.'i.page  .58.5;  also  San(ierc(;cix,  107  Cal.  629;  40  I'ac.  1047. 
Tolrnan  r.  Company  (Dak.),  22  N.  W.  505.  7  Hju  y_  Nisl)et,  100  Ind.  341  ;  Teslitigo 

2  Taylor  v.  Comj»any,  6  Ohio,  83;  Co.  v.  Company,  50  111.  App.  624;  S.  P. 
State  V.  A.s.sociation,  35  0.  St.  258.  T.  Co.  v.  Company,  50  Minn.  93  ;  52  N.  \V. 

'*  Hank  v.  Wickcrsham,  34   Cal.  444;  274;   Steamship  Co.  v.  Com])any,  28  La. 

Clapp  r.  Peterson,  104  III.  26.  An.   173. 

«  See  McNeely  v.  Woo.lruff,   13  N.  J.  »  N.  S.  Co.  v.  Ilorton   (Ncli),  93  N.  W. 

Law,  352;  Brewster?;.  Hartley,  37  Cal.  15.  225;    I)e  La  Vergnc  Hefrigeniting   Mii- 

6  See  Tolman  v.  Company  (Dak.),  22  chine  Co.  v.  Gorman  Savings  Institution, 

N.  W.  .505.  175  U.  S.  .38  ;  20  S.  Ct.  20. 

<>  Franklin  Bank  »•.  Commercial  Bank,  »  Lagronev.  Timt.ierman,  46  S.  C.  372  ; 

36  O.  St.  258;  Central  Ky.  Co.  v.  Collins,  24  S.  E.  290. 

37 


§  -21    INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

In  Alaska,  District  of  Columbia,  and  Georgia  corporations  arc 
forl>iiklcn  by  statute  to  hold  stock  in  other  corporations. 

J^  '10.  Power  to  consolidate  with  other  Corporations.  —  Corpora- 
tions cannot  consolidate  as  against  dissenting  stockholders, 
however  desirable  or  beneficial  the  consolidation  may  be,  unless 
legislative  authority  is  granted  to  that  end.^  In  the  exercise  of  the 
police  power  of  the  State  it  may  lawfully  prohibit  the  consolidation 
of  corporations.^ 

Consolidation  of  corporations  to  a  greater  or  less  extent  is 
permitted  by  statute  at  the  present  time  in  the  States  of  Alabama? 
California,  Connecticut,  Delaware,  Illinois,  Kentucky,  Maine, 
Montana,  Nevada,  New  Jersey,  New  York,  North  Carolina,  Vir- 
ginia, and  West  Virginia.  An  attempt  has  been  made  to  lay  down 
the  rule  that  in  order  to  effect  a  lawful  consolidation  as  between 
two  corporations,  the  power  to  so  consolidate  must  be  conferred 
by  each  of  the  States  under  whose  laws  they  were  created.*''  A 
better  rule,  however,  and  the  only  practicable  one  seems  to  be 
this  :  That  either  statutory  power  to  dispose  of  all  the  assets  of 
the  corporation,  or  in  the  absence  thereof,  the  consent  of  all  the 
stockholders  must  be  obtained  to  the  sale  of  the  assets  of  one 
corporation  to  another.  Consolidation  in  this  way  then  takes  the 
form  of  a  selling  out  and  of  accepting  money  or  shares  in  the  new 
corporation  in  return  for  the  assets  of  the  old.* 

§  21.  Power  to  transact  all  or  any  Part  of  the  Corporate  Business 
outside  of  the  State  of  its  Domicile.  —  If  there  are  no  statutory  re- 
strictions, a  corporation  has  implied  power  to  carry  on  its  business 
at  any  place  within  the  State  in  which  its  charter  is  procured.^ 
The  statutory  requirement  requiring  the  corporation  to  fix  in  the 
articles  its  principal  place  of  business  does  not  prohibit  under 
ordinary  circumstances  the  transaction  of  other  business  within 
the  State.^ 

Long  ago  in  Bank  of  Augusta  v.  Earle '  Chief  Justice  Taney, 

1  Pearce  y.  Ry.  Co.,  91  How.  341 ;  Hill  Racine,  etc.  Ry.  Co.  v.  Company,  49  111. 

j;.  Nisbet,  100  Ind.  341;  Reople  c.  Com-  331. 

pany,  121  N.  Y.  582;  24  N.  E.  834  ;  L.  &N.  ^  Ashley   Wire    Co.    v.   Company,    GO 

Ry.  Co.  i\  Kentucky,  161  U.  vS.  677.  111.  App.    179;    City  Bank    v.   Beech,    1 

"  2  L.  &  N.  Ry.  Co.  V.  Kentucky,  161  U.  S.  Blatcliford,  42,5  ;   Stickle  v.  Company  (N. 

677.                                                  "  J.  Eq.),  32  Atl.  708 ;  Underwood  v.  Wal- 

3  M.  dron,  12  Mich.  73  ;  Berthin  v.  Company, 

*  Matter  of  Prospect  Park,  etc  Ry.  Co.,  28  La.  An.  210;  Lane  v.  Bank,  9  IIei.sk. 

67  X.  Y.371 ;  Toledo,  etc.  Rv.  Co.  v.  Com-  (Tenn.)  419. 

pany,   9.5    Fed.   497  ;    36   C.  C.    A.    1.55  ;  "^  Potter  v.  Bank,  5  Hill  (N.  Y.),  490. 

Lanmau    v.    Coinpanv,    30    Pa.    St.    42;  ^  13  Peters,  519. 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  21 

coaiiiienting  upon  the  right  of  a  corporation  to  transact  business 
beyond  the  limits  of  the  domiciliary  State,  spoke  as  follows  : 

"It  is  very  true  that  a  corporation  can  have  no  legal  existence 
out  of  the  boundaries  of  the  sovereignty  by  wliich  it  is  created. 
It  exists  only  in  contemplation  of  law,  and  by  force  of  the  law  ; 
and  where  that  law  ceases  to  operate,  and  is  no  longer  obligatory, 
the  corporation  can  have  no  existence.  It  must  dwell  in  the  place 
of  its  creation  and  cannot  migrate  to  another  sovereignty.  But 
although  it  must  live  and  have  its  being  in  that  state  only,  yet  it 
does  not  by  any  means  follow  that  its  existence  there  will  not  be 
recognized  in  other  places ;  and  its  residence  in  one  state  creates  no 
insuperable  objection  to  its  power  of  contracting  in  another.  It  is 
indeed  a  mere  artificial  being,  invisible  and  intangible  ;  yet  it  is  a 
person  for  certain  purposes  in  contemplation  of  law.  .  .  .  Natural 
persons  through  the  intervention  of  agents  are  continually  making 
contracts  in  countries  in  which  they  do  not  reside  ;  and  where  they 
are  not  personally  present  when  the  contract  is  made ;  and  nobody 
lias  ever  doubted  the  validity  of  these  agreements.  And  what 
greater  objection  can  there  be  to  the  capacity  of  an  artificial  person, 
by  its  agents,  to  make  a  contract  within  the  scope  of  its  limited 
powers,  in  a  sovereignty  in  which  it  does  not  reside ;  provided  such 
contracts  are  permitted  to  be  made  by  them  by  the  laws  of  the 
place."  ^ 

The  strictly  legal  existence  of  a  corporation  is  confined  to  the 
State  which  created  it,  and  it  can  exercise  its  powers  in  another 
State  only  by  permission,  express  or  implied,  of  the  legislative 
power  thereof;  but  the  mere  right  to  purchase  and  sell  property 
will  be  recognized  and  protected  in  any  State  subject  only  to  the 
limitations  that  the  exercise  of  such  right  shall  not  be  contrary  to 
the  laws  or  settled  policy  of  the  latter  State  or  prejudicial  to  its 
interests  or  those  of  its  citizens.  Unless  the  Constitution  or  stat- 
utes declare  a  contrary  rule,  the  courts  of  another  State  are  l)ound 
to  recognize  the  right  of  a  foreign  corporation  to  collect  debts  due 
to  it,  by  receiving  a  conveyance  of  land.'^ 

In  order,  however,  to  avoid  complications  that  might  |)()ssibly 
arise  through  hostile  action  on  the  f)art  of  stoiikholdcrs  or  of  foreign 
States,  statutes  have  been  enacted  in  a  number  of  the  Conimon- 

1  See  Hall  v.  Company,  91  Ala.  303  ;  8  *  Thompson  v.  Waters,  25  Midi.  214. 

So.  348. 

39 


^5  -J:'    INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

wealths  oxprossly  authorizing  the  transaction  of  business  in  foreign 
states  and  jurisdictions.^ 

Under  the  progressive  incorporation  acts  in  force  in  many  of 
the  States  at  the  present  time  it  is  unquestionably  permissible  to 
organize  corporations  in  one  State  for  the  exclusive  purpose  of 
transacting  their  entire  business  in  other  States  and  Territories.^ 

ij  22.  Power  to  perform  Constituent  Acts  outside  of  the  Domi- 
ciliary State.  —  By  constituent  acts  is  meant  such  corporate  trans- 
actions as  are  separate  and  apart  from  its  ordinary  business 
dealings  with  third  parties  ;  such,  for  example,  as  the  organization 
of  the  corporation  in  the  first  instance,  the  adoption  of  by-laws, 
the  issuance  of  stock  certificates,  the  election  of  directors  and 
officers,  and  the  holding  of  stockholders'  meetings.^  As  a  general 
rule  such  constituent  acts  cannot  be  performed  without  the  domi- 
ciliary State. ■^ 

The  legislature  may,  of  course,  authorize  the  performance  of 
constituent  acts  beyond  the  limits  of  the  State.  This  has  been 
done  in  a  number  of  the  Commonwealths.^  It  is  probably  safe  to 
say  that  aside  from  organization  meetings  the  presence  of  stock- 
holders of  the  corporation  at  a  meeting  held  without  the  State  will 
estop  them  from  attacking  the  validity  of  the -proceedings  had  at 
such  meeting.^ 

§  23.    Power  to  extend  Corporate  Existence.  —  In  twenty-seven 

1  See  Part  III.  Table  12,  page  582.  See  428;  Galveston,  etc.  Ry.  Co.  ?;.  Cowdrey, 
Ashley  Wire  Co.  v.  Con)i)auy,  60  111.  App.     11  Wall.  459;  20  Law.  Ed.  199. 

179;  iveiinebec  Co.  v.  Cumpauy,  72  Mass.  *  Commonwealth  v.  Smith,  45  Pa.  St. 

204  ;  Asj)iuwall  v.  Company,  20  Ind.  492 ;  59  ;  Smith  v.  Company,  64  Md.  85  ;  20  Atl. 

Blodgett  r.  L.  Z.  Company,  120  Fed.  89.3.  10-32;  Tuckasegee  Mining  Co.  v.  Goodhue, 

2  Sec.  Nat.  Bank  v.  Hafl,  35  0.  St.  158  ;  118  N.  C.  981 ;  24  S.  E.  797  ;  Camp  v. 
M.  L.  &  S.  Co.  v.  Keinhard,  114  Mo.  218 ;  Byrne,  41  Mo.  525 ;  F.  T.  L.  Co.  v.  Laigle, 
21  S.  W.  488;  O.  M.  Co.  v.  Garst,  18  59  Tex.  339;  Craig  Co.  v.  Smith,  163 
R.  I.  484;  28  Atl.  973  ;  People  v.  Com-  Mass.  262;  39  N.  E.  1116;  Bellows  f.  Todd, 
jiauv,  153  111.  25;  38  N.  E.  752;  Tillcy  v.  39  Iowa.  209;  Hodgson  v.  Company,  46 
Coykendall,  172  N.  Y.  87  ;  65  N.  E.  574 ;  Minn.  4.54  ;  49  N.  W.  197  ;  Harding  v.  Com- 
Minn.,  etc.  Co.  v.  Denslow,  46  Minn.  171  ;  pany,  182  111.  551 ;  55  N.  E.  577  ;  Jones  v. 
48  N.  W.  771;  Wright  v.  Lee,  2  S  D.  Company,  20  Col.  417  ,  38  Pac.  700;  Mack 
596;  51  N.  W.  706 ;  A.,  etc.  R.  R.  Co.  w.  v.  Company,  90  Ala.  396;  8  So.  150; 
Fletcher,  35  Kan.  236 ;  1 0  Pac.  596  ;  North,  Aspinwall  v.  Company,  20  Ind.  492 ;  Court- 
etc.  Stock    Co.  V.    People,    147    111.   234 ;  right  v.  Deeds,  37  Iowa,  503. 

35  N.  E.  608;  Canada  S.  Ry.  Co.  v.  Geb-  &  See  Part  III.  Table  11,  page  581. 

hard,  109  U.  S.  527  ;  3  S.  Ct.  363  ;  Cowell  «  Handley  v.  Stutz,    139    U.    S.    417  ; 

V.  Springs  Co.,  100  U.  S.  55;  Hastings  v.  Galveston,  etc.  Ry.  Co.  v.  Cowdrey,   11 

Anacortes,   etc.   Co.,   29   Wash.    224;   69  Wall.  459 ;  see  also  Humphreys  y.  Mooney, 

Pac.  776 ;  Irvine  Co.  v.  Bond,  74  Fed.  849.  5  Col.  282. 
'  See  McCall  v.  Company,   6    Conn. 

40 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  26 

of  the  Commonwealths  perpetual  existence  is  permitted  in  the 
iucorporatioa  of  companies  therein.  The  power  to  extend  such 
existence  is  not  of  any  material  importance  in  these  Common- 
wealths. Twenty-five  of  the  incorporation  acts  specifically  provide 
for  the  extension  of  corporate  existence.  Without  such  statutory 
authority  corporate  existence  cannot  be  extended.^ 

In  some  of  the  States  extension  of  corporate  existence  must  be 
accompanied  by  the  payment  of  an  organization  tax,  as  is  the  case 
of  new  corporations.  Thus,  in  New  Jersey,  where  such  a  provi- 
sion exists,  it  has  been  held  that  such  tax  must  be  paid  even 
though  the  extension  of  the  corporate  existence  was  obtained  in 
the  guise  of  an  amendment  to  the  charter.^ 

§  24.  Power  to  change  the  Corporate  Name.  —  Without  statu- 
tory authority  so  to  do  corporations  cannot  change  their  name.^ 
If  the  proposed  change  of  name  conflicts  with  the  name  of  an 
existing  domestic  corporation.  State  officials  are  justified  in  refus- 
ing to  allow  the  certificate  showing  the  adoption  of  the  new  name 
to  be  filed.* 

Some  of  the  States,  as,  for  example,  New  York  and  California, 
only  permit  change  of  name  by  application  to  the  courts. 

§  25.  Pow^er  to  increase  or  decrease  Capital  Stock.  —  A  corpo- 
ration has  no  implied  power  to  either  increase  or  decrease  the 
capital  stock.^  Such  power  must  be  conferred  in  express  terms 
by  the  incorporation  act  under  which  the  corporation  is  organized.^ 

Power  to  increase  or  decrease  capital  stock  vests  in  the  stock- 
holders and  not  in  tiic  directors."  Frequently  incorporation  acts 
provide  that  the  stock  siiall  not  be  diminished  to  less  than  the 
amount  of  tiie  corporate  debts.  Such  is  the  case  in  California 
and  other  States.  Certificates  of  stock  issued  on  a  fictitious 
increase  of  stock  are  void.^ 

§  26.   Power  to  issue  Preferred  Stock. —  Stockholders  enjoying 

J  See  Part  III.  Table  8,  page  578 ;  also  «  Sutlierlaiul    v.  Olcott,  95  N.   Y.  93 ; 

post,  sec.  120.  Cran<lall  r.  Liiiculn,  52  Conn.  73  ;  G.  L.  & 

2  National  Lead  Co.  r.  Dickinson  (N.  J),  II.  Insurance  Co.  r.  Kanif)er,  73  Ala.  325; 

57  Atl.  138.  Palmer  i'.  Bank,  72   Minn.  2f.f.;  75  N.  W. 

»  Sykes  ?;.  People,  132  111.  32  ;  23  N.  E.  380;  Detroit   ClianiNer   of   Commerce  v. 

391 ;  C.  I).  &  M.  Uy.  Co.  v.  Keisel,  43  la.  State  Secretary,  109  Midi   G9I  ;  f.7  N.  W. 

39;  Glass  Co.    i,-.  Companv,  32  In<l    37G.  897. 

*  In  re  U.  S.  M.  Rep.  AJrency,  115  N.  Y.  ^  C.  C.  Ry.  Co.  v.   Alkrton,   IS  Wall. 

176;  21  N.  E.  1034;  Peojile  v.' Company,  233. 
Ill  Mich.  405;  69  N.  W.  653.  »  Beitman    v.   Steiner,    98    Ala.    241; 

6  Ins.  Co.  y.  Kamper,  73  Ala.  325;  Pull-  13  Sou.   87. 
man  v.  Upton,  96  U.  S.  328. 

41 


^  20  INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.  [PART  I. 

ju-cfercntiiil  or  additional  rights  not  enjo}'ed  by  the  lioldcrs  of 
coiumon  shares  are  called  "  preferred  stockholders."  The  issu- 
ance of  preferred  stock  is  a  mode  by  which  a  corporation  obtains 
funds  for  its  enterprise,  without  borrowing  money  or  contracting 
a  dcbt.^  The  question  as  to  whether  or  not  preferred  stock  may 
be  issued  by  corporations  without  express  authority  by  law  is  a 
somewhat  difficult  one  to  settle.  In  twenty-five  of  the  States '-^  the 
question  is  settled  by  the  existence  of  statutes  expressly  authoriz- 
ing the  issuance  of  preferred  stock,  and  even  in  those  States 
where  no  such  statutes  exist  it  is,  with  some  few  exceptions,  the 
custom  of  the  State  officials  to  permit  the  insertion  in  the  articles 
of  incorporation  of  provisions  authorizing  the  issuance  of  j)referred 
stock.  The  action  of  such  officials  is  certainly  conclusive  as 
against  all  the  world  except  the  State.^ 

The  true  rule  governing  the  matter  now  before  us  is,  in  the 
opinion  of  the  writer,  best  set  forth  in  the  case  of  Campbell  v. 
American  Zylonite  Company.*  In  this  case  the  articles  of  incor- 
poration divided  the  capital  stock  of  the  corporation  into  shares, 
equal  in  amount  and  value.  Some  time  after  incorporation  one  of 
the  stockholders  executed  a  blank  assignment  of  certain  stock 
owned  by  him  to  a  third  party  as  security  for  a  loan.  Subsequently 
all  the  stockholders,  except  the  owner  of  this  pledged  certificate, 
at  a  meeting  duly  called  for  that  purpose,  voted  to  surrender  to 
the  corjioration,  without  consideration,  forty  per  cent  of  their 
stock,  and  authorized  the  corporation  to  reissue  this  forty  per  cent 
in  the  form  of  preferred  shares.  The  legality  of  this  act  was 
contested  by  the  holder  of  the  pledged  certificate,  and  in  passing 
upon  the  legal  question  involved,  the  court  spoke  as  follows: 

"  The  right  of  every  shareholder  to  his  proportion  of  the  profits  of 
the  corporation  was  vested,  and  in  the  absence  of  some  power  to 
change  the  relative  value  of  the  shares  conferred  by  statute  or  by 
the  articles  of  incorporation,  no  change  could  be  made  without  the 
consent  of  all  the  shareholders.  .  .  .  The  assignee  of  shares  having 
possession  of  the  certificates,  although  holding  under  unregistered 
transfers,  are  not  bound  by  contracts  between  the  registered  share- 
holders, the  corporation  and  all  the  other  shareholders  which  are  not 
wnthin  the  express  or  implied  powers  of  corporations  or  of  their  share- 
holders.    As  between  the  assignor  and  the  assignee,  the  unregistered 

1  Chaffee  v.  Company,  55  Vt.  110.  »  See  Hamlin  v.  R.  R.  Co.,  78  Fed.  670. 

2  See  Part  III.  Table  8,  page  578.  *  122  N.  Y.  455  ;  25  N.  E.  853. 

42 


CHAP.  I.]  DRAFTING   THE   CHARTER.  S  2b 

assignment  was  not  void.  It  follows  that  the  change  in  the  relative 
value  of  the  shares  which  this  corporation  and  its  registered  share- 
holders sought  to  effect  was  not  within  the  express  or  implied  powers 
conferred  upon  the  corporation  or  shareholders,  and  that  their  action 
is  not  binding  upon  the  holder  of  the  assigned  certificate  who  did  not 
consent  to  the  issuance  of  the  preferred  shares." 

In  Kent  v.  Quicksilver  Company  ^  the  court  addressing  itself  to 
the  question  now  before  us,  spoke  as  follows : 

<'  There  arises  the  query  whether  there  was  power  in  the  corporation 
to  distinguish  between  the  stockholders  in  it  to  form  them  into  two 
classes,  and  to  give  to  one  class  rights  in  the  corporate  property  and 
business  and  earnings  from  which  the  other  was  shut  out.  We  are 
not  prepared  to  say  that  at  the  first  the  corporation  might  not  have 
lawfully  divided  the  interest  in  its  capital  stock  into  shares  arranged 
in  classes,  preferring  one  class  to  another  in  the  right  which  they 
should  have  in  the  profits  of  the  business.  The  charter  gave  power 
to  make  such  by-laws  as  it  might  deem  proper  consistent  with  Con- 
stitution and  law.  We  know  of  nothing  in  the  Constitution  or  the 
law  that  inhibits  a  corporation  from  beginning  its  corporate  action  by 
classifying  the  shares  of  its  capital  stock,  with  peculiar  privileges  to 
one  share  over  another,  and  thus  offering  its  stock  to  the  public  for 
subscriptions  thereto.  No  rights  are  got  until  a  subscription  is  made. 
Each  subscriber  would  know  for  what  class  of  stock  he  put  down  his 
name,  and  what  right  he  got  when  he  thus  became  a  stockholder. 
There  need  be  no  deception  or  mistake,  there  would  be  no  tread- 
ing upon  rights  previously  acquired;  no  contract,  express  or  im- 
plied, would  be  broken  or  impaired.  Shares  of  stock  are  in  the 
nature  of  choses  in  action,  and  give  the  holder  a  fixed  right  in 
the  division  of  profits  or  earnings  of  the  company  so  long  as  it  exists, 
and  of  its  effects  when  it  is  dissolved.  That  right  is  as  inviolable  as 
is  any  right  in  property,  and  can  no  more  be  taken  away  or  lessened 
against  tlie  will  of  the  owner  than  can  any  other  right,  unless  power 
is  reserved  in  the  first  instance,  when  it  enters  into  the  constitution 
of  the  right;  or  is  properly  derived  afterward  from  a  superior  law 
giver.  It  is  manifest  that  any  action  of  a  corpf)rati()n  which  takes 
hold  of  the  shares  of  its  capital  stock  already  sold  and  in  the  hands 
of  lawful  owners,  and  divides  them  into  two  classes,  —  one  of  which 
is  thereby  given  prior  right  to  a  receipt  of  a  fixed  sum  from  the  earn- 
ings before  the  other  may  have  any  receii)t  therefrom,  and  is  given 
an  equal  share  afterward  with  the  other  in  what  earnings  may 
remain, — destroys  the  equality  of  the  shares,  takes  away  a  right 

1  78  N,  Y.  167. 

43 


§  26   INCORPORATION   AND   ORGANIZATION   OP   CORPORATIONS.   [PART  I. 

which  originally  existed  in  it,  and  materially  varies  the  effect  of  the 
certificate  of  stock.  It  is  said  that  when  a  corporation  can  lawfully 
buy  property  or  get  money  on  loan,  any  known  assurance  may  be 
exacted  and  given  which  does  not  fall  within  the  prohibition,  express 
or  implied,  of  some  statute.  But  the  prohibition  to  such  action  as 
this  is  found  not,  indeed,  in  a  statute  commonly  so  called,  but  in  the 
constitutional  provision  which  forbids  the  impairment  of  vested 
rights,  save  for  public  purposes  and  on  due  compensation.  The 
right  which  a  stockholder  gets  on  the  purchase  of  his  share,  and 
the  issue  to  him  of  the  certificate  therefor,  is  such  a  vested  right. 
It  is  contended  that  the  power  so  to  do  is  an  incidental  and  implied 
power  necessary  to  the  use  of  the  other  powers  of  the  corporation, 
and  is  a  legitimate  means  of  raising  money  before  securing  the 
agreed  consideration  therefor.  We  have  already  conceded  that  it  is 
legitimate  to  borrow  money  and  to  secure  the  repayment  of  it  with 
a  compensation  for  the  use  of  it.  But  that  is  when  it  is  done  in  such 
way  as  to  put  the  burden  upon  every  share  of  stock  alike,  and  to 
enable  every  share  of  stock  to  be  relieved  therefrom  alike ;  in  such 
way  as  to  preserve  the  equality  of  right  and  privilege  and  value  of  the 
shares,  and  maintain  intact  the  contract  thereto  with  the  stockholders. 
"  We  are,  therefore,  of  the  opinion  that  there  was  no  power  in  the 
corporate  body,  nor  in  a  majority  of  the  stockholders,  to  provide  by 
by-law  for  the  creation  of  a  preferred  stock,  so  as  to  bind  a  minority 
of  the  stockholders  not  assenting  thereto." 

In  what  has  been  stated  a  most  important  principle  has  been 
referred  to,  which,  it  is  believed,  is  controlling  upon  the  question  at 
hand.  This  principle  to  which  reference  is  here  made  is  that  the 
charter  proceeds  from  the  State,  and  that  nothing  can  be  legally 
done  by  the  corporation  acting  through  its  stockholders  not  au- 
thorized either  by  statute  or  by  the  charter  itself.  Thus  it  is 
clear  that  in  these  States  where  the  statutory  right  to  issue  pre- 
ferred stock  is  not  granted  and  the  charter  itself  only  provides 
for  common  stock,  no  preferred  stock  can  be  legally  issued  by  the 
stockholders  as  against  the  State,  except  by  amending  the  charter 
itself.     This,  too,  even  where  the  stockholders  consent.^ 

This  question  is  likely  to  be  presented  in  a  troublesome  form 
where  common  stock  has  been  pledged  to  creditors  before  the  pre- 
ferred stock  was  issued.^ 

From  a  careful  examination  of  the  authorities  it  may  bo  said 

^  Knoxville,  etc.  Co.  v.  City  of  Knox-  ^  See  j!;enerally  Lockhart  v.  Van   Als- 

ville,  98  Tenn.  1 ;  .37  S.  W.  883.  tyne,  .31  Mich.  76;  McGregor  y.  Insurance 

4-i 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  26 

that  in  order  to  constitute  an  issue  of  preferred  stock  valid  as 
against  all  the  world,  there  must  be  a  statute  authorizing  it,  or 
provision  therefor  inserted  in  the  charter.  To  make  the  issue 
valid  as  against  all  but  the  State,  the  consent  of  all  of  the  holders 
of  common  stock  to  the  issuance  of  preferred  stock  is,  doubtless, 
all  that  is  necessary. ^  It  is  hardly  necessary  to  add,  in  addition  to 
the  foregoing,  that  the  total  amount  of  common  stock  added  to 
the  preferred  stock  so  issued  must  not  in  any  case  exceed  the 
total  authorized  capital  stock  of  the  corporation. 

The  rights  of  holders  of  preferred  stock  depend  upon  the  terms 
of  the  statute  or  of  the  charter  or  by-law  authorizing  it.^  Ordi- 
narily the  power  to  authorize  the  issuance  of  preferred  stock  vests 
in  tlie  stockholders  and  not  in  the  directors.^ 

Where  a  portion  of  the  stock  of  the  corporation  is  issued  as 
])rcferred,  no  creditor  of  the  corporation  can  object,  provided  the 
money  paid  for  the  stock  reaches  the  treasury  of  the  corporation, 
and  the  dividends  on  the  stock  are  not  to  be  paid  except  out  of 
net  profits.*  Unless  the  statute  provides  otherwise,  preferred 
stockholders  may  be  deprived  of  the  right  which  they  would 
otherwise  have,  to  vote  their  stock  iu  the  same  manner  as  com- 
mon stockholders.^  This  is  commonly  done  either  by  charter  pro- 
vision or  by  a  by-law  adopted  before  any  preferred  stock  is  issued. 

Preferred  stock  cannot  be  lawfully  issued  with  the  provision  that 
it  shall  bear  interest  absolutely.^  In  order  to  make  preferred  stock 
a  lien  upon  the  corporate  assets  statutory  authority  is  necessary.'^ 

Co.,33  N.J.  Eq.  181;  Higginsf.Lansingh,  Ry.  Co.,  4  K.  &  J.   1;   27  L.  J.  Ch.   1; 

154  111.  301;  40  N.   E.  362;  Coviugtou,  Corry  y.  Loudouderry,  etc.  Co.,  29  Beav. 

etc.    Co.    V.    Sargent,    1    Ciiin.    Sup.   Ct.  272;  3  L.  J.  Ch.  290;  Coates  v.  Nottiug- 

354  ;  Elevator  Co.  v.  Memphis,  etc.  Co.,  ham  Water  Works  Co.,  30  Beav.  86. 

85   Tenn.    703;    5   S.    W.  52;    March  v.  i  Higgius    i-.  Lansiiigh,    154    111.   301; 

Eastern  K.  K.  Co.,  43  N.  H.  515;  Bates  40  N.  E.  362. 

V.  Androscoggin,  etc.  U.  R.  Co.,  49  Me.  2  gcott  v.  B.  &  0.   R.    R.  Co.,  93  Md. 

491;    Frouty    u.    Mich.,  etc.    R.    R.    Co.,  75 ;  49  Atl.  327. 

1    Hun,  6.^)5;    Kent  v.   Quicksilver    Min.  »  See  Colt  i».  Freed,  15  Utah,  426;  49 

Co.,  12  Hun,  53  ;  Junes  (;.  Terre  Haute,  etc.  Pac.  533. 

Co.,  57   N.  Y.   196;    Hoyt  v.  Quicksilver  *  First  Nat.  Bank  of  Peoria  r.  Peoria 

Mining  Co.,  78  N.  Y.  1.59;  8.  c.  9  Week.  Watch  Co.,  191  111.  128;  60  N.  E.  8.59. 

Digest,  1 87,  aff'g  17  Hun,  169;  Curry  i;.  6  Lockhart   v.  Van  Alstyne,  31    Mich. 

Scott,  54   Pa.  St.  270;  Sturge^  v.  E.  Un.  76;  Mackintosh  ij.  Company,  32  Fed.  3.")0; 

Ry.  Co.,  7  I)e  Ge.\,  M.  &  G.  158  ;  Matthews  Miller  v.  Ratterman,  47  O.  St.  141. 

r.  Gt.  Northern  R.  R.  Co.,  28  L.J.  Ch.  375  ;  «  Winscott  v.  luvestmeut   Co.,  63  Mo. 

Green's  Brice   Ultra  Vires,  145;  Hutton  Ap.  367. 

V.  Scarborough  Hotel  Co.,  2  Drew  &  Sim.  '  Continental  Trust  Co.  v.  Toledo,  etc. 

514  ;    Hook    V.   Gt.    Western    Ry.   Co.,  3  Ry.  Co.,  72  Fed.  92. 

L.    R.  Ch.  262 ;    Henry  v.   Gt.  Northern 

45 


§  :2S  iNcourouATioN  and  organization  of  coiiroRATioNs.  [fart  I. 

s^  27.  Power  to  change  the  Corporate  Purposes.  —  In  the  eailv 
days  tlio  riuht  of  amciulnicnt,  when  the  same  related  to  alterint^ 
the  original  purposes  of  corporations,  was  jealously  guarded  and 
limited  hoth  by  statute  and  by  judicial  construction.  In  later 
years  there  has  been  evinced  greater  liberality  in  this  regard,  as 
evidenced  by  granting  to  corporations  unlimited  power  of  amend- 
ment.^ The  only  real  difficulty  in  this  connection  arises  when 
an  attempt  is  made  to  so  completely  change  the  original  purposes 
for  which  a  corporation  was  formed  as  in  effect  to  create  a  new 
corporation.  Under  the  Pennsylvania  Incorporation  Act  gov- 
erning amendments,  it  was  held  that  this  could  not  be  done.^ 

The  present  attitude  of  the  courts  on  this  subject  is  well  shown 
by  a  recent  New  Jersey  decision,  —  that  of  Meredith  v.  New  Jersey 
Zinc  &  Iron  Company .^  In  this  case  the  right  of  amendment, 
even  when  producing  fundamental  changes  in  the  corporate  pur- 
poses, was  sustained.* 

It  appears  clear  that  under  the  liberal  power  of  amendment 
existing  to-day  in  the  majority  of  the  States,  any  changes  may  be 
made,  no  matter  how  fundamental,  by  the  consent  of  all  the 
stockholders.  And  where  the  matter  is  simply  one  between  the 
corporation  and  the  State,  the  right  to  make  such  an  amendment 
cannot,  in  the  States  referred  to,  be  questioned  when  adopted  by 
the  requisite  number  of  stockholders. 

§  28.  Power  to  change  Number  of  Directors.  —  Only  in  those 
States  where  the  number  of  directors  is  required  to  be  fixed  in 
the  articles,  is  it  necessary  to  have  statutory  authority  to  change 
the  same.  In  other  States  the  matter  of  amendment  may  be 
regulated  by  the  by-laws.  However,  in  the  larger  number  of  the 
Commonwealths,  the  power  to  amend  the  articles  with  reference 
to  changing  the  number  of  directors  is  required  to  be  based  upon 
express  statutory  authority  so  to  do.^ 

1  See  Part  in.,  Table  8,  page  578.  694;   38   N.  W.  113;   Stickle  v.  Liberty 

2  In  re  Pennsylvania  Bottling  Co.,  19  Cycle  Mfg.  Co.  (N.J.  Eq.),  32  Atl.  708; 
Pennsylvania  CouutA-  Court  Reports,  593.  Banet  v.  Company,  13  111.  504;  Koss  v. 
See  also  State  v.  Taylor,  53  Iowa,  759 ;  6  Company,  77  111.  134 ;  Pai-.  Ky.  Co.  y.Ren- 
N.  W.  39.  shaw,  18  Mo.  210  ;  Asliton  u.  Burbank,  2 


3  Meredith  v.  Company,  59  N.  J.  Eq 
257;   44  Atl.  55.     See  also  sec.  112,  post 

*  See  also  Grand  River  College  v.  Rob 
ertson,  67  Mo.  App.  329  ;  Mercantile  State 
ment  Co.  /•.  Kneal,  51  Minn.  263  ;  53  N.  W 
632  ;  Bowie  v.  Grand  Lodge,  99  Cal.  392 
34  Pac.   103;    Day    v.  Company,   75  la 

4G 


Dill.  (U.  S.)  435;  Del.  Ry.  Co.  v.  Thorp,  1 
Hurst  (Del.),  149;  M.  B.  Ry.  Co.  v.  Sullivan, 
37  Ga.  240;  Com.  i-.  Ciillen,  13  Pa.  St.  133. 
6  See  Part  III.  Table  16,  page  586  ;  also 
see  Matter  of  Griffing  Iron  Co.,  63  N.  J. 
Law,  168;  41  Atl.  9311;  63  N.  J.  Law, 
357;  46  Atl.  1097. 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  30 

§  29.  The  Power  to  change  the  Corporate  Domicile  and  Principal 
Place  of  Business.  —  As  will  hereafter  be  seen,  it  is  essential  to 
corporate  existence  that  the  corporation  should  have  a  home.^  It 
is  the  naming  of  the  domiciliary  office  in  the  articles  which  fixes 
the  residence  of  the  corporation  for  jurisdictional  purposes,  and 
fixes  the  usual  place  for  holding  stockholders'  and  directors'  meet- 
ings. If  it  is  dcsii-ed  to  change  the  domicile,  or  if  the  location  of 
the  corporation's  principal  place  of  business  is  to  be  transferred 
from  one  place  to  another,  an  amendment  to  the  articles  must 
be  had  under  legislative  sanction. ^  It  should,  however,  be  noted 
in  this  connection,  that  the  corporation's  domicile  and  its  princi- 
pal place  of  business  are  not  necessarily  one  and  the  same  thing.^ 

Again,  if,  as  is  the  case  in  some  States,  the  name  of  the  agent 
upon  whom  process  upon  the  corporation  may  be  served,  is  re- 
quired to  be  set  forth  in  the  articles,  in  order  to  lawfully  substi- 
tute a  new  agent,  an  amendment  to  the  articles  is  necessary, 
made  pursuant  to  statutory  authority  given  in  the  premises.* 

§  30.  Po^ve^  to  acquire  and  enforce  a  Lien  upon  Stock  to  se- 
cure the  Payment  of  Debts  Due  the  Corporation. —  In  a  large 
number  of  the  States  statutes  exist  expressly  granting  to  cor- 
j)orations  the  right  to  enforce  a  lien  upon  the  stock  of  its  members 
for  the  purpose  of  securing  the  payment  of  debts  due  from  such 
members  to  the  corporation.^ 

The  courts  are  not  by  any  means  in  entire  agreement  as  to 
wliether  statutory  authority  to  enforce  such  a  lien  is  essential  to 
its  validity.  Some  courts,  of  excellent  repute,  maintain  the  affirm- 
ative, and  others  take  the  opposite  view.''  It  seems  fairly  certain 
that  at  common  law  such  a  right  did  not  exist.^ 

The  true  view  appears  to  be  that  while  at  common  law  a  cor- 
poration had  no  lien  on  the  shares  of  its  capital  stock  for  the 
debts  due  it  from  the  stockholders,  nevertheless  such  a  lien  may 
be  acquired  either  when  given  by  statute  or  when  such  right  is 

1  See  poHt,  sec.  54.  6  See  Part  III.  Tahlo  9,  page  579. 

2  See  Stickle  v.  Liberty  Cycle  Mfg.  «  Co.stello  v.  Company,  69  X.  H.  405,  43 
Co.  (N.  J.  Eq),  32  Atl.  708;  Kennott  Atl.  640;  Young  v.  Vough,  23  N.J.  Kq. 
r.  Company,  68  N.  H.  432;  39  Atl  585;  325;  Moore  v.  Bank,  52  Mo.  377  ;  In  re 
Ilarri.s  r.  McGregor,  29  Cal.  124.  Klaus,  67  Wi.s.  401  ;   29  N.W  582  ;  Farm- 

'""'  Van  Ktten   v.   Eaton,   19  Mich.  187;  ens',  etc.   Rank,   v.   Wasson,  48    la.  330; 

McConiifll  V.  Company  (Mont),  74  Pac.  Cont.  T.  H.  Co.  v.  Toledo,  etc.  Hy.  Co.,  72 

194.  Fed.  92. 

*  See  .Johnson  v.  Mason  Lodge,  21  Ky.  "  Urinkr-rhoff,  etc.  Co,  r.  Company,  118 

Law  Kep.  493;  51  S.  W.  620.  Mo.   447;  24  S.  W.  129. 

47 


§  31    INCOltrORATION    AND   ORGANIZATION    OF   CORPORATIONS,    [PART  I. 

preserved  by  inserting  provisions  therefor  in  the  Articles  of  Incor- 
pi)ration,  or  by  the  passage  of  a  valid  by-law,  or  by  inserting  a 
provision  therefor  in  the  stock  certificates.^ 

s;  31.  Power  to  levy  Assessments  against  the  Stockholders  with 
the  Right  to  forfeit  their  Stock  for  Non-payment  thereof.  —  With 
some  few  exceptions  the  right  to  forfeit  stock  for  non-payment  of 
valid  assessments  levied  against  it  is  preserved  by  statute  in  most 
of  the  States  and  Territories.^  Even  in  the  absence  of  snch  statute 
the  right  to  forfeit  stock  for  non-payment  of  valid  assessments  when 
given  to  the  corporation  by  its  by-laws  will  probably  be  enforced  by 
the  courts.  In  any  event  the  common  law  remedy  would  exist, 
giving  the  corporation  the  right  to  recover  judgment  against  the 
delinquent  stockholders  for  the  amount  of  such  assessments.^ 

In  all  cases  the  right  to  forfeit  stock  is  considered  to  be  merely 
a  cumulative  remedy.^  The  right  to  levy  assessments  upon 
stockholders  does  not  exist  after  payment  by  such  stockholders 
for  their  stock  in  full,  unless  the  power  to  do  so  is  conferred 
either  by  statute,  by  the  articles  of  incorporation,  or  by  the  unani- 
mous consent  of  all  the  stockholders.^  But  even  in  the  absence 
of  express  power  to  declare  a  forfeiture  of  stock  for  non-payment, 
a  corporation  may  sue  for  amount  of  subscription  to  the  capital 
stock,  and  on  failure  to  collect  the  amount  subscribed  may  secure 
payment  by  sale  of  stock  subscribed.^ 

On  the  general  subject  of  assessments  the  following  may  be  said  : 
provisions  for  the  forfeiture  of  capital  stock  for  the  non-payment 
of  assessments  must  be  just  and  reasonable  in  order  to  be  valid.^ 
The  terms  of  the  statute  in  any  event  must  be  strictly  complied 
with.'  The  power  to  levy  assessments  rests  in  the  directors  by 
virtue  of  their  othce  and  not  in  the  stockholders.^     Even  where 

1  Union  Bank  v.  Laird,  2  AVheaton  Neb.  642  ;  79N.  W.  560;  Duluth  Club  y. 
(U.  S.),  390;  St.  Louis  Per.  Ins.  Co.  v.  McDonald,  74  Minn.  254;  76  N.  W.  1128; 
Goodfellow,  9  Mo.  149 ;  Van  Sands  w.  Bank,  State  i-.  Association,  23  N.  J.  Law,  195; 
26  Conn.  144 ;  Sargent  v.  Insurance  Co.,  Sullivan  Co.  Club  v.  Butler,  26  N.  Y. 
25  Mass.  90.  See  also  Atchison  Bank  v.  Miscellaneous  Reports,  306  ;  Mayberry  v. 
Durfee,  118  Mo.  431 ;  24  S.  W.  133  ;  V.  G.  Meade,  80  Me.  27  ;  12  Atl.  635  ;  Price's 
B.Co.  V.  Bloede,84  Md.  129;  34  Atl.  1127;  Appeal,  106  Pa.  St.  421  ;  Weeks  v.  Coni- 
Bisbop  V.  Globe  Co.,  135  Mass.  132.  pany,  55  N.  Y.  Sup.  Ct.  1. 

2  See  Part  III.  Table  17,  page  587.  «  Chase  v.  Company,  5  Lea  (Tenn.),415. 

3  San  Joaquin  v.  Beecher,  101  Cal.  70;  ^  Crissey  v.  Cooke,  67  Kan.  20;  72  Pac. 
35  Pac.  349.  541. 

*  M.  F.  &  N.  Co.  V.  Hall,  121  Mass.  272  ;        ^  p.  q.  T.  R.  Co.  v.  Graliam,  11  Met- 
Raymond  v.  Caton,  24  111.  123;  Lesseps  v.     calf,  1. 
Architects'   Co.,  4  La.  Ann.  316.  ^  Chouteaulns.  Co.  v.  Floyd,  74  Mo.  286. 

&  Enterprise    Ditch  Co.   v.  Moffitt,   58 
48 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  34 

the  statute  expressly  gives  power  to  the  stockholders  to  levy 
assessments  they  may  doubtless  delegate  this  power  to  directors.^ 
Directors,  however,  cannot  lawfully  delegate  such  power  to 
ministerial  officers.^ 

§  32.  Po-wer  to  authorize  Voting  by  Proxy  at  Stockholders' 
Meetings.  —  At  commou  law  the  right  of  stoclcholders  to  vote 
by  proxy  was  not  recognized.  The  right  in  order  to  be  available 
must  be  granted  either  by  statute,  charter,  or  appropriate  by-law.^ 
Voting  by  proxy  is  not  however  per  se  unlawful.*  Therefore  the 
right  may  be  secured  to  stockholders  by  appropriate  by-law  duly 
passed  even  without  a  statute  authorizing  it.^ 

§  33.  Pov^er  to  permit  Cumulative  Voting  at  Election  of  Direc- 
tors. —  The  right  of  cumulative  voting  exists  where  a  stockholder 
has  a  number  of  votes  equal  to  the  number  of  shares  held  by  him 
multiplied  by  the  number  of  directors  to  be  chosen,  and  is  allowed 
to  cast  or  distribute  them  as  he  sees  fit.  The  purpose  thereof  is 
to  secure  minority  representation  on  the  board  of  directors.  To 
authorize  cumulative  voting  the  right  must  be  preserved  either  by 
constitutional,  statutory,  or  charter  provision  or  by  the  passage  of 
a  by-law  looking  to  that  end.^ 

If  the  right  is  conferred  absolutely  by  constitutional  or  statu- 
tory provision,  it  cannot  be  taken  away  by  means  of  a  by-law 
or  resolution  denying  such  right  to  stockholders.'^ 

In  twenty-one  of  the  Commonwealths  the  right  to  cumulate 
votes  is  secured  to  stockholders  either  by  constitutional  enact- 
ment or  by  statutory  provision.^ 

§  34.  Power  to  issue  Stock  as  full  paid  in  Exchange  for  Property 
or  Services.  —  In  the  quaint  wording  of  an  English  case,  "  stock 
must  be  paid  for,  in  the  absence  of  constitutional  or  statutory 
provision  providing  otherwise,  "  in  meal  or  in  malt;"  that  is,  in 
money  or  in  money's  worth.^  Forty  of  the  States  have  enacted 
laws  authorizing  the  payment  of  stock  not  only  in  cash  but  in 

1  Rives  I'.  Company,  .30  Aln.  92.  "  Pierce  v.  Cominonwcaltli,  104  Pa.  St 

2 /«  re   County    Palatine   L.  &  1).  Co.,  1.50;  Scliini.lt   v.   Miuhell,    101   Ky.  .570: 

L.  R.  9  Ch.  f>91.  41  S.  W.  929;  State  v.  Stocklcy,  45  O.  St, 

»  Harvey  v.   Comjiany,   118  N.  C.  693;  304;   13  N.  K.  279;  Stale  v.  (ireer,  78  Mo 

24  S.  E.  489  :  People  v.  Cro.ssley,  69  111.  188;  Raker's  Appeal,  109  Pa.  St.  461. 

195;  McKeer. Company  (la.),  98 N.\V.f.09.  '  Tomlin   r.    Bank,    52   Mo.  App.    4.30: 

*  M.  &  O.  Railroad   Co.  v.  Nicliola.s,  98  Commonwealth;'.  Yetter,  190  Pa.  St.  488; 

Ala.  92  ;  12  Sou.  723.  43  Atl.  220. 

'^  State  V.  Tudor,   5   Day  (Conn.),  329  ;  **  See  Part  III.  Talile  9,  pnf^e  579. 

Commonwealth  r.  Detwiler,    131   Pa.  St.  "  Drummond's  Case,  L.  R.  4  Ch.  772. 
614;   18  Atl.  990. 

4  49 


§  o4   INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

services  or  property.^  Some  of  the  States  —  for  example,  Ala- 
bama and  Virsrinia  —  have  somewhat  elaborate  provisions  on  the 
subject. 

'rinis,  in  Alabama,  stock  may  be  issued  in  exchange  for  all 
such  real  and  personal  proi)erty  as  may  be  necessary  or  conven- 
ient for  the  eHicient  construction,  operation,  and  maintenance  of 
its  works  or  plants,  lines,  shops,  factories,  or  other  buildings,  or 
for  the  conduct  and  management  of  its  business  or  as  its  purposes 
may  require.^ 

In  Virginia  the  new  Incorporation  Act  authorizes  subscriptions 
to  the  capital  stock  to  be  paid  for  in  money,  land,  or  other  prop- 
erty, real  or  personal,  leases,  options,  mines,  minerals,  mineral 
rights,  patent  rights,  rights  of  water  or  easements,  contracts, 
labor,  or  services.^ 

Even  in  those  few  Commonwealths  where  no  statutes  exist 
authorizing  the  payment  of  stock  in  property  or  services,  the 
courts  will  presume  that  corporations  have  inherent  power  to  pur- 
chase property  and  labor  and  pay  for  the  same  in  stock  instead 
of  money,  provided  the  transaction  whereby  the  stock  is  to  be 
issued  in  exchange  for  such  property  or  services  is  made  in  good 
faith  and  no  fraud  is  perpetrated  upon  stockholders  or  creditors.* 

The  statute  to  prohibit  absolutely  the  payment  of  subscriptions 
to  the  capital  stock  in  property  or  services  must  be  clearly  re- 
strictive in  character,^  The  only  effect  apparently  of  the  absence 
in  particular  Coqjmon wealths  of  any  provision,  constitutional  or 
statutory,  authorizing  -the  payment  of  stock  in  property  or  ser- 
yices,  is  to  induce  the  courts  to  adopt  what  is  known  as  the  "  true 
value  rule "  ^  rather  than  the  "  good  faith  rule."  ^  But  in  the 
Commonwealths  referred  to,  the  character  of  the  property,  labor, 
or  services  accepted  in  exchange  for  stock  must  be  strictly 
such  as  the  corporation  under  its  charter  has  the  power  to  ac- 
quire, and  when  property  is  so  taken  it  must  be  fairly  represented 
to  the  corporation  and  for  a  just,  lawful,  and  needed  equivalent 
for  the  money  subscribed.^ 

1  See  Part  III.   Table  10,  page  580.  Smith,  .30  N.  Y.  116  ;  Shannon  i-   Steven- 

2  See  Alabama  Session   Laws,    1903,  p.     son,  17.3  Pa.  St.  419  ;  34  Atl.  218. 

395,  sec.  7,  subdiv.  c.  ^  See  Knox  v.  Company,  86  Ala.  180  ;  5 

2  See  Session  Laws  of  Virginia,   1903,  So  578. 

chap.  270.  ^  See  post,  sec.  104. 

*  Liebke  v.  Knapp,  79  Mo.  22 ;  Beach  v.  ''  See  post,  sec.  105 


K  Liebke  v.  Kna])p,  79  Mo.  22  ;  Powell 


60 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  35 

§  35.  Po'wer  to  dispose  of  Corporate  Assets  as  an  Entirety.  — 
In  ten  of  the  Commonwealths  express  power  is  conferred  upon 
corporations  to  disi)0se  of  their  entire  corporate  assets  by  obtain- 
ing the  consent  of  a  certain  percentage  of  the  stockholders  to  such 
disposition. 1  Much  controversy  has  arisen  as  to  whether  or  not 
express  statutory  power  is  necessary  in  order  to  authorize  transfer 
by  a  corporation  of  the  entire  corporate  assets.  At  common  law 
neither  the  directors  nor  a  majority  of  the  stockholders  had  power 
to  sell  or  otherwise  transfer  ail  of  the  property  of  an  acting  and 
prosperous  corporation  able  to  achieve  the  objects  of  its  creation 
as  against  the  dissent  of  a  single  stockholder.^ 

The  view  is  taken  by  the  New  Jersey  court  in  Coler  v.  Com- 
pany^ that  the  sale  of  the  corporate  assets  as  an  entirety  is  equiv- 
alent to  a  dissolution,  and  therefore  can  only  be  done  through 
the  courts  under  statutory  authority.  Many  courts,  however,  take 
the  view  that  it  can  be  done  where  it  is  not  in  fraud  of  the  rights 
of  creditors  or  in  violation  of  charter  or  statutory  restrictions, 
and  this,  too,  by  a  majority  of  the  stockholders  against  the  dis- 
sent of  a  minority  where  the  exigencies  of  the  business  seem  to 
require  it.*  Thus,  it  has  been  asserted  that  "  it  is  a  well  settled 
rule  that  a  strictly  private  corporation  has  the  same  right  to  dis- 
pose of  its  property  that  an  individual  has,  and  that  when  insol- 
vent or  in  a  failing  condition  it  may  sell  all  thereof  without 
the  consent  of  all  of  the  stockholders.  It  is  the  general  rule, 
however,  that  neither  the  directors  nor  a  majority  of  the 
stockholders  of  a  corporation  have  power  at  common  law  to 
sell  or  otherwise  transfer  all  its  property  while  the  corporation 
is  a  going,  prosperous  concern  against  the  dissent  of  any  share- 
holder." 5 

It  may  be  added  in  this  connection  that  the  right  to  exist  as  a 

V.   Murray,  3  N.   Y.  Aj.p.   Div.  273;    38  Co.  i;.  M.  O.  P.  Co.,  89  Fed.  529  ;  Metcalf 

N.  Y.  Sup.  2.W;  M.   157   N.   Y  717;  .53  v.  A.  S.  F.  Co.,  122  Fed.  115;  Traer  v. 

N.  ?:.  1130;  Kiinhall  v.  Corii|);uiy, 69  N.  H.  Company  (fa.),  99  N.  \V.  290. 
485;  45  Atl.  2.53;    Montgomery  v.  Com-  »  64  N.J.  Kq.  117;  53  All.  680. 

jianv,  48  N.  Y.  App.  Div.    12;   62  N.  Y.  *  TreadwelU-. Company, 7  (iray(i\[ass.), 

Slip".  606;   Id.    168   N.  Y.  657;  61   N.  E,  393;   Martin  r.  Zolleri)ach,  38  Cal.  .300; 

Il.jl.  MiiifTs'  Ditch  Co.  v.  Zcllerhacli,  37  Cal. 

1  See  Part  III.  Talde  9,  page  579.  543  ;  Featliersloiiliiiufrli  r.  Company,  L.  R. 

2  Forrester  r.  Company,  21  Mont.  544;  1  Kq.  318;  BarllioIiMnew  v.  Comj)any,  69 
55  Pac.  229;   Mem,  74  Pac.  1088;    People  Conn.  521  ;  38  Atl.  45. 

r.   Ballard.  134  N.  Y.  269;  32  N.  E.  54;  ^  Traer   v.  Company  (la.),  99  N.  W. 

California   Hank   v.   Kennedy,    167    U.   S.     290. 
362;  4U  L.  E.  198;  B.  &  M.  C.  C.  &  S.  M. 

61        . 


§  36   INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

corporation  is  not  alienable.^  The  sale  of  all  the  corporate  prop- 
erty docs  not  operate  to  dissolve  the  corporation.^ 

^  06.  Power  to  voluntarily  dissolve  the  Corporation  without 
Recourse  to  the  Courts. —  The  dissolution  of  a  corporation  is  a 
peculiar  function  that  rests  primarily  in  the  legislature,  and  is 
conferred  upon  courts  or  upon  the  corporation  itself,  only  by 
explicit  legislative  authority. ^  Stockholders,  in  the  absence  of 
statutory  provision,  cannot  extinguish  the  corporate  charter  or 
dissolve  the  corporation,  nor  can  a  court  of  equity  accomplish  a 
similar  result  at  their  instance.*  In  all  the  States  some  provision 
is  made  for  dissolution  of  corporations.  For  examj)le,  in  Alabama, 
Connecticut,  New  Jersey,  North  Carolina,  Virginia,  and  West 
Virginia  the  incorporators  have  the  right  to  surrender  the  charter 
before  organization.  In  twenty-seven  of  the  Commonwealths 
corporations  may  be  dissolved  under  statutory  authority  without 
recourse  to  the  courts.^ 

The  doctrine  that  dissolution  can  only  be  effected  by  the  joint 
act  of  the  State  and  corporation  is  set  forth  in  a  Massachusetts 
case  as  follows  :^  "  Charters,  are  in  many  respects  compacts  be- 
tween government  and  corporators.  And  as  the  former  cannot 
deprive  the  latter  of  their  franchises  in  violation  of  the  compact, 
so  the  latter  cannot  put  an  end  to  the  compact  without  the  con- 
sent of  the  former.  It  is  equally  obligatory  on  both  parties. 
The  surrender  of  the  charter  can  only  be  made  by  the  formal  act 
of  the  corporation ;  and  will  be  of  no  avail  until  accepted  by  the 
government.  There  must  be  the  same  agreement  of  the  parties 
to  dissolve,  that  there  was  to  form~  the  compact.  It  is  the  accept- 
ance which  gives  efficacy  to  the  surrender.  Dissolution  of  a 
corporation,  it  is  said,  extinguishes  all  its  debts.  The  power  to 
dissolve  itself  by  its  own  act  would  be  a  dangerous  power,  and  one 
which  cannot  be  supposed  to  exist."  "^ 

In  this  connection  it  may  be  observed  that  the  stockholders 

1  Detroit  Citizens'  Street  Ry.  Co.  v.  3  Qijg  ,;,  Company  (Mass.),  70  N.  E. 
Common  Council,  125  Mich.  673  ;  85  N.  .W.     1022. 

96;   Pearce  v.  R.  It.,  21    How,  441  ;    16  *  Benedict  v.   Company,  49  N.J.  Eq. 

L.  E.    184;    State  v.   Company,  40  Kan.  235;  23  Atl.  485. 

96;  19  Pac.  349.  ^  See  Part  III.  Table  8,  page  578. 

2  Miners'  Ditch  Co.  v.  Zellerbach,  37  <'  Boston  Glass  Manufactory  Co.  i\ 
Cal.  543  ;  Sullivan  v.  Company,  39  Cal.  Langdon,  24  Pick.  49. 

459.  ''  See  also   Davis  v.  Company,  87  Ala. 


633;  6   Sou.  140. 


oii 


CHAP.  I.]  DRAFTING    THE    CHARTER.  §  37 

alone  have  power  to  surrender  the  charter.^  It  will  be  re- 
membered, of  course,  that  the  expiration  of  the  time  limited  by 
the  charter  as  a  corporation's  terra  of  existence  is  held  in  most 
jurisdictions  to  result  in  the  dissolution  of  such  a  corporation.^ 
But  neither  insolvency  nor  sale  of  all  of  the  corporate  property, 
nor  cessation  of  business  operates  to  dissolve  the  corporation.^ 

But  in  the  absence  of  any  provision  in  the  charter  limiting  cor- 
porate existence,  the  corporation  is  entitled  to  perpetual  life.'*  If 
the  articles  provide  for  a  longer  period  of  corporate  existence  than 
the  law  allows,  the  excess  is  void.^  In  many  of  the  States  statutes 
exist  providing  that  the  corporation  shall  continue  in  existence 
for  periods  ranging  from  three  to  five  years  after  the  expiration 
of  the  time  limited  for  its  existence  for  the  purpose  of  winding  up 
its  affairs.^ 

A  majority  of  the  States  delegate  to  the  courts  the  power  to 
dissolve  the  corporation  on  application  of  stockholders  or  credi- 
tors." The  fact  that  certain  States  make  the  directors  trustees 
for  creditors  on  dissolution  does  not  necessarily  take  away  the 
jurisdiction  of  courts  of  equity  to  appoint  a  receiver.^  Many 
States  have  statutes  providing  that  upon  the  expiration  of  the  time 
limited  by  their  charter  as  the  duration  of  their  corporate  exist- 
ence, they  shall  nevertheless  be  continued  for  a  certain  period  of 
time  in  order  to  permit  of  the  winding  up  of  the  corporate  affairs. 
Without  such  statutory  provisions  suits  cannot  be  maintained 
against  the  corporation  after  such  period  has  expired.^ 

S  oT.  Power  to  insert  in  the  Charter  Provisions  for  the  Regula- 
tion of  the  Internal  Affairs  of  the  Corporation.  —  The  incorpora- 
tion acts  of  eighteen  of  the  States  contain  provisions  relative 
to  the  contents  of  certificates  of  incorporation,  authorizing  the 
insertion  therein  of  provisions  for  the  regulation  of  the  business 
of  the  corporation,  or  for  the  puri)Ose  of  defining  or  limiting  the 
powers  of  the  corporation,  its  ofiicers,  directors,  and  stockholders.^'^ 

1  Jones  y.  Bank,  10  Col.  464;  17  Pac.  also  Foster  f.  I?atik,  Ifi  Mass.  24. "J ;  Nash- 
272  ;  Hartori  v.  Associatiou,  114  Iml.  220  ;  ville  Hank  v.  rotway,  :i  llnin.  (Tenn.)  522. 
10  N.  K.  480.  '  ^^^  .Minor  i'.  Coui])any,  93  Mich.  97  ; 

2  .Miuson  V.  Company,  25  Fed.  882.  .53  N.  W.  218  ;  Wlieeler  /;.  Company,  143 

3  Davis  V.  Con.],anv,87  Ala.  033  ;  6  So.  111.  197  ;  32  N.  K.  420. 

140.                                 "  8  City  Pottery  Co.  (;.  Yates,  37  N.  J. 

*  V.  L.  S.  Co.  V.  Clowes,  3  N.  Y.  470.  Eq.  543. 

5  I'eoplo  V.  Chceseman,  7  Col.  376 ;  3  »  Nelson  v.  Hubbanl,  96  Ala.  238 ;  1 1 
I'ac.  716.  Son.  428. 

6  Sec  Part  III.  Talile  17,  page  587  ;  see  i^  See  Part  III.  Tahlc  10,  i)ago  580. 

53 


^  ;>7    INCORPORATION    AND    OUGANIZATION    OF   CORPORATIONS.    [PART  I. 

Unless  tlie  law  expressly  pcnuits  the  insertion  of  such  provisions 
in  the  certificate  of  incorporation,  State  ollicials  are  jusiided  in 
refusins^  to  accept  and  file  ccrtilicatcs  containing  snch  provisions. 
This  generally  on  the  ground  that  in  the  absence  of  statutory 
provision  so  authorizing,  they  arc  properly  the  subject  of  by-laws 
and  not  proper  for  insertion  in  the  certificate  of  incorporation.^ 

Leaving  out  of  consideration  the  fact  of  acceptance  by  State 
officials,  and    approval   by  them  of  certificates  of  incorporation 
containing  such  provisions  as  are  here  referred  to,  when  there  is  no 
statute  authorizing  the  same,  the  following  may  be  said:  The 
jreneral  test  as  to  whether  provisions  not  called  for  by  the  statutes 
are  valid  when  inserted  in  certificates  of  incorporation  must  be 
determined  from  their  character.     If  they  are  not  powers,  but  are 
merely  in  the  nature  of  by-laws,  they  are  invalid  as  not  being 
called  for  by  the  statute.     If  they  are  powers,  but  not  authorized 
by  statute,  to  permit  such  insertion  in  the  certificate  of  incorpora- 
tion would  be  equivalent  to  saying  that  the  legislature  had  clothed 
the  incorporators  with  a  number  of  their  legislative  functions.^ 
On  this  general  subject  the  opinion  of  the  Supreme  Court  of  Ala- 
bama in  a  leading  case  in  that  State  is  instructive :  "  It  is  appar- 
ent," observes  the  court,  "  that  the  creation  of  corporations  under 
general  law  rather  than  by  special  act  was  not  intended  to  work 
any  essential  change  in  their  nature  and   character.     Whether 
deriving  existence  from  a  special  law,  or  from  incorporation  under 
the  general  law,  the  corporation  is  an  artificial  being  of  legisla- 
tive creation,  having   no  other  powers  or  properties  than  such 
as  the  law  confers,  or  which  may  be  incidental  to  their  very  ex- 
istence.    The  mode  of  incorporation  the  statutes  have  carefully 
prescribed.     The  persons  proposing  to  be  incorporated  must  file 
and  cause  to  be  recorded  in  a  designated  public  office  a  declaration 
in  writing,  stating  the  name  of  the  corporation,  the  objects  for 
which  it  is  formed,  the  amount  of  the  capital  stock,  the  number 
of  shares  into  which  it  is  divided,  the  names  of  the  stockholders, 
and  the  number  of  shares  each  may  hold.     The  office  and  the 
effect  of  the  declaration  the  statutes  do  not  leave  in  doubt  — 

1  Zn  re  Application  for  charter,  10  Phil.  N.   Y.    546;    G.   L.   D.   Co.    v.    Perkins 

Rep.  130;  Van  Pelt  v.  Gardner,  .54  Neh.  (Texas),  26  S.  W.  2.56;  Alhright  v.  Asso- 

701;  75  N.  W.  874;  Bent  y.  Underdown,  60  ciation,  102  Pa.  St.  411;  Shouii  y.  Arin- 

N.  E.  .307  ;  156  Ind.  516  ;  Heck  v.  McEwcn,  strong  (Tenn.),  59  S.  W.  790. 

12  Lea,  97;  T.  A.  L.  Co.  v.  Ma.ssey,  56  2  People  ex  rel.  v.  C.  G.  T.  Co.,  130  111. 

S.   W.  35;  E.  P.  R.  Co.  v.  Vaughan,  14  268;  22  N.  E.  798. 

54 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  38 

when  recorded,  the  persons  signing  it  and  their  successors  become 
a  body  corporate  by  the  name  stated  therein  and  with  the  powers 
conferred  by  law.  It  is  an  acceptance  by  the  corporation,  under 
the  name  designated,  for  the  objects  expressed,  of  the  corporate 
powers  and  capacity  the  law  confers,  and  a  statement  of  the  prin- 
cipal constituents  of  the  corporation, —  the  amount  of  the  capital 
stock,  the  names  of  the  stockholders,  and  the  quantity  of  interest 
each  has  in  the  capital  stock.  There  is  no  authority  of  law  for 
introducing  more  into  it,  and  if  more  be  introduced,  it  is  mere 
surplusage,  not  adding  to  or  detracting  from  the  force  of  the 
declaration.  A  controlling  purpose,  as  we  suppose,  in  authorizing 
or  in  compelling  the  creation  of  corporations  under  general  laws, 
is  to  secure  uniformity  and  equality  of  corporate  powers,  func- 
tions, and  privileges ;  that  all  corporations  of  the  same  class, 
formed  for  like  purposes,  should  possess  the  same  capacities 
and  properties,  and  exercise  and  enjoy  the  same  franchises  and 
privileges.  Unless  it  was  intended  to  work  a  radical  change  in 
the  nature  and  character  of  these  artificial  beings,  the  mere  crea- 
tures of  the  law,  and  to  subvert  the  whole  theory  which  has  pre- 
vailed in  reference  to  them,  it  cannot  have  been  contemplated 
that  they  should  for  themselves  create  powers  and  privileges  by 
declaration  or  reservation,  whether  the  declaration  or  reservation 
is  expressed  in  the  articles  of  incorporation  or  in  the  by-laws 
ordered  by  the  corporators  for  their  government.  Such  declara- 
tions or  reservations  would  soon  become  more  liberal  and  diverse 
than  was  the  liberality  and  diversity  of  the  grants  of  corporate 
powers  by  special,  legislative  enactment,  the  evil  it  was  intended 
to  remove.  Of  every  corporation  formed  under  the  general  law, 
the  law  itself  becomes  the  charter,  defines  and  enumerates  the 
powers  which  are  to  be  exercised,  the  nature  and  extent  of  cor- 
])()rate  francliises  and  privileges.  The  declaration  of  incorpora- 
tion, the  by-laws  adopted  for  corporate  government,  do  not  form 
the  charter,  or  define  or  enumerate  the  corporate  powers.  These 
are  the  acts  of  the  corporators.  The  charter  is  the  grant  from 
the  sovereign  power  of  the  State,  and  by  that  source  only  can  be 
varied  or  enlarged."  ^ 

§  38.  Power  to  authorize  Directors  to  adopt  By-Laws.  —  In  a 
number  of  the  States  statutes  exist  autliorizing  the  directors  to 
adopt  by-laws  under  certain  conditions.     The  conditions  here  re- 

1  G.  L.  &  11.  IiiH.  Co,  r.  Katni.iT,  7.T  Ala.  .325. 

55 


§  40    INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS.    [PART  I. 

forrod  to  arc  usually  cither  that  the  rij^lit  referred  to  should  he 
expressly  iuserted  in  the  certificate  of  incorporation,  or,  in  lieu 
thoroof,  (hat  the  stockholdera  expressly  delegate  this  power  to 
the  directors.!  Unless  the  statute  or  charter  provides  otherwise, 
the  hy-laws  must  be  adopted  by  the  stockholders.^  However, 
where  the  right  to  adopt  by-laws  is  expressly  limited  to  the  direc- 
tors, it  is  exclusive. 

§  39.  Power  to  authorize  Appointment  of  Executive  Committee 
from  the  Board  of  Directors.  —  In  Connecticut,  Delaware,  Massa- 
chusetts, Nevada,  New  Jersey,  Virginia,  and  West  Virginia  stat- 
utes exist  expressly  authorizing  directors  to  ai)point  an  executive 
committee  from  their  own  number  to  whom  may  be  delegated,  to 
such  extent  as  shall  be  provided  in  the  by-laws,  any  of  the  powers 
of  the  board  of  directors.  There  has  as  yet  been  no  fair  test  in 
the  courts  as  to  the  validity  of  such  statutes  where  an  attempt  has 
been  made  by  the  directors  to  practically  delegate  all  their  powers  to 
an  executive  committee.  A  reasonable  view  of  the  matter  would 
seem  to  be  that  where  the  statute  clearly  conveys  such  power  it  is 
valid  when  exercised  by  an  executive  committee  duly  appointed 
from  the  full  board  of  directors  pursuant  to  the  statute  in  such 
case  made  and  provided.^ 

The  power  of  the  board  of  directors  is  not  a  delegated  authority, 
and  when  the  transaction  of  the  business  of  the  company  will  be 
facilitated  by  the  appointment  of  an  executive  committee  such 
appointment  may  unquestionably  be  made.* 

§  40.  Power  to  enlarge  or  diminish  Corporate  Powers.  — The  right 
here  referred  to  becomes  one  of  importance  only  in  those  States 
wherein  it  is  permitted  to  insert  specific  corporate  powers  in  the 
articles  of  incorporation.  The  powers  here  referred  to  are  such, 
for  example,  as  the  right  of  the  corporation  to  acquire  its  own 
stock  ;  to  hold  stock  and  bonds  in  other  corporations ;  to  delegate 
to  directors  power  to  adopt  by-laws,  etc.  It  will  be  found  that 
Avhercvcr  such  a  right  exists  the  power  to  amend  will  be  found 
sufficiently  broad  to  permit  of  the  enlargement  or  diminishing  of 

1  See  Part  III.  Table  12,  page  582.  28  N.  E.    467;  Black,  etc.  Co.   v.  Hol- 

2  See   Norton,  etc.  Co.  v.  Wysong,  .51  way,  85  Wis.  .344;  55  N.  W.  418  ;  Andres 
Ind.    4;   Salem  Bank   v.  Bank,  17  Mass.  v.  Fry,  113  Cal.  124;  45  Pac.  534;  Rank 
1  ;  Watson  u.  Company,  56  Mo.  App.  145;  v.  Walton  Iron  Co.,  30  Bull.  (Ohio)  382. 
State  V.  Curtis,  9  Nev.  325.  *  Leavitt  v.  Company,  3  Utah,  265  ;  1 

8  S.  E.  L.  Co.  V.  Bank,  127  N.  Y.  517  ;    Pac.  356. 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  43 

corporate  powers  by  complying  with  the  terms  of  the  statute 
relative  to  such  amendments.  ^ 

§  41.  Power  to  change  Par  Value  of  Shares.  —  Where  the  charter 
fixes  tlie  number  and  par  vahie  thereof,  a  corporation  cannot  in- 
crease or  diminish  the  par  value  of  its  shares  without  legislative 
sanction.2  If  however  the  certificate  of  incorporation  says  nothing 
as  to  the  number  and  par  value  of  shares,  they  may  doubtless  be 
changed  by  the  stockholders  of  the  corporation  without  legislative 
sanction.^ 

The  legal  effect  of  a  change  in  the  number  of  shares  without 
any  corresponding  increase  or  decrease  in  the  par  value  thereof, 
is  to  increase  or  decrease  the  capital  stock,  and  this  can  only  be 
done  by  permission  of  the  legislature.* 

In  thirty-six  of  the  States  the  par  value  of  the  capital  stock  may 
be  any  amount,  while  in  the  remainder  such  par  value  is  limited 
from  amounts  ranging  from  one  dollar  to  one  hundred  dollars  per 
share.^  In  some  few  of  the  States  it  will  be  noted  that  the  pro- 
visions of  the  statutes  limiting  amendments  fail  to  authorize 
cliangcs  in  the  par  value  of  the  shares  of  capital  stock.^ 

§  42.  Power  of  Bondholders  to  vote  at  Election  of  Directors.  — 
Very  few  of  the  States  have  enacted  statutes  giving  to  bondholders 
the  riglit  to  participate  in  the  election  of  directors.  Virginia 
and  Delaware  are  the  exceptions  to  the  general  rule.  Most  of  the 
States  provide  that  the  board  of  directors  shall  be  elected  by 
the  stockholders,  and  thus  by  implication  forbid  the  giving  of  the 
right  to  bondholders  to  vote  at  such  election.^  However,  if  neither 
by  constitutional  or  statutory  provision  bondholders  are  barred 
from  participating  in  tiie  election  of  directors,  such  right  may  be 
bestowed  upon  them  either  by  provision  therefor  in  the  charter  or 
by  j)roper  by-law  duly  adopted.^ 

§  43.  Power  to  classify  Directors.  —  Ordinarily  the  tenure  of  di- 
rectors is  fixed  l)y  statute,  and  where  so  fixed  these  provisions  arc  of 
course  controlling.     If  the  statute  requires  directors  to  be  elected 

1  Peoria,  etc.  Co.  v.  Preston,  3.5  la.  »  S.  &  K.  Ry.Co.  v.  Cu8l)ing.4.5  Mc.534. 
115;  P.,  etc.  P.  R.  Co.  v.  Griffin,  21  Barb.  ••  Druitwich  Patent  Salt  Co.  v.  Curzou, 
454  ;  Pac.  U.  Co.  v.  IIuglie»,  22  Mo.  291.  L.  R.  3  Kx.  35. 

2  Droitwicti  Patent  Salt  Co.  r.  Ciirzon,  ^  See  Part  III.  Table  4,  page  565. 
L.  R.  3  Kx.  35  ;  'IVliumi  v.  liills,  6  Kan.  "  See  Part  III.  Table  14,  page  575. 
App.  .549;  51    Pac.  610;  S.  M.  D.  Cor.  v.  ''  Diirkee  n.   People,   155   111.  354;   40 
Ropes,  6  Pick.  (Mass  )  23.  N.  E.  626. 

B  State  V.  McDanicl,  22  O.  St.  354. 

57 


§   10    INCOltPOUATIOX    AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

anmmllv,  this  by  implication  j)roliibits  the  classification  of  direc- 
tors for  terms  in  excess  of  tlie  statutory  limit.^  In  a  large  num- 
ber of  the  States  statutes  exist  expressly  authorizing  classification 
of  directors.^ 

If  the  statute  docs  not  require  annual  election  of  directors,  there 
would  ap{)ear  to  be  nothing  illegal  in  a  corporation's  classifying  its 
directors  in  any  manner  it  sees  fit  so  to  do,  provided  (in  the  ab- 
sence of  statutory  regulations)  directors  hold  their  office  at  the 
pleasure  of  the  corporation, 

§  44.  Power  to  amend  Articles  before  Organization.  —  As 
has  already  been  seen,  the  power  to  amend,  if  it  exists  at  all, 
must  be  derived  from  the  legislature.  Very  few  of  the  Common- 
wealths have  granted  to  incorporators  the  right  to  amend  articles 
of  incorporation  before  organization.  Statutes,  however,  to  that 
effect  exist  in  Alabama,  Connecticut,  New  York,  New  Jersey, 
North  Carohna,  and  Virginia. 

§  45.  Power  to  surrender  Charter  before  Organization.  —  It  is 
often  an  advantage  to  a  corporation  which  does  not  care  to  avail 
itself  of  the  right  to  actively  engage  in  business,  to  surrender  its 
charter  to  the  State  before  organization,  without  going  through 
the  expensive  and  usually  complicated  proceedings  incident  to 
dissolution.  Such  right  is  expressly  given  in  Connecticut,  New 
Jersey,  North  Carolina,  Virginia,  and  West  Virginia.^ 

§  40.  Power  given  to  Minority  Stockholders  to  compel  Purchase 
of   their  Holdings  upon  Consolidation.  —  In  the  States  of  Alabama, 

Connecticut,  Massachusetts,  Delaware,  and  New  York  statutory 
protection  is  afforded  to  minority  stockholders  in  case  the  cor- 
poration has  consolidated  with  another.  The  Connecticut  statute 
may  be  briefly  summarized  as  an  example  of  such  statutes,* 

The  act  provides  that  any  stockholder  in  any  corporation  con- 
solidating, who  at  the  time  of  such  consolidation  objects  thereto 
in  writing,  may,  within  ten  days  after  the  agreement  of  consolida- 
tion has  been  filed  for  record  in  the  office  of  the  Secretary  of 
State,  demand  in  writing  from  the  consolidated  corporation  pay- 
ment of  his  stock ;  and  such  corporation  shall  within  three 
months  thereafter  pay  him  the  value  of  his  stock  at  the  date  of 

1  State  V.  McCullough,  3  Nev.  202.  428 ;  Law  v.  Rich,  47  W.  Va.  634  ;  35  .S.  E. 

2  See  Part  III.  Table  14,  page  .584.  8.58. 

8  Mumma  v.  Company,  8  Pet.   U.  S.  *  Sec.   79,   chap.    194,   of  the   Session 

281 ;  Taylor  v.  Holmes,  14  Fed.  Kep.  498;     Laws  of  190.3, 
Houston  V.  .Jefferson  College,  63  Pa.  St. 

58 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  47 

such  consolidation.  In  case  of  disagreement  as  to  the  vaUie 
thereof,  sucli  value  shall  be  ascertained  by  three  disinterested 
persons,  to  be  chosen,  one  by  the  stockholder,  one  by  the  directors 
of  the  consolidated  corporation,  and  the  third  by  the  two  thus 
selected ;  and  in  case  their  award  is  not  paid  within  thirty  days 
from  this  date  it  shall  become  a  debt  of  said  consolidated  corpora- 
tion and  may  be  collected  as  such.  Upon  receiving  payment  of 
the  amount  awarded,  such  stockholder  shall  transfer  his  stock  to 
the  consolidated  corporation,  which  shall  dispose  of  it  on  the  best 
terms  attainable. ^ 

§  47.  Incidental  Powers,  Definition  and  Enumeration  of.  —  An 
incidental  power  is  one  that  is  directly  necessary  or  proper  to  the 
execution  of  an  exj)ress  power,  and  not  one  that  has  a  slight  or 
remote  relation  to  it.^  The  term  expresses  those  powers  which 
flow  necessarily  out  of  the  exercise  of  the  express  powers  con- 
ferred by  statute  or  by  charter.^ 

The  exercise  of  a  power  that  might  be  beneficial  to  the  prin- 
cipal business  of  the  corporation  is  not  necessarily  incident  to  it.^ 
The  principal  incidental  powers  may  be  enumerated  as  follows : 
(1)  power  to  make  contracts ;  (2)  power  to  borrow  money  ;  (3) 
power  to  give  and  accept  customary  evidences  of  debt ;  (4)  power 
to  mortgage  or  pledge  real  and  personal  property ;  (5)  power 
of  amotion. 

The  implied  powers  which  a  corporation  has  in  order  to  carry 
into  effect  those  expressly  granted,  and  to  accomplish  the  pur- 
I)Oses  of  its  creation,  are  not  limited  to  such  as  are  indispensable 
for  these  purposes,  but  comprise  all  that  are  necessary  in  the 
sense  of  appropriate,  convenient,  and  suitable,  including  the  right 
of  reasonable  choice  of  means  to  be  employed.  Acts  of  a  cor- 
poration which  if  standing  alone  or  engaged  in  as  a  business 
would  be  beyond  its  implied  powers,  are  not  necessarily  ultra  vires 
when  they  are  incidental  to  or  form  part  of  an  entire  transaction 
which  in  its  general  scope,  is  within  the  corporate  purpose.  The 
validity  of  such  a  transaction  is  to  be  determined  from  its  general 

1  iSee  Lanman  v.  Company,  30  Pa.  St.  798;  People  v.  Company,  175  111.  12.")  ;  .51 

42;  Mowrey  y.    Company,    17  Pcd.  Cas.  N.  E.  664. 

No.  9891;   4  IJinsell,  78*;  Pitt.sluirg,  etc.  '  See  U.  M.   Co.  v.   B.ink.  2  Col.   248; 

Ry.  Co.  I'.  Garrett,  50  (^.  St.  405  ;  .34  N.  E.  Wright  c.  IIughcH,  119  Ind.  324;  21  N.  E. 

493.  907. 

"^  Hood  /•.   Company,   42    Conn.    112;  *  Nicollet  Nat.  Rank  v.  Company,  71 

People  V.  Company,  1.30  111.  268  ;  22  N.  E.  Minn.  413  ;  74  N.  W.  160. 

59 


§  52    INCOUrORATION    AND   ORGANIZATION    OF   CORPORATIONS.    [PART  T. 

character  considered  as  a  whole  rather  than  hy  segregation  into 
individual  |iarts  and  each  regarded  as  distinct  from  the  otlier.^ 

§  48.  Power  to  make  Contracts,  —  A  corporation  is  a  creature 
of  law,  and  may  do  any  act  or  thing  under  contract  the  same  as 
natural  persons  might  do,  subject  to  the  rights  conferred  on  it  by 
the  law  of  its  creation  or  by  its  charter. ^  Where  chartered  in 
one  State  for  any  purpose,  it  may  lawfully  make  a  contract  in 
furtherance  of  that  purpose  in  any  other  State  where  not  pro- 
hibited by  the  laws  thereof.^ 

§  49.  Power  to  borrow  Money.  —  The  power  to  borrow  money 
in  carrying  out  the  purposes  of  the  corporation's  organization  is 
one  of  the  incidental  corporate  powers.*  In  this  connection  it 
may  be  said  that  the  power  to  borrow  money  has  been  held  to 
imply  the  power  to  issue  bonds.^  However  that  may  be,  in  addi- 
tion to  an  enumeration  in  the  statute  of  the  power  to  borrow 
money,  a  majority  of  the  business  corporation  acts  expressly 
confer  the  right  upon  corporations  to  issue  bonds.^ 

§  50.  Power  to  give  and  accept  Customary  Evidences  of  Debt.  — 
This  incidental  power  includes  the  right  of  corporations  to  make 
notes  or  bills  of  exchange,  to  accept  drafts  and  notes,  and  to  draw 
checks.'^ 

§  51.  Power  to  mortgage  and  pledge  Real  and  Personal  Property 
—  Every  corporation  has  the  incidental  power  to  mortgage  and 
pledge  its  real  and  personal  property  in  order  to  procure  and 
secure  necessary  loans  to  be  made  to  the  corporation,^  It  is 
sometimes  said  that  a  corporation  has  power  to  pledge  both  its 
issued  and  unissued  shares.^ 

§  52,  Power  of  Amotion.  —  The  power  of  amotion  has  refer- 
ence to  the  removal  of  officers  and  directors.     The  term  "  dis- 

1  C.  0.  X.  G.  F.  Co.  V.  Company,  60  «  gee  Part  III.  Table  14,  p.  584. 
Ohio, 96;  53  N.  E.  711;  Porter w.  Company  ''  Moss  v.  Averell,  10  N.  Y,  449  ;  Lucas 
(Mont.),  74  Pac.  938.  v.  Pitney,  27  N.  J.  Law,  221  ;  Smead  v. 

2  Hand  ^•.  Company,  143  Pa.  St.  408;  Company,  11  Ind.  104;  Strauss  y.  Com- 
22  Atl.  709 ;  People  r."  Company,  70  N.  Y.  pany,  52  O.  St,  59;  Morris  v.  Cheney,  51 
569  ;  MacGinniss  v.  Company  (Mont.),  75  111.  451. 

Pac.  89.  ^  State  v.  Company,  61    Kan.  547  ;   60 

3  Hall  V.  Company,  91  Ala.  363  ;  8  Pac.  337 ;  Farmers'  Bank  v.  Company, 
Sou.  348.  "  108  Ky.  447  ;  56  S.  W.  719  ;  Savings  Trust 

*  See   Ward  v.  Johnson,  95  111.  215;  Co.  v.  Company,  112  Fed.  693. 
Wright  V.  Hughes,  119  Ind.  324;  21  N.  E,         ^  See  U.   Savings  Ass'n   v.  Seligmau, 

907.  92  Mo.  635  ;    15    S.  W.    630 ;  Burgess  v. 

5  Commonwealth  v.   Smith,  10   Allen  Seligman,   107  U.  S.  20;  2  S.  Ct.  10. 
(Mass.),  448;  Smith  v.  Law,  21  N.  Y.  296. 

60 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  53 

fraiichisemeiit "  has  reference  solely  to  the  deprivation  of  the 
right  to  vote  as  against  stockholders.^  The  right  is  delegated  by 
statute  to  the  stockholders  in  fifteen  of  the  Commonwealths.^  In 
the  absence  of  such  statute  there  is  no  power  in  the  stockholders 
to  remove  directors  before  the  expiration  of  their  allotted  terras, 
except  for  cause,  provided  such  terms  are  fixed  by  statute.^  ^ 

It  seems  to  have  been  the  rule  of  the  common  law  that  every 
corporation  had  an  implied  power  to  remove  directors  for  cause 
when  their  terms  of  office  were  not  prescribed  by  statute.^  In 
New  York  it  has  been  held  that  the  power  to  remove  directors 
may  be  covered  by  by-law.^ 

The  main  grounds  which  justify  amotion  where  no  statute 
exists  limiting  the  same,  are  the  conviction  of  crime  on  the  part  of 
directors,  misconduct  in  office,  and  violation  of  statutory  provi- 
sions.^ If  the  charter  or  statute  provides  steps  which  must  be 
taken  to  remove  directors,  such  statute  must  be  strictly  followed.^ 
In  the  exercise  of  this  power  the  stockholders  meet,  charges  must 
be  preferred,  and  the  director  removed  by  a  majority  vote.^ 
Equity  will  not  interfere  in  such  matters  in  the  absence  of  usurpa- 
tion or  gross  negligence.^ 

§53.  The  Modern  Doctrine  of  Ultra  Vires. — To  define  in  a 
general  way  the  ancient  doctrine  of  ultra  vires  is  to  say  that  a 
contract  of  a  corporation  which  is  unauthorized  by  or  in  violation 
of  its  charter,  or  entirely  outside  of  the  scope  of  the  express 
purposes  of  its  creation  or  beyond  the  powers  granted  to  it  by  the 
charter  or  by  statute,  is  void  in  the  sense  of  being  no  contract  at 
all,  because  of  a  total  want  of  power  to  enter  into  it;  that  such 
contract  will  not  be  enforced  by  any  species  of  action  in  a  court  of 
justice  ;  that  being  void  ah  initio^  it  cannot  be  made  good  by 
ratification  or  by  any  succession  of  renewals,  and  that  no  ])erform- 
ance  on  either  side  can  give  validity  to  the  unlawful  contract,  or 
form  a  foundation  of  any  right  of  action  upon  it.^^ 

1  White  V.  Brownoll,  4  Alib.  I'r.  n.  8.  »  Rox  c.  Taylor,  3  Salk.  231  ;  R.  K.  G. 
If'-'-  V.  Smith,  10  Wood,  74  ;   DoLacey  v.  C'oin- 

2  See  Part  III.  Talile  9,  page  579.  jiany,   1    Hawks  (N.  C),  274;    I'uniy  v. 

3  Nathau    v.  Tompkins,  82   Ala.  437;  Ass'n  (Mo.  Ap.),  74  R.  W.  480. 

2  So.  747.  »  Baker  v.  Backii.H,  32  111.  79 ;  Park  ». 

*  Fawcette  »;.  Charle.s,  13  Weii(1.473.        Grant    Locomotive   Works,  40  N.  J.    Va\. 
6  Donnjlass  I'.  Company,  118  N.  Y.  484;     114;  19  Atl.  62;    LI.  45    N.   .1.    Eq.  241, 

23  N.  E.806.  362;  3  Atl.  162. 

*  Rex  V.  Richardson,  1  Burr.  517.  i*^  Sec  Thompson  on  Corporations,  v<j1. 
^  State  V.  Trustees,  etc.,  5  Ind.  77.             v.  §  5968;  for  liistory  of  doctrine  of  ultra 

Gl 


§  r)3   INCOnrORATION   AND    ORGANIZATION    OF   CORPORATIONS.    [PART  I. 

The  necessities  of  modern  business  and  the  arrival  by  the  courts 
at  a  better  concei)tion  of  the  true  relations  governing  the  matter, 
have  brought  about  radical  changes  in  the  doctrine  as  liere 
stated.  What  we  propose  to  do  in  this  connection  is  to  set  forth 
what  may  be  termed  "the  modern  doctrine  of  ultra  vlres.''^  Pre- 
liminary to  this  a  statement  should  be  made  showing  how  the 
doctrine  of  ultra  vires  originated,  and  how  it  came  to  be  applied 
from  time  to  time. 

In  the  early  days  corporations  were  created  mainly  for  public 
purposes,  and  it  was  in  connection  with  quasi-public  corporations 
that  the  doctrine  of  ultra  vires  first  originated.  In  view  of  this 
fact,  as  has  been  well  stated,  there  was  no  reason  why  the  doc- 
trine should  ever  have  been  applied  to  private  corporations  not 
formed  for  public  purposes.^ 

The  grounds  of  the  old  doctrine  are  stated  by  Judge  Gray  as 
follows :  2  "  That  the  charter  of  a  corporation  which  contains  its 
grant  of  powers  is  a  public  statute,  which  all  persons  are  bound 
to  take  notice  of  and  be  governed  by  ;  that  the  restraints  thereby 
established  on  the  alienation  of  the  franchises  of  the  property  of 
the  corporation  are  founded  on  considerations  of  public  policy, 
which  neither  the  corporation  nor  any  other  persons  can  be 
allowed  to  evade  or  disregard."  In  a  later  case,  when  sitting 
on  the  United  States  Supreme  Court  bench,  the  same  judge  ob- 
served :  ^  "  Tiie  reason  a  corporation  is  not  liable  on  a  contract 
ultra  vires  are  the  interests  of  the  public  that  the  corporation 
shall  not  transcend  the  powers  granted ;  the  interests  of  the 
stockholders  that  the  capital  stock  shall  not  be  subjected  to  the 
risk  of  enterprises  not  contemplated  by  the  charter,  and  therefore 
not  authorized  by  tlie  stockholders  in  subscribing  for  the  stock  ; 
the  obligation  of  every  one  entering  into  a  contract  with  a  corpora- 
tion to  take  notice  of  the  legal  limits  of  its  powers." 

Turning  now  to  this  statement,  attention  should  be  called  to 
those  reasons  which  have  aided  a  great  majority  of  the  courts  in 
evolving  a  new  doctrine  of  ultra  vires  better  suited  to  the  condi- 
tions of  the  present  time.  In  the  first  place,  except  in  the  case 
of  what   is   known   as   "  quasi-public-private   corporations,"    the 

ivVf-s  see  B.  G.  L.  Co.  v.  Claffy,  151  N.  Y.  2  Richardson  v.  Sibley,  1 1  Allen,  65. 

24;  45  X.  E.  390.  ^  Pittsburgh,  etc.  Co.  v.  Keokuk,  etc. 

1  See  Heiinesey  v.  Muhleman,  40  N.  Y.  Bridge  Co.,  131  U.  S.  37 ;  9  S.  Ct.  770. 
Ap.  Div.  175;  57  N.  Y.  S.  8.54. 

02 


CHAP.  I.]  DRAFTING   THE   CHARTER,  §  53 

public  has  no  direct  interest  whatever  in  the  nature  of  the  powers 
vested  in  them.  Corporations  are  no  longer  created  by  special 
act,  except  in  a  few  cases,  and  it  would  be  a  poor  rule  which 
would  require  a  stranger  to  take  notice  of  the  contents  of  char- 
ters not  public  and  difficult  to  obtain.  In  modern  times  the 
placing  in  articles  of  incorporation  of  a  large  number  of  purposes, 
in  some  cases  giving  the  corporation  almost  unlimited  scope  along 
business  lines,  has  practically  removed  the  objections  spoken  of 
above,  to  the  effect  that  capital  shall  not  be  subjected  to  the  risk 
of  enterprises  not  contemplated  by  the  charter. 

Turning  now  to  the  changes  already  referred  to,  as  having  taken 
place  in  the  doctrine  of  ultra  vires,  they  may  be  stated  in  the 
form  of  the  following  propositions :  (1)  "  The  claim  that  a  con- 
tract is  void,  because  under  the  charter  beyond  the  power  of  a 
corporation  is  seldom  recognized  as  a  defence  to  an  agreement 
otherwise  objectionable,  and  never  where  it  would  defeat  the  ends 
of  justice  or  become  a  shield  against  wrong ;  "  ^  (2)  the  doctrine  of 
ultra  vires  is  not  usually  applied  where  the  party  setting  it  up  has 
received  a  benefit  from  the  unlawful  act  relied  upon  as  a  defence  ;2 
(3)  where  the  most  that  can  be  said  of  a  corporate  act  is  that  it 
is  an  abuse  of  power,  the  State  alone  can  act;^  (4)  the  doctrine 
that  persons  dealing  with  corporations  are  bound  to  take  notice  of 
their  power  is  now  practically  done  away  wdth  by  the  application 
of  the  doctrine  of  estoppel  in  the  case  of  completed  contracts. 

Again,  it  should  be  carefully  noted  that  by  the  fullest  applica- 
tion of  the  doctrine  of  estoppel  where  attempts  have  been  made  to 
set  aside  contracts  on  the  ground  that  they  were  ultra  vires  of  the 
corporate  powers,  the  courts  have  practically  revolutionized  the 
doctrine  as  it  once  existed  in  this  country.  The  doctrine  of  es- 
toppel here  referred  to  is  of  the  character  referred  to  by  Lord 
Denman  in  Pickard  v.  Sears,*  wliere  he  says  that  where  one  by 
his  words  or  conduct  wilfully  causes  another  to  believe  in  the  ex- 
istence of  a  certain  state  of  things,  and  induces  iiini  to  act  on  that 
belief  so  as  to  alter  his  own  previous  position,  the  former  is  pre- 
cluded from  averring  against  the  latter  a  different  state  of  things 
as  existing  at  the  same  time.     By  an  extended  aj)|)lication  of  the 

1  Int.  Trust  Co.  v.  Company,  70  N.  II.  "  Kectnr  v.  Hartford  Deposit  Co.,  190 
118;   40  All.    10.54;    B.  U.  V."  O.  Co.   v.     111.  3ho;  60  N.  K.  528. 

Uauley,  1.5  rtah,  506;  50  Pa.  St.  fill.  *  6  Ad.  &  El.  469. 

2  Norton  V.  Hank,  61  N.  H  589  ;  Smith 
V.  Bank,  12  N.  II.  4. 

63 


§  53    IXCORIMRATION    AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

doctrine  laid  down  by  Lord  Dcnniaii,  the  courts  hold  that  where 
there  has  been  no  express  violation  of  the  law  the  corporation  is 
estopped  by  its  own  contract  or  conduct  from  setting  uj),  as  a  de- 
fence to  an  action  to  enforce  such  contract,  that  it  was  not  in  the 
power  of  the  corporation  to  make  it.  So  too  the  courts  hold  that 
where  a  private  corporation  enters  into  a  contract  in  excess  of  its 
granted  powers  and  has  received  the  benefits  of  the  contract  which 
the  other  parties  acted  upon,  the  corporation  is  estopped  to  repudiate 
the  contract  on  the  ground  that  it  was  ultra  vires.  Repeatedly  the 
courts  have  held  that  where  a  contract  with  a  corporation  — 
the  making  of  which  is  beyond  its  chartered  powers  —  has  been 
fully  executed  by  both  parties  to  the  contract,  neither  of  them 
can  assert  its  invalidity  as  a  cause  of  action  as  against  the  other. 

Again,  it  may  be  stated  that  where  a  corporation  has  acted  in 
excess  of  its  granted  powers  or  in  the  face  of  express  or  implied 
statutory  prohibition  it  is  clear  that  there  can  be  no  objection 
raised  on  that  ground  between  it  and  a  private  party,  for  this  can 
only  be  raised  by  the  State  in  a  direct  proceeding  to  forfeit  the 
franchises  of  the  corporation. ^  Again,  it  may  be  stated  that  the 
doctrine  of  estoppel,  as  well  as  the  doctrines  of  ratification  and 
confirmation  by  acquiescence,  apply  under  modern  rules  to  ultra 
vires  contracts.^ 

An  Ohio  court  has  divided  unauthorized  acts  of  a  corporation 
into  two  classes :  (1)  where  it  has  no  power  to  do  what  it  promises 
or  to  receive  what  is  promised  ;  (2)  where  it  has  no  power  to  do 
what  it  promises  but  may  receive  what  is  promised.  In  each  class, 
it  was  said,  if  action  is  brought,  one  of  three  states  of  fact  will 
appear  :  (a)  where  it  has  performed  its  promise,  but  tlio  other 
party  has  not ;  (&)  where  the  other  party  has  performed,  but  it 
has  not ;  (c)  where  neither  party  has  done  all  that  was  promised. 
In  case  1  a  the  corporation  cannot  recover  ;  the  contract  has  no 
existence.  In  case  2  a  the  corporation  may  recover  for  j)crform- 
ance  if  it  has  eliminated  the  ultra  vires  element  and  there  is  no 
want  of  mutuality.  In  cases  1  b  and  2  b  what  remains  to  be  done 
is  ultra  vires,  and  neither  party  can  recover.     In  cases  1  c  and 

1  Union  Nat.  Bank  v.  Matthews,  98  Works  Co.,  44  Fed.  146 ;  Liiikauf  r.  Lom- 
U.  S.  621 ;  Pullman  v.  Upton,  96  U  S..328.  bard,  137  N.  Y.  417  ;  33  N.  K.  472  ;  Nima 

2  SeeWater  Work.sCo.  y.Low,46N.y.  v.  School,  160  Mass.  177;  35  N.  E.  776; 
Sup.  633;  Woodruff  v.  Erie  11.  K.  Co.,  93  ,1.  B.  Farrell  Company  v.  Wolf,  96  Wis. 
N.  Y.  609  ;  Miller  v.  Am.  Mut.  Acci.  Ins.  10  ;  70  N.  W.  289  ;  vSmith  v.  Bank  of  New 
Co.,  92  Tenn.  167;  Wood  v.  Corry  Water  England,  72  N.  II.  4. 

04: 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  54 

2  c  neither  party  can  recover  because  the  contract  is  ultra  vires. 
Recovery  cannot  be  helped  by  promises  of  the  officers.  Pure 
assertion  of  law  cannot  give  rise  to  estoppel.  Nor  is  recovery 
aided  by  the  fact  that  a  consideration  was  conveyed  to  an  indi- 
vidual as  trustee  for  the  corporation.^ 

§  54.  Corporate  Domicile.  —  Corporations,  like  individuals,  must 
have  a  place  of  abode.^  As  far  back  as  Lord  Coke's  time  a  place 
of  abode  was  held  to  be  of  the  essence  of  a  corporation.^  Unless 
provided  otherwise  by  statute,  the  rule  at  the  present  time  is  that 
corporations  to  have  any  legal  existence  must  have  a  home  within 
the  boundaries  of  the  State  which  creates  it. 

In  the  words  of  Justice  McAdam  in  Kruse  v.  Dusenbury,'*  "  A 
corporation  cannot  become  a  tramp.  It  must  have  a  domicile  — 
not  in  theory,  but  in  fact  —  within  the  sovereignty  which  created 
it.  ...  A  corporation  in  the  nature  of  things  must  have  some 
office  or  place  of  business  in  the  State  where  it  was  incorporated, 
so  that  creditors  may  know  where  to  find  it,  that  they  may  present 
and  if  necessary  prosecute  their  just  demands.  The  statute  con- 
templates tliat  such  place  of  business  shall  exist  not  only  in  name, 
but  in  fact ;  for,  if  the  corporation  has  no  place  of  business  in  the 
state  where  it  was  incorporated,  it  does  not  affect  the  charter, 
but  it  cannot  have  branch  offices  elsewhere.  Like  a  live  tree,  it 
cannot  consist  of  branches  only,  but  must  take  root  in  its  native 
soil  Ijefore  it  can  extend  its  branches  into  other  States." 

Most  of  the  States  have  statutes  expressly  requiring  the  main- 
tenance of  a  domiciliary  office  within  the  State  of  the  corporation's 
origin,  and  failure  to  comply  with  this  requirement  renders  the 
charter  of  such  corj)oration  liable  to  forfeiture  upon  proper  action 
taken  by  the  State.^ 

Thus  in  Minnesota  a  charter  was  forfeited  for  the  failure  on  the 
part  of  the  corporation  to  maintain  a  domiciliary  office  therein. 
In  this  case,^  the  court  observed,  "  that  independently  of  statute, 
it  is  incumbent  upon  a  private  corporation  to  keep  its  princi})al 
place  of  business,  its  books  and  records,  and  its  principal  offices  in 

1  Vos  V.  Association,  9  Bull.  (Ohio)  104.     Tex.  80;  State  v.  Company,  45  Wis.  .'iTO  ; 

2  fn  re  Spring,'  Valley  Water  Co.,  17  Simmons  »>.  Company,  113  N.  C.  147;  18 
Cal.  132.  S.  E.   117;  State  i-.  Company,  58   Minn. 

8  See  Sutton's  Hospital  Cases,  5  Coke's  330;  59  N.  W.  1048;  State  u.  Company, 

Rep.  253.  59  Kan.  151  ;  .52  I'ac.  422. 

*  19  Wk.  Di.  (N.  Y.)  201.  «  State  v.  V.  &  N.  L.  Co.,  58  Minn.  330  ; 

6  See  N.  &  S.  U.  Co.  v.  People,  147  111.  59  N.  W.  1048. 
234  ;  3.5  N.  K.  60S ;   State  v.  Company,  24 

5  G5 


§  54   INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

the  State  where  it  is  incorporated,  to  an  extent  necessary  to  the 
fullest  jurisdiction  and  visitorial  power  of  the  State  and  its  courts 
and  the  ellicient  exercise  thereof  in  all  proper  cases,  and  that  a 
forfeiture  may  be  adjudged  for  a  violation  of  this  common  law 
obligation."  ^ 

The  authorities  have  on  more  than  one  occasion  brought 
actions  to  forfeit  charters  of  corporations  for  failure  to  main- 
tain domiciliary  offices  therein.^ 

In  the  words  of  one  court,  a  corporation  "must  have  some 
fixed  office  or  place  of  business  in  the  State  where  it  is  incor- 
porated, so  that  creditors  may  know  where  to  find  it."^  Again, 
the  object  of  naming  the  domicile  is  to  fix  the  place  for  the 
holding  of  stockholders'  and  directors'  meetings,  and  to  fix  a 
location  for  the  books  of  the  corporation  where  the  stockholders 
and  creditors  may  demand  an  inspection  thereof,  if  this  right 
is  given  to  them  by  statute.^  Another  purpose  is  to  fix  the 
venue  of  actions  brought  against  a  corporation  where  the  law 
requires  that  suits  shall  be  brought  in  the  county  where  the 
defendant  resides.  In  those  States  which  have  statutes  expressly 
authorizing  a  corporation  to  transact  all  of  its  business  out- 
side of  the  domiciliary  State,  this  provision  for  a  domiciliary 
office  is  of  the  utmost  importance. 

A  corporation  cannot  have  two  domiciles  at  the  same  timc.^ 
The  domicile,  residence,  and  citizenship  of  a  corporation  are  in 
the  State  from  which  the  charter  was  procured.^  The  place  of 
residence  is  in  the  county  where  the  principal  office  is  located.''' 

The  principal  office  of  a  corporation  and  the  place  for  the 
transaction  of  its  business  are  not  one  and  the  same  thing.  A 
corporation  may  have  its  office  in  one  locality  and  transact  its 
business  in  another.^ 

1  See  also  State  ex  re?.  ?;.  Company,  45         ^  Kruse   v.  Dusenbury,  19  Wk.   Dig. 

Wis.  .579;  Stickle  v.   Liberty  Cycle  Co.  (N.  Y.)201. 
(N.  J.),  .32  Atl.  708.  *  State  v.  Ry.  Co.,  45  Wis.  580. 

2  See  N.  &  S.  R.  Co.  v.  People,  147  111.  ^  Bridge  Co.  v.  Woolley,  78  Ky.  525. 

234 ;  35  N.  E.  608 ;  State  v.  Company,  24  ^  American,   etc.    Co.  v.  Johnston,  60 

Texas,  80;    State  v.  Company,  45   Wla.  Fed.  503 ;  Chafee  v.  Bank,  71  Me.  514. 
579;    Simmons  v.   Company,    113  N.  C.  ''  McSherry  v.  Company,  97  Cal.  637 ; 

147;  18  S.  E.  117;  22  L.  R.  A.  677;  State  32  Pac.  711. 

V.   Company,   58    Minn.   330;    59  N.   W.  «  Van  Etten  r.  Eaton,   19   Mich.  187; 

1048;    State  v.  Company,  59   Kan.    151;  Kennett   v.   Company,  68  N.  H.   432;    39 

52  Pac.  422;  Montgomery  v.  Forbes,  148  Atl.  585  ;  Meredith  v.  Company,  59  N.  J. 

Mass.  249;  19  N.  E.  342.  Eq.  257  ;  44  Atl.  55  ;  Harris  v.  McGregor, 

29  Cal.  124. 

66 


CHAP.  I.]  DRAFTING  THE    CHARTER.  §  56 

§  55.  Board  of  Management.  —  A  corporation  without  a  re- 
sponsible management  is  like  a  boat  without  oars,  a  ship  with- 
out sails.  It  must  have  certain  recognized  and  duly  appointed 
agents  to  represent  the  stockholders  in  the  management  of  the 
company.  These  agents  are  generally  known  as  a  board  of 
directors,  or  less  commonly  as  a  board  of  trustees.  Twenty  of 
the  States  require  the  names  of  the  first  board  of  directors  to 
be  inserted  in  the  certificate  of  incorporation,  while  of  the  re- 
mainder nine  require  merely  the  number  of  directors  to  be 
stated  therein.  Twenty-two  of  the  States  prescribe  residen- 
tial requirements  for  directors,  while  others  require  that  all 
directors  shall  be  stockholders.  The  number  of  directors 
required  by  the  various  business  corporation  acts  vary  from 
an  unlimited  maximum  to  a  minimum  of  one.^ 

Where  the  statute  requires  the  number  of  directors  to  be  set 
forth  in  the  articles,  the  incorporators  cannot  name  a  number 
less  than  the  minimum  required  by  law.^  The  power  to  have 
and  elect  directors  is  inherent  in  every  corporation,  irrespec- 
tive of  statute.  In  fact,  it  is  an  essential  feature  of  corporate 
existence,^ 

In  the  absence  of  express  provision  in  the  charter  or  by-laws 
the  management  of  the  business  of  the  corporation  is  vested  in 
the  Board  of  Directors  and  not  in  the  stockholders.*  Failure 
to  name  directors  in  the  articles  when  the  same  is  required 
by  statute  will  justify  State  officials  in  refusing  to  file  arti- 
cles.^ Merely  providing  for  executive  officers  in  the  articles 
is  insufficient.^  The  original  directors  named  in  the  certifi- 
cate of  incorporation  under  direction  of  the  incorporation  act 
are  directors  de  jure,  clothed  with  all  the  powers  of  the 
corporation,  and  may  exercise  the  same  powers  as  though 
elected  by  the  stockliolders.^ 

§  50.  Capital  stock.  —  Capital  stock  is  the  fund  of  money  or 
other  property  fixed  as  the  basis  for  conducting  the  business  of 
the  corporation,  and  contributed  by  the  corporators  to  the  capi- 

»  Sec  T'art  III.  Table  14,  papo  584.  ''  Eakwri«lit  v.  Company,  13  Ind.  404 ; 

2  /nr«Gcrmaiiia  Sangerbuud,  12  I'enn.  In  rr  Association,  I'.t   Pcnn.  Co.  Ct.  Hep. 

Co.  Ct.  Kep.  89.  25  ;  I'eople  r.  Selfre.igc,  52  Cal.  .-531 . 

8  Terwillig<T  i;.  Company,  59  111.  249;  "Bates   v.    Wilson,    14    Col.    140;    24 

Keefl  w.  Comj)aiiy,  50  In<l.  342  ;  Ilurlbut  v.  Tac.  99. 
Marshall    62  Wi.i.  5'JO;  22  N.  W.  852.  ^  Hamilton  Trust  Co.  v.  Clemens,  163 

*  Dank  v.  Bank,  5  W.  &  S.  (Pa.)  247.  N.  Y.  423  ;  57  N.  E.  614. 

67 


§  r)0    INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS,    [PART  I. 

tal,  and  is  usually  represented  by  shares  issued  to  subscribers 
to  the  stock  on  the  initiation  of  the  enterprise.^  Capital  stock 
from  another  aspect  is  the  security  for  creditors  of  the  corpora- 
tions, and  entitles  the  owners  thereof  to  participate  in  the  man- 
agement of  corporate  business  and  share  in  its  profits  and  in  its 
surplus  after  payment  of  corporate  debts.  ^  Shares  of  stock,  on 
the  other  hand,  are  simply  the  muniments  and  evidence  of  the 
holder's  title  to  a  given  share  in  the  property  and  franchises  of 
the  corporation  in  which  he  is  a  member.  ^  Frequently  the  words 
"capital"  and  "capital  stock"  are  used  interchangeably  to 
express  the  property  and  assets  of  the  corporation. 

It  is  not  altogether  clear  whether  express  authority  to  issue 
shares  of  capital  stock  is  necessary,  yet  it  has  been  repeatedly 
held  that  in  order  to  increase  or  reduce  the  capital  stock  of 
a  corporation,  legislative  authority  is  necessary.  The  prevail- 
ing view  seems  to  be  in  favor  of  the  necessity  of  legislative 
authority.* 

In  the  absence  of  statutory  or  charter  requirements  neither 
subscription  for  capital  stock  nor  payment  thereof  is  necessary 
to  corporate  existence.^  If  the  charter  of  a  corporation  docs  not 
fix  the  amount  of  its  capital  stock,  it  must  be  fixed  by  the  stock- 
holders, or,  with  their  consent,  by  the  directors.^  Stock  can  be 
issued  only  by  direction  of  the  corporation." 

In  many  of  the  Commonwealths  the  minimum  amount  of 
capital  stock  which  a  corporation  may  have  is  fixed  by  statute. 
Very  few  of  the  States  limit  the  maximum  amount  of  capitaliza- 
tion.^ To  determine  the  amount  of  capital  stock  that  a  corpora- 
tion has,  preferred  stock  must  always  be  included  therein.^  It 
is  not  always  an  easy  question  to  determine  who  are  and  who 


1  Christensen  i^.  Eno,  106  N.  Y.  97  ;  12  Company,  74  Texas,  421 ;  2  S.  W.  101  ; 
N.  E.  648.  Stowe  v.  Flagg,  72  El.  397. 

2  Jannev  v.  Bank,  98  Ala.  515  ;  13  So.  ^  So.  K.  Ry.   Co.  v.  dishing,  45    Me. 
761.             '  524;  State   v.   Bank,   95    Tenn.   221;  31 

8  Mechanics'    Bank    v.   Company,    13  S.  W.  993. 

N.  Y.  599.  ''  II.  D.  P.  Ass'n  v.   Stevens,  34  Neb. 


*  Cooke  V.  Marshall,  191  Pa.  St.  315 
43  Atl.    314;    196   Pa.  St.  200;  46  Atl 


447;     Detroit    Chamber    of    Commerce    41  Ind.  151;  Williams  r.  Hewitt,  47  La. 


V.  Gardner,   109  Mich.   691 ;    67   N.   W 
897. 

5  McGintyw.  Company,  155  Mass.  183 
29  N.   E.  510;  Jefferson   Nat.   Bank  v 

68 


528 ;  52  N.  W.  568 ;  Hendrix  v.  Academy 
of  Music,  73  (ia    437;  State  v.  Company, 


Ann.  1076  ;  17  So.  496. 

8  See  Part  III.  Table  5,  page  575.     See 
also  Hughes  v.  Company,  34  Md.  316. 

9  State  V.  Company,'l6  S.  C.  524. 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  57 

are  not  stockholders.     The  question  must  usually  be  determined 
by  the  particular  facts  of  each  case.^ 

Sometimes  the  incorporation  act  requires  the  articles  to  state 
the  time  when  and  the  manner  in  which  stock  shall  be  paid  for. 
It  is  sufficient  in  this  connection  to  say,  for  example,  that  the 
stock  shall  be  paid  for  in  cash,  and  that  no  certificate  of  stock 
shall  issue  until  such  payment  is  made.^  The  statement  may 
be  broadened  if  desired  by  setting  forth  in  the  articles  that  the 
stock  shall  be  paid  for  in  property,  at  such  times  and  of  such 
a  character  and  with  such  notice  to  the  subscribers  as  the 
directors  shall  deem  for  the  best  interests  of  the  corporation. ^ 

Where  the  statute  requires  the  amount  of  the  capital  stock  to 
be  stated,  it  has  been  held  sufficient  to  simply  state  the  number 
of  shares  and  the  par  value  of  the  same.* 

§  57.  Limitations  upon  Amount  of  Capital  Stock.  —  As  has 
already  been  observed,  the  great  majority  of  the  incorpora- 
tion acts  provide  that  the  amount  of  capital  stock  which  the 
corporation  is  to  have  shall  be  fixed  in  the  articles  of  incor- 
poration. This  is  the  usual  and  often  the  only  limitation  on 
the  amount  of  capital  stock  which  any  particular  corporation 
is  authorized  to  have.  However,  in  fourteen  of  the  Common- 
wealths the  minimum  capital  stock  of  all  corporations  is  fixed 
by  statute,  while  in  three  of  them  the  maximum  capitalization 
is  also  prescribed.^ 

In  this  connection  the  words  of  the  court  in  Barry  v.  Mer- 
chants p]xchangc  Co.^  are  peculiarly  instructive.  In  that  case 
Chancellor  Sanford  observed:  "Tiiat  the  capital  stock  of  a 
corporation  is  the  aggregate  amount  of  the  funds  of  the  cor- 
porators which  are  comljincd  together  under  a  charter,  for  the 
attainment  of  some  common  object  of  j)ul)lic  convenience  or 
jirivate  utility.  This  amount  is  fixed  in  the  act  of  incorpora- 
tion. It  is  thus  limited,  in  reference  to  the  convenience  of  the 
intended  corporators,  and  for  the  information  and  security  of 
the  public  at  large.  To  the  corporators  it  prescribes  the  amount 
and  tlic  subdivisions  of  their  respective  contriliutiona  to  the  com- 

1  See  O'Brioii  v.  Fulkcrson,  75  Mich.  *  Buffalo,  etc.  Ry.  Co.  v.  Hatch,  20 
554;  42  N.  W.  979.  N.  Y.  157. 

2  N.  O.  Ry.  Co.  V.  Frank,  39  La.  Ann.  ''  See  Part  III.  Tahlo  5,  page  575. 
707  ;  2  So.  3"lO.                                                        <>  1  Sau.  Chau.  (N.  Y.)  280. 

^  See  Baltimore,  etc.  Telephone  Co.  v. 
Company,  37  La.  Ann.  883. 

69 


§  "iD   INCORPORATION    AND   ORGANIZATION   OP   CORPORATIONS.    [PART  I. 

moil  fund ;  the  voice  which  each  shall  have  in  the  control  and 
management;  and  the  apportionment  of  the  profits  of  the  enter- 
prise. To  the  community  it  announces  the  extent  of  the  means 
contributed  and  forming  the  basis  of  the  dealings  of  the  corpo- 
rate body,  and  enables  every  man  to  judge  of  its  ability  to  meet 
its  engagements  and  perform  what  it  undertakes.  And  when  the 
statute  requires  the  stock  to  be  paid  in  before  the  corporation 
can  transact  business,  security  to  those  contracting  with  it  is 
thereby  superadded  to  the  information  of  its  resources.  These 
objects  for  the  public  benefit  are  such  as  the  legislature  had  in 
view  in  limiting  the  amount  of  capital  stock,  and  requiring  a 
specified  sum  or  proportion  to  be  paid  in.  One  other  considera- 
tion dictates  the  amount  thus  fixed.  This  is  the  probable  and 
reasonable  extent  of  the  means  requisite  to  the  accomplishment 
of  the  end  proposed,  qualified  in  many  cases  by  the  unwilling- 
ness of  the  legislature  to  create  these  artificial  beings  with  an 
undue  amount  of  capital." 

§  58.  Par  Value  of  Capital  Stock.  —  In  thirty-six  of  the 
States  the  par  value  of  the  shares  of  the  capital  stock  may 
be  any  amount.  In  the  remainder  the  par  value  is  limited 
by  statute.  1  Where  the  corporation  act  does  not  require  that 
the  number  and  par  value  of  shares  be  set  forth,  the  presumption 
is  that  the  legislature  intended  that  this  should  be  fixed  by  the 
stockholders  of  the  corporation  at  the  organization  meeting.^ 
The  matter  may  be  entrusted  by  the  stockholders  to  the  directors 
if  desired.^ 

The  question  sometimes  arises  as  to  whether  changing  the  par 
value  of  shares  without  increasing  or  decreasing  the  capital 
stock  constitutes  such  a  "variation"  therein  as  to  come  within 
the  statutory  prohibition  forbidding  such  variation  without  leg- 
islative authority.  The  prevailing  rule  seems  to  be  that  such 
variation  may  be  made  only  by  conforming  to  the  statute  (if  any 
exists)  authorizing  amendments  to  the  charter  in  this  regard.* 

§  59.  Amount  of  Stock  Subscriptions.  —  Unless  made  SO  by 
statute,  no  subscription,  in  whole  or  in  part,  of  the  capital  stock 
of  a  corporation  is  necessary,  either  to  the  validity  of  a  corpora- 

1  See  Part  III.  Table  6,  page  576.  ^  Commonwealth  v.  Company,  52  Pa. 

2  S.  &  K.   R.   Co.  V.  Gushing,  45  Me.     St.  506. 

524;    State  v.  Bank,   95   Tenn.   221;  31  *  C.  C.  Ry.  Co.  v.  Allerton,    18   Wall. 

S.  W.  99.3.  233;  Seignouret  v.  Company,  24  Fed.  332. 

70 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  59 

tion's  existence  or  to  its  right  to  transact  business. ^  The  rule, 
however,  that  exists  in  this  country  to-day  is  doubtless  opposed 
to  the  common  law  rule  on  the  subject.^  The  States  of  Wash- 
ington, Illinois,  and  Missouri  require  subscriptions  to  the  full 
amount  of  the  authorized  capital  stock.  ^ 

Fourteen  of  the  Commonwealths  require  the  amount  of  stock 
subscribed  for  by  each  incorporator  to  be  set  forth  in  the  arti- 
cles, while  others  require  the  amount  of  stock  with  which  the 
corporation  will  commence  business  to  be  stated.  A  few  pre- 
scribe that  the  amount  of  stock  actually  subscribed  shall  be  set 
forth.*  Sometimes  provisions  are  found  requiring  the  residences 
of  subscribers  to  the  capital  stock  to  appear  in  the  articles.^ 

Any  person  capable  of  contracting  may  subscribe  for  stock  or 
become  a  stockholder.  This  includes  aliens,  married  women, 
and  corporations.^  Subscriptions  for  stock  must  be  made 
through  commissioners  where  the  law  so  provides.'^  But  even 
where  such  subscriptions  are  made  through  parties  other  than 
commissioners  contrary  to  the  statute,  such  subscriptions  may 
be  afterwards  ratified  by  the  proper  party.^ 

Occasionally  attempts  are  made  to  limit  by  charter  provisions 
the  amount  of  stock  which  may  be  owned  by  any  one  stockholder. 
Such  provisions  are  generally  held  void,  as  not  called  for  by  the 
governing  statute.'^  An  important  question  that  arises  in  con- 
nection with  the  general  subject  of  stock  subscriptions,  amount 
of  stock  paid  in,  and  amount  of  capital  with  which  the  corpora- 
tion may  begin  business,  has  reference  to  the  effects  which  follow 
a  failure  on  the  part  of  the  corporation  to  comply  with  such 
statutory  requirements.  In  general,  it  may  be  said  that  the 
penalties  which  follow  a  failure  to  comply  with  such  provisions 
are  generally  along  the  following  lines: 

First,  they  afford  a  basis  for  an  action  to  be  brought  by  the  State 

1  Livesey  v.  Company,  5  Neb.  50;  Cal.  201  ;  L.  0.  A.  Ry.  Co.  y.  Ma.son,  16 
Johusou  y.  Kes-sler,  7G   la.  411  ;  41  N.  \V.     N.  Y.  4r)l. 

57;    S.   F.  N.   liank  v.  Altny,   117  Mass.  ''  See  Steiumetz  i'.  Company,  57  lud. 

476  ;  Minor  r.  Bank,  1  Peters  (U.  S.),  46  ;  457. 

7  L.  E.  47  ;  Schenectady,  etc.  I'lnnk  lioad  "  Dulilin.etc.  Ry.  Co.  v.  Black,  L.  R.  8 

Co.  y.  Thatcher,  111  N.  Y.  102.  Exch.  181  ;  Cork,  etc.  Ry.   Co.   r.  Caze- 

2  Schloss  V.  Company,  87  Ala.  411  ;  0  nove,  L.  R.  10  Ad.  &  El.  935. 

So.  360.  '   Shurtz  v.  Comjiany,  9  Midi.  269. 

»  Denny  Hotel  Co.  v.  Schram,  6  Wash.  **  Walker  v.  Company,  34  Misc.  (N.  Y.) 

1.34;  32  Par.  1002.  245. 

*  See  Buffalo,  etc.   Ry.  Co.   v.  Hatch,  '•*  O'Brien    (■.    Cununinp.s,   13  Mo.  Ap. 

20  N.  Y.    157;    People  v.  Chambers,  42  I'J"- 

71 


§  GO   INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

looking  to  the  forfeiture  of  the  charter.  Secondly,  they  some- 
times result  in  rendering  the  incorporators  liable  as  co-partncrs, 
the  courts  holding  that  by  failing  to  comply  with  the  statute 
they  have  forfeited  their  right  to  immunity  from  individual 
liability  for  what  would  otherwise  be  distinctively  corporate 
debts.  Tliirdly,  in  some  jurisdictions  a  penalty  is  prescribed 
by  statute  making  directors  and  officers  liable  for  all  debts  con- 
tracted before  the  statutory  requirements  above  referred  to  have 
been  complied  with. 

It  goes  without  saying  that  corporations  cannot  legally  issue 
stock  in  excess  of  their  authorized  capitalization.^  However, 
this  does  not  mean  that  bona  fide  purchasers  of  such  shares  are 
without  remedy,  for  ordinarily  in  such  cases  both  the  corpora- 
tion and  its  officers  are  liable. ^ 

§  60.  Amount  of  Stock  paid  in.  —  It  has  already  been  ob- 
served that  neither  the  subscription  to  nor  the  payment  of  the 
whole  amount  of  capital  stock  authorized  by  the  charter  is  a 
condition  precedent  to  the  legal  existence  of  the  corporation 
unless  it  is  made  so  by  a  governing  statute.  Ordinarily,  it 
merely  goes  to  the  right  to  transact  business,  without  subjecting 
the  directors  or  the  corporate  officers  and  agents  to  personal 
liability.^  However,  in  some  few  of  the  States  the  corporation 
acts  provide  that  before  the  corporation  may  commence  busi- 
ness a  certain  percentage  of  the  capital  stock  shall  be  paid  in.* 
Where  the  articles  fail  to  so  set  forth  the  amount  of  stock  paid 
in  as  required  by  statutes,  this  does  not  affect  ipso  facto  the 
legality  of  the  corporation's  existence,  but  it  is  a  matter  which 
can  only  be  taken  advantage  of  by  the  State  in  quo  warranto 
proceedings.^ 

Statutory  payments  must  be  made  in  the  manner  and  time 
provided  by  statute,  and  they  must  be  paid  in  in  good  faith.^ 

1  Mechanics'  Bank  v.  Company,  13  Mu.sic,73Ga.437  ;  K.  C.  H.  Co.d.  Hunt,  57 
N.  Y.  599;  Scovill  v.  Thayer,  105  U.  S.  Mo.  126;  Tradesmen  Publishing  Co.  v. 
143.  Company,  95  Teun.  634;  32  S.  W.  1097; 

2  N.  Y.  N.  H.  R.  Co.  V.  Schuyler,  34  Ag.  Bank  v.  Burr,  24  Me.  256 ;  Y.  R. 
N.  Y.  30  ;  Moores  v.  Bank,  111  U.  S.  156  ;  L.  N.  Co.  v.  Company,  72  Fed.  62. 

4  S.  Ct.  .345.  ^  McLaren    v.    Pennington,    1     Paige 

3  D.  S.,  etc.  Co.  V.  Attorney-General,  (N.  Y.),  102;  People  v.  Chambers,  42  Cal. 
21  Can.  Sup.  Ct.  72 ;  S.  P.  II.  Co.  v.  201  ;  State  v.  Company,  3  Hump.  (Tenn.) 
Thatcher,  11  N.  Y.  102.  305  ;  People  v.  City  Bank,  7  Col.  226 ;  3 

*  See  Part  III.  Table  6,  page  576.  Pac.  214  ;  People  v.  Bank,  129  111.  618  ;  22 

5  E.  P.  R.  Co.  V.  Vaughan,  14  N.  Y.  N.  E.  288 ;  Hammond  v.  Strauss,  53  Md.  1. 
546.      See  also  Hendrix  v.  Academy  of 

72 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  62 

Failure  to  state,  in  the  affidavit  relative  to  the  amount  of  stock 
paid  in,  that  such  payments  had  been  made  in  good  faith  to  the 
directors  is  not  fatal,  as  the  bona  fides  of  the  transaction  will  be 
implied.  1 

§  61.  Amount  of  Stock  •with  which  a  Corporation  may  begin 
Business.  —  Some  few  of  the  States  require  that  the  amount  of 
capital  with  which  a  corporation  will  begin  business  shall  be 
set  forth  in  the  articles.  In  some  cases,  as  in  New  Jersey  and 
New  York,  the  minimum  amount  is  prescribed  by  statute.  The 
failure,  however,  to  actually  pay  in  the  prescribed  amount  of 
capital  stated  in  the  articles  will  not  operate  to  destroy  the 
corporate  existence.^ 

§  62.  Duration  of  Corporate  Existence.  —  At  one  time  there 
was  a  tendency  on  the  part  of  the  States  to  limit  the  duration  of 
corporate  existence  of  corporations  to  a  definite  period  in  the 
supposed  interest  of  the  public.^  At  the  present  time  in 
twenty-six  of  the  Commonwealths  perpetual  charters  may  be 
jjrocured  under  the  business  corporation  acts  in  force  therein. 
In  the  remaining  States  the  periods  vary  from  one  hundred 
years  to  twenty.*  Even  in  these  States  provision  is  made  for 
extension  of  corporate  existence  by  complying  with  the  statute 
in  such  case  made  and  provided.^ 

The  phrase  "perpetual  succession  "  has  been  held  not  to  be 
equivalent  to  perpetual  existence.^  The  naming  of  a  period  of 
corporate  existence  in  the  charter  in  excess  of  that  permitted  by 
law  will  not  render  the  charter  void,  but  the  corporate  existence 
will  not  be  continued  beyond  the  statutory  period." 

It  is  scarcely  necessary  to  say  that  the  continuance  of  active 
corporate  existence  during  the  entire  period  limited  by  the 
charter  is  not  binding  u[)on  the  corporation.^  A  difficult  ques- 
tion often  arises  when  the  corporation  attempts  to  continue  its 
active  business  as  a  corporation  and  to  perform  its  corporate 

1  Buffalo,  etc.   lly.  Co.  v.  Hatch,    20  ^  See  pout,  sec.  1 20. 

N.  Y.  157.  •"'  Faircliild  v.  Asaocintion,  71  Mo.  526  ; 

'  Staunton    Copper     Mining    Co.      v.  State  rx  ml.  Walker  v.   I'ayno,    129  Mo. 

Thunnoud,  7  Mo.  Ap.  587;   Hammond  v.  468;  31  S.  W.  7'J7. 

Straus.s,  53  Md    1  ;  State  f.  Webb,  'J7  Ala.  ''  People  i'.  Clieeseman,  7  Col.  376  ;  3 

111;  12  So.  377.  I'ac.  710;  HughcH  v.  Company,  34   Md. 

3  Smith  >•.  Company,  58  N.  J.  Er|.  331  ;  316.     See  also    niiffaio,  etc.    Hy.   Co.   i-. 

43  Atl.  567  ;  State  ex  rel.  Walker  v.  Payne,  Hatcli,  20  N.  Y.  157. 

129  Mn.  468;  31  S.  W.  797.  »  Cronin  r.  Comjiany  tl  al.,  29  Wk.  L. 

*  See  I'art  III.  Tabic  13,  page  583.  Bui.  (Ohio)  52. 

73 


§  04    INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS.    [I'ART  I. 

functions  after  the  expiration  of  its  charter.  Ordinarily  this 
is  a  matter  which  concerns  the  State  alone. ^  Under  such  cir- 
cumstances, in  order  to  protect  third  parties,  the  courts  recognize 
such  corporations  as  corporations  de  facto  on  the  ground  that 
there  is  clearly  authority  for  their  attempting  to  act  as  cor- 
porations. ^  ^lany  courts  of  high  authority  have  held  that  a 
corporation  is  dissolved  and  ceases  to  exist  when  its  charter 
expires.^  In  many  States  there  are  statutes  permitting  corpo- 
rations to  exist  as  such  for  certain  purposes  after  the  expiration 
of  their  charter.^  The  purpose  of  such  statutes  is  to  grant  to 
the  corporation  time  to  close  up  its  corporate  affairs.  It  has 
heen  held  that  the  object  of  such  statutes  is  not  to  limit 
but  to  enlarge  corporate  privileges  so  that  the  corporation 
may  continue  active  business  throughout  the  whole  charter 
period.^ 

§  63.  Date  of  Annual  Meeting.  —  In  Alaska,  Arizona,  Dela- 
ware, Iowa,  Minnesota,  Nebraska,  and  Utah  the  corporation  acts 
require  that  the  date  of  the  annual  meeting  of  the  corporation 
be  inserted  in  the  articles.  Such  provisions  are  to  be  regarded 
as  directory  rather  than  mandatory,  and  their  legal  effect  is  es- 
sentially the  same  as  if  such  provision  was  merely  made  in  a 
valid  by-law  of  the  corporation.  In  Arkansas,  Louisiana,  and 
Tennessee  the  date  of  the  organization  meeting  must  appear  in 
the  certificate  of  incorporation.^  Even  when  the  statute  requires 
that  the  directors  shall  be  chosen  at  the  annual  meeting,  this 
has  no  reference  to  the  election  of  the  first  board  at  the  organi- 
zation meeting.''' 

§  64.  Limitation  upon  Corporate  Indebtedness.  —  In  the  absence 
of  constitutional  or  statutory  provision,  there  are  no  limita- 
tions imposed  upon  corporations  with  respect  to  the  amount  of 
indebtedness  which  they  may  incur. ^  The  whole  extent  of  cor- 
porate credit  is  measured  and  controlled  by  its  capital.  The 
laws  of  trade  have  placed  more  efficient  barriers  than  the  State 

1  Bushnell  v.  Company,  138  111.  67 ;  27  ^  Berwick  v.  Coin7)any,  39  Mich.  701. 
N.  E.  596.  ®  Hughes    v.    Parker,  20  N.    H.    58 ; 

2  Miller  v.  Company,  31  W.  Va.  836;  Beardsley  u.  Johnson,  121  N.  Y.  224;  24 
8  S.  E.  600.  N.  E.  380. 

8  Bradley  v.   Reppell,    133   Mo.  545;         ''  B.  A.  M.   Co.  v.  Moring,   15   Gray 

32  S.  \V.  645;  Sturges  v.  Vanderbilt,  73  (Mass.),  211. 
N.  Y.  384.  *  Barry  v.    Company,   1    San.   Chan. 

*  See  Part  III.  Table  17,  page  587.  (N.  Y.)  280,  310. 

74 


CHAP.  I.]  DRAFTING   THE    CHARTER.  §  66 

legislatures  to  the  power  of  corporate  borrowing.  In  Alaska, 
Arizona,  Florida,  Iowa,  Minnesota,  and  Nebraska,  the  incor- 
poration acts  require  that  the  maximum  amount  of  indebtedness 
which  the  corporation  may  incur  shall  be  set  forth  in  the  articles 
of  incorporation. 

In  twenty -two  of  the  Commonwealths  statutes,  either  expressly 
or  by  implication,  prescribe  the  amount  of  indebtedness  which 
corporations  may  incur.  ^ 

"When  the  phrase  "  implied  limitation  upon  corporate  indebted- 
ness "  is  used,  reference  is  had  to  that  not  uncommon  form  of 
limitation  where  directors  or  stockholders  are  made  liable  for 
corporate  debts  in  case  the  corporate  indebtedness  exceeds  a 
certain  definite  amount. ^ 

§  65.  Exemption  of  Stockholders  from  Personal  Liability.  — 
While  there  is  no  common-law  liability  imposed  upon  stock- 
holders for  corporate  debts,  nevertheless  parties  may  lawfully 
contract  to  any  extent  they  see  fit  as  to  their  own  personal  lia- 
bility for  such  indebtedness.^ 

In  order  that  stockholders  may  avoid  personal  liability  for 
corporate  debts  it  is  necessary  in  Arizona,  Delaware,  Iowa, 
Kentucky,  Louisiana,  Mississippi,  Nebraska,  and  Utah,  to 
insert  provisions  in  the  certificates  of  incorporation  expressly 
exempting  stockholders  from  such  liability. 

§  GO.  Adoption  of  By-Lawa  by  Directors.  —  In  a  large  number 
of  the  States  and  Territories  the  incorporation  acts  expressly 
provide  for  delegation  of  power  to  directors  to  make,  alter,  or 
repeal  by-laws.*  In  many  of  the  States  in  order  that  the  cor- 
poration may  have  this  power  it  is  necessary  to  insert  provision 
therefor  in  the  charter.^  Unless  the  power  to  make,  alter,  or 
repeal  by-laws  is  thus  delegated  to  the  board  of  directors,  it  can 
only  be  exercised  by  the  stockholders.^ 

1  See  Part  III,  T.il.le  12,  page  .'582.  ^  London,  etc.  Bank  v.  Parrott,  12.^) 
See  also  Commonwealth  y.  Company,  129  Cal.  472;  .58  Pac.  164;  Lill.anl  i-.  Corn- 
Pa.  St.  40.5 ;  18  Atl.  414  ;  O.  H.  Mfp.  Co.  v.  pany,  14  Te.x.  Civ.  Ap.  67 ;  .36  S.  W.  792 ; 
Cannev,  .54  N.  H.  29.5  ;  Thornton  ;;.  Bal-  Tidionto  Sav.  Bank  i>.  Libbey,  101  Wig. 
com.  s's  la.  198;  52  N.  W.  190  ;  Hener  v.  19.'J  ;  77  N.  W.  182. 

Carmichiiel,  82  la.  288  ;  47  N.  W.  10.34.  ••  See  Part  III.,  Table  12,  page  582. 

2  See  Tallmail^e  r.  Company,  4  Barb.  ''  Cahill  v.  Company,  2  Doug.  (Mich.) 
(N.  Y.).382;  Allison  c.  Company,  87  Tenn.  128;  Ilcintzelman /•.  Association,  .38  Minn. 
60;  9  S.  W.  226;  Sweney  v.  Talcott,  85  1.38;. 36  N.W.I  00;  Bank  of  Holly  Springs 
la.  103  ;  52  N.  W.  106  ;  Gunther  i;.  Com-  v.  Pinson,  58  Miss.  421. 

pany,  107  Ky.  44;  52  S.  W.  931.  •*  Morton  Gravel  Uoad  v.  Wysong,  51 

75 


§  08   INCORPORATION   AND  ORGANIZATION   OP   CORPORATIONS.    [PART  I. 

§  ()".  Provisions  for  the  Regulation  of  the  Internal  Affairs  of  the 
Corporation.  —  In  a  number  of  the  states  statutory  autliority  is 
to  be  found  for  inserting  in  tlic  articles  of  incorporation  any 
provisions  that  may  be  desired  relative  to  the  regulation  of  the 
business,  and  for  the  conduct  of  the  affairs  of  the  corporation, 
creating,  defining,  and  limiting  the  powers  of  the  corporation, 
the  officers,  and  the  stockholders.^  Under  such  authority  the 
clauses  which  are  usually  inserted  are  the  following:  giving  the 
directors  power  to  sell  all  the  business  of  the  corporation  as 
an  entirety ;  the  power  to  sell  entire  corporate  property  at  the 
request  of  a  majority  of  the  stockholders;  giving  the  right  to 
directors  to  make  and  alter  by-laws;  giving  the  power  to  direc- 
tors to  borrow  money  upon  bond  and  mortgage  without  authority 
therefor  being  first  given  by  the  stockholders ;  power  to  appoint 
additional  vice-presidents  and  assistant  secretaries  and  treas- 
urers; to  declare  dividends;  to  reserve  and  fix  working  capital; 
to  appoint  an  executive  committee  from  the  board  of  directors; 
giving  stockholders  power  to  remove  directors;  giving  power 
to  create  a  lien  upon  stock  for  indebtedness  due  company  from 
stockholders;  provision  for  the  examination  of  books  by  the 
stockholders,  and  in  connection  therewith  power  to  insert 
private  publicity  clause;  to  provide  for  cumulative  voting  and 
limiting  the  power  to  vote;  reservation  of  power  to  change 
provisions  in  the  articles  of  incorporation;  power  to  create 
preferred  stock. 

§  68.  Miscellaneoua  Provisions  Relative  to  Contents  of  Articles 
of  Incorporation.  —  It  would  be  impossible  to  enumerate  all  the 
peculiar  provisions  under  the  several  business  corporation 
acts  which  exist  in  the  various  States.  Among  those  not 
already  referred  to  are  the  following :  Statement  of  the  amount 
of  stock  subscribed  for  by  the  incorporators;  a  list  of  all 
parties  who  have  subscribed  for  stock  as  preliminary  to 
incorporation.  2 

In  setting  forth  the  subscribers  to  the  capital  stock  it  is 
sufficient    to   use   above   the   first   name    the   words    "names," 

lud.  4;   N.  M.  T.  S.  Co.  v.  Bishop,  103  2  Chester  Glass  Co.  f.  Dewey,  1 6  Mass. 

Wis.    492 ;  79  N.   W.  785  ;   In  re  A.  A.  94  ;  C.  V.  &  P.  Co.  v.  Secretary  of  State, 

Griffing  Iron  Co.,  63  N.  J.  Law,  168,  357  ;  128  Mich.  62 ;  87  N.  W.  901 ;  J.  N.  Bank 

41  Atl.  9.31  ;  46  Atl.  1097.  v.   Company,    74   Tex.   421;    12    S.    W. 

1  See  Part  III.  Table  10,  page  580.  110. 

7G 


CHAP.  I.]  DRAFTING   THE   CHARTER.  §  69 

"residences,"  "shares,"  and  then  immediately  follow  the 
same  with  the  names  of  the  subscribers  to  the  capital  stock.  ^ 
Among  other  provisions  are  those  requiring  the  naming  of  an 
agent  upon  whom  service  of  process  upon  the  corporation  may 
be  served ;  ^  another,  a  statement  of  the  manner  of  conducting 
the  business  of  the  corporation.^  A  number  of  the  States 
require  the  names  and  residences  of  the  incorporators  to  be 
set  forth  in  the  articles.^  Sometimes  it  is  necessary  to  secure 
the  approval  of  the  Attorney-General  to  the  form  and  contents  of 
the  articles.^ 

§  69.  Construction  of  Charter.  —  Under  the  liberal  provisions 
of  the  modern  incorporation  acts,  the  articles  drawn  thereunder 
necessarily  assume,  by  the  sole  action  of  the  incorporators, 
numerous  powers,  many  of  which  have  been  heretofore  of  a 
public  character,  affecting  the  interests  of  the  public  very 
largely  and  very  seriously.  The  Supreme  Court  of  the  United 
States  has  taken  the  view  that,  for  the  reasons  just  given,  these 
articles  do  not  commend  themselves  to  the  judicial  mind  as  a 
class  of  instruments  requiring  or  justifying  any  very  liberal  con- 
struction. That  court  has  said  in  this  connection,  that  where 
the  question  is  whether  they  conform  to  the  authority  given  by 
statute  in  regard  to  corporate  organization,  it  is  always  to  be 
determined  upon  a  just  construction  of  the  power  granted  to 
them  with  a  due  regard  for  all  other  laws  of  the  State  upon  that 
subject.^ 

In  construing  charters  the  following  rules  seem  to  govern  the 
courts :  First,  the  intention  of  the  legislature  must  be  given  due 
weight.^  Second,  due  consideration  must  be  given  to  the  policy 
of  the  State  with  reference  to  such  matters  as  evidenced  by  the 
character  of  legislation.  Third,  all  ambiguities  in  the  terms  of 
the  articles  of  incorporation  must  be  construed  against  the 
corporation  in  favor  of  the  public.^  Fourth,  words  should  be 
given  their  ordinary  meaning.^     Fifth,   the  construction  given 

1  Vawter  v.  Franklin  College,  53  Ind.  «  Or.  Ry.  Co.  v.  Or.  Ry.  Co.,  130  U.  S. 

88.  1  ;  9  S.  Ct.  409. 

"  Johnson   v.  Ma.sons'   Lodge,  21    Ky.  ''  Union  Nat.  Bank   v.   Matthews,   98 

L.  R.  493;  .51  S.  \V.  620.  U.  S.  621. 

8  State  V.  As-sociation,  29  O.  St.  399.  »  A.  L.  &  T.  Co.  i;.  Company,   157  111. 

*  Steinmetz  v.  Company,  57  Ind.  457;  641  ;  42  N.  E.  153. 

State  V.  Foulkes,  94  Ind.  493.  "  Riker  v.  Leo,  133  N.  Y".  519  ;  30  N.  E. 

*  See    Field    v.    Cooks,    16   La.   Ann.     598. 


153. 


77 


§  09   INCORPORATION   AND   ORGANIZATION   OF  CORPORATIONS.    [PART  f. 

the  charter  must  always  be  reasonable.^  Sixth,  where  the 
language  of  the  certificate  as  to  corporate  purposes  and  powers 
permits  of  two  constructions,  that  the  more  favorable  to  the 
State  is  to  be  adopted.  ^ 

1  Black  V.  Company,  22  N.  J.  Eq.  130 ;         ^  Bridge  Co.  v.  Ferry  Co.,  29  Conn. 
Wheeler,  etc.  Co.  i'.  Company,  14  Wash.     221. 
630 ;   45  Pac.  316 ;   Nat.   Bank   v.  Com- 
pany, 41  O.  St.  1. 


78 


CHAP.  II.]  PROCURING   THE   CHARTER.  §  T3 


CHAPTER  II. 

PROCURING  THE   CHARTER. 

§  70.  Signing  the  Articles.  —  With  but  few  exceptions  the 
business  corporation  acts  of  the  various  Commonwealths  provide 
that  the  articles  shall  be  signed  by  the  incorporators.  ^  It  is  not 
requisite  to  the  validity  of  such  articles  that  they  be  signed 
within  the  State  from  which  the  charter  is  procured. ^  The  arti- 
cles may  be  drawn  on  separate  sheets,  the  last  one  of  which  only 
need  be  signed  by  the  incorporators.^  If  the  incorporator  is 
unable  to  write  he  may  sign  the  articles  by  his  mark.*  The  full 
name  need  not  be  signed.^ 

If  seals  are  required  by  statute  they  must  be  used.^  The  use 
of  a  power  of  attorney  to  sign  articles  would  probably  not  be 
sanctioned  where  the  statute  calls  for  additional  matters  which 
are  necessarily  personal  in  their  nature." 

§  71.  Acknowledgment  of  Execution  of  Articles. —  With  some 
few  exceptions,  the  incorporation  acts  of  all  the  States  require 
that  the  articles  of  incorporation  shall  be  acknowledged  by  the 
incorporators,  before  some  officer  authorized  by  law  to  take 
acknowledgments  of  deeds.  There  must  in  all  cases  be  a  proper 
number  of  acknowledgments.^  Where  the  statutes  designate 
some  particular  officer  to  take  the  acknowledgment,  the  charter 
is  voidable  if  taken  before  any  other  official.^  A  failure,  on  the 
part  of  the  officer  taking  the  acknowledgment,  to  certify  that  the 

1  State  V.  Critchett,  37  Minn.  13;  32  No.  5816;  Warner  v.  Callender,  20  0.  St. 
N.  W.  787;  People  v.  Company,  97   Cal.     190. 

276;   32  Pac.  236;   Hughes  v.  Company,  ^  In   re  Charter  Acknowledgment,   28 

34  M(l.  316;  W.  B.  &  L.  Ash'u  v.  Colo-  Pa.  Co.  Ct.  Rep.  187. 

man,  89  Pa.  St.  428.  *  People  v.  Company,  97  Cal.  276  ;   32 

2  Humphreys  v.  Mooney,  5  Col.  282.  Pac.  236 ;   Hughe,-?   v.  Company,   34  Md. 
8  See  L.  O.A.  &  N.  Ry.  Co.  v.  Mason,  316;    Doyle   v.   .Mizner.  42  Mich.  332;  3 

16  N.  Y.  451.  N.  W.  968 ;  Kaiser  v.  Bank,  56  la.  104  ;  8 

♦  Trn.stee,  etc.  v.  Campbell,  46  La.  Ann.     N.  W.  772  ;    State  v.  Critchett,  37  Minn. 

1.^43:  21  So.  184.  13;  32  X.  W.  787. 

6  Stite  v.  Beck,  81  Ind.  500.  "  Shields  v.  Company,   94   Tcnn.    123, 

e  Griffen    t>.    Company,    Fed.    Caeea,     28  S.  \V.  668  ;  State  r.  Lee,  21  0.  St.  662  ; 

Simmings  v.  Association,  26  0.  St.  483. 

79 


§  72   INCOKPORATION   AND    ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

incorporators   were  personally  known  to  him  will  not  invalidate 
the  incorporation  proceedings.^ 

Even  where  the  statutes  require  the  organization  meetings  to 
be  held  within  the  domiciliary  State,  it  is  not  necessary  that  the 
articles  be  signed  and  acknowledged  therein,^ 

The  omission  of  immaterial  parts  of  the  acknowledgment  does 
not  operate  to  render  the  incorporators  liable  as  partners.  ^  In 
order  to  entitle  articles  to  be  filed  with  the  proper  State  official, 
they  must  be  signed  and  acknowledged  in  all  respects  as  required 
by  law.* 

§  72.  Publication  of  Articles.  —  In  ten  of  the  Commonwealths 
the  law  requires  that  either  the  petition  for  a  charter  or  the 
charter  itself  or  the  substance  thereof  shall  be  published  for  a 
prescribed  length  of  time.^  The  original  theory  upon  which  such 
requirements  are  based  appears  to  have  been  that  the  creation 
of  a  corporation  should  be  attended  with  all  possible  publicity, 
in  order  that  all  the  world  might  acquaint  itself  with  the  fact 
that  it  is  dealing  with  a  corporation  and  not  with  a  natural  per- 
son.*' At  the  present  time  the  legislatures  seem  to  proceed  on 
the  basis  of  furnishing  the  newspapers  with  additional  paid 
matter  on  the  theory  that  they  need  it  in  their  business. 
However  that  may  be,  it  still  remains  true  that  the  statutes 
governing  publication  of  articles  must  be  substantially  com- 
plied with,  otherwise  the  charter  may  be  declared  void  at  the 
instance  of  the  State." 

Sometimes  due  publication  of  articles  carries  with  it  immu- 
nity from  personal  liability.^ 

It  has  been  held  that  the  publication  of  more  than  the  law 
requires  will  not  invalidate  the  legality  of  the  publication.^ 

>  People    V.   Cheeseman,  7    Col.   376;  Bigelow  r.  Gregory,  73  111.  197;   Field  v. 

3  Pac.  716.     See  also  Boston  Acid  Mfg.  Cooks,  16  La.  Ann.   1.53;  Hunt  t;.  Salis- 

Co.  I'.  Moring,  15  Gray  (Mass.),  211.  bury,  55  Mo.  310;    Indianapolis  Min.  Co. 

2  Humphreys  f.  Mooney,  5  Col.  282.  v.   Herkimer,   46    lud.    142;     Holmes   v. 

3  Stout  V.  Zulick,  48  N.  J.  L.  599  ;  Gilliland,  41  Barb.  568  ;  Davenport  Nat. 
7  Atl.  362.  Bank  v.  Davis,  43  la.  424  ;  15  N.  W.  865. 

♦  Doyle   V.  Mizner,  42    Mich.  332  ;  3  ^  Davenport  Nat.  Bank  v.  Davis,  43  la. 

N,  W.  968;  Montgomery  v.  Forbes,   148  424;  15  N.  W.  865.     See,  however,  Clark 

Mass.  249 ;  19  N.  E.  342.  v.  Rich.ardson,  17  Ky.  Law  Rep.  514  ;  31 

6  See  Part  III.  Table  7,  page  577.  S.  W.  878;    Wing  r.  Slater,  19  R.  I.  597; 

6  See  In  re  Church,  etc.,  14  Phil.  121  ;  35  Atl.  302;  Heinig  v.  Company,  81  Ky. 

Beaton  v.  Grimm,  110  la.  145;  81  N.  W.  .300;  5  Ky.  Law  Rep.  281. 
225.  »  In  re  Sowego  Water  Co.,  38  W.  N.  C. 

"  Clegg  V.  Company,  61    la.   121  ;    15  (Pa.)  148. 
N.  W.  865  ;  Thornton  y.Balcom,  85  la.  198 ; 

80 


CHAP.  II.]  PROCURING  THE  CHARTER.  §  76 

§  73.  Affidavit  as  to  Stock  Subscriptions.  —  The  laws  of 
Florida,  Georgia,  Illinois,  Kansas,  Michigan,  Missouri,  Ohio, 
Oregon,  Pennsylvania,  South  Carolina,  Texas,  Utah,  Vermont, 
and  West  Virginia  require  in  addition  to  the  ordinary  ac- 
knowledgment of  the  execution  of  the  articles,  that  the  same 
be  accompanied  by  an  affidavit  showing  that  the  amount  of  stock 
required  by  law  as  a  preliminary  to  doing  business  as  a  corpo- 
ration has  been  duly  subscribed.^  The  same  matter  appears 
in  the  certificate  of  organization  required  in  Arkansas,  Con- 
necticut,  Indian  Territory,   Maine,  and  Virginia. 

On  the  other  hand,  the  incorporation  acts  of  Alabama,  Cali- 
fornia, Delaware,  Idaho,  Kentucky,  Nevada,  New  Jersey,  New 
York,  North  Carolina,  Ohio,  Virginia,  and  Washington  mei-ely 
require  that  the  amount  of  stock  subscriptions  be  set  forth  in  the 
articles. 

As  to  the  content  of  the  affidavits  as  to  stock  subscriptions,  it 
is  sufficient  if  they  serve  to  show  clearly  that  the  statute  rela- 
tive to  the  same  has  been  substantially  complied  with.^ 

Unless  the  statute  designates  some  officer  before  whom  such 
affidavit  be  sworn  to,  it  may  be  made  before  any  officer  authorized 
to  administer  oaths  and  to  certify  to  the  same.^ 

§  74.  Anti-Trust  Affidavit.  — •  Some  few  of  the  States  —  such,  for 
example,  as  South  Dakota,  Missouri,  and  Illinois  —  require  either 
of  the  incorporators  before  organization  or  of  certain  designated 
officers  of  the  corporation  after  organization  that  they  certify 
and  make  oath  to  the  effect  that  the  corporation  is  organized  for 
the  transaction  of  a  lawful  business  and  not  for  the  purpose  of 
enabling  the  corporation  to  violate  the  provision  of  the  anti-trust 
act  in  force  in  that  particular  Commonwealth.  Just  what  prac- 
tical purpose  the  requirements  here  referred  to  serve,  it  would 
be  difficult  to  say.  In  its  practical  operation  it  is  usually  a  mere 
formality,  and  has,  so  far  as  observation  goes,  seldom  served  any 
useful  purpose.* 

§  75.  Special  Requirements  in  Particular  States.  —  Owing  to 
the  varied  requirements  existing  in  the  several  States  and  Terri- 
tories relative  to  the  steps  necessary  to  procure  charters  under 

!•  People  V.  Company,  43  Cal.  30C.  O.  St.  668  ;  32  N.  K.  933  ;  People  v.  Com- 

2  People  I'.  Compaiiy,  4.5  Cal.  306;    B.  pany,  121  N.  Y.  582;  24  N.  K.  834;  State 

&  P.  Ry.  Co.  V.  Hatch,  20  N.  Y.  157.  v.  Staii.lard   Oil    Co.,  49  O.  St.   137  ;   30 

8  Wood  V.  Bank,  9  Cowen,  194.  N.  E.  279. 
*  See  Ohio   St.   liy.   Co.   v.   State,  49 

6  81 


§  76    INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS.    [PART  I. 

the  laws  thereof,  it  will  be  impossible  to  do  more  than  merely 
refer  to  a  few  of  these  requirements  not  already  discussed. 
Under  the  statutes  of  some  of  the  States  it  is  necessary  before  a 
charter  can  issue  that  the  capital  stock  either  be  subscribed  for 
in  whole  or  in  part.^  In  others  it  is  necessary  that  all  or  part 
of  the  authorized  capital  stock  be  actually  paid  in.^  However, 
in  many  of  the  States  it  is  not  necessary  that  the  capital  stock  be 
subscribed  for  as  a  condition  precedent  to  corporate  existence.^ 
Some  of  the  States  require  that  the  certificate  shall  show  the 
amount  of  the  capital  stock,  the  amount  actually  paid  in,  and 
that  it  shall  give  the  names  and  residences  of  the  shareholders, 
and  the  amount  of  stock  which  each  has  subscribed.  Where 
such  provisions  exist  substantial  compliance  therewith  is  essen- 
tial to  the  creation  of  a  de  jure  corporation.'* 

Sometimes  incorporation  acts  require  that  the  certificate  shall 
state  the  maximum  amount  of  indebtedness  which  the  corpora- 
tion is  authorized  to  incur.^  In  Indiana  the  articles  must  contain 
an  impression  or  description  of  the  seal.®  In  Georgia  charters 
are  issued  by  the  courts  upon  petition  therefor.  Here  as  well  as 
in  other  cases  the  statute  governing  the  matter  must  be  substan- 
tially complied  with.'^ 

In  some  States  the  law  requires  that  the  certificate  shall  set 
forth  the  name  and  location  of  the  principal  place  of  business  of 
the  corporation.  Such  provision  must  be  substantially  complied 
with.^ 

In  Pennsylvania,  where  the  incorporation  act  required  the 
application  for  a  charter  to  show  the  place  of  business  of  the 
proposed  corporation,  and  the  application  merely  stated  location 
of  its  office,  it  was  held  insufficient.  This  for  the  reason  that  a 
corporation  may  have  its  office  in  one  place  and  its  place  of 
business  in  another.^ 

§  76.  Powers  of  State  OfBcials  Relative  to  Accepting  or  Reject- 
ing Articles.  —  Where  the  statute  either  expressly  or  by  implica- 

1  J.  C.  G.  Company  v.  Dwight,  29  •  See  Vawter  v.  Franklin  College,  53 
N.  J.  Eq.  246 ;  Boyd  v.  Company,  90  Ta.     Ind.  88. 

St.  169.  ''  Van  Pelt  v.  Association,  79  Ga.  439  ; 

2  People  V.  Chambers,  42  Cal.  201.  4  S.  E.  501 ;  In  re  Deveaux,  54  Ga.  637. 

^  See  ante,  sec.  2.  *  Montgomery   v.    Forbes,    148    Mass. 

*  Hendrix    v.   Academy,    73   Ga.  437;  249;    19    N.   YZ.  342;    Ex  parte    Spring 

Boiling  j;.Le  Grand,  87  Ala.  482;  6  Sou. 332.  Valley  Works,  17  Cal.  132. 

»  Sweney  t'.  Talcott,  85   la.  103  ;    52  ^  In    re    Enterprise    Mutual    Benefit 

N.  W.  106. '  Ass'n,  10  Pa.  380. 

82 


CHAP.  II.]  PROCURING   THE   CHARTER.  §  7G 

tion  bestows  upon  State  oflFicials  the  duty  of  examining  articles 
of  incorporation  and  passing  upon  their  legal  sufficiency  and 
authorizes  State  officials  to  certify  that  the  incorporators  have 
become  a  corporation,  then  the  issue  of  such  certificate  becomes 
an  adjudication  that  the  corporation  has  been  duly  formed  until 
the  State  has  vacated  the  charter  by  proper  proceedings  taken  in 
the  courts.  1  Usually  this  duty  is  bestowed  upon  the  State  depart- 
ment which  is  a  branch  of  the  executive,  and  cannot  therefore 
pass  upon  questions  which  are  purely  judicial. ^  It  is  confined  to 
an  examination  as  to  whether  the  purposes  of  the  proposed  cor- 
poration are  legal  on  their  face  and  whether  conditions  precedent 
have  been  complied  with  so  that  a  charter  should  properly  issue.  ^ 

The  main  points  to  which  State  officials  should  address  them- 
selves in  passing  upon  corporation  papers  presented  to  them  are 
as  follows :  (1)  Have  the  requisite  number  of  incorporators 
signed  the  articles  of  incorporation  ?  (2)  Have  the  articles 
been  properly  acknowledged  by  the  incorporators  ?  (3)  Is  the 
corporate  name  mentioned  in  the  articles  one  that  can  be  law- 
fully used  by  the  proposed  corporation  ?  (4)  Have  the  statu- 
tory requirements  relative  to  the  contents  of  the  articles  of 
incorporation  been  substantially  com])licd  with?* 

Generally  speaking,  permission  to  file  charters  may  be  refused 
upon  the  following  grounds:  If  the  name  of  the  proposed 
corporation  is  identical  or  closely  resembles  that  of  an  existing 
corporation,  the  State  officials  may  exercise  their  discretion  and 
refuse  to  pass  the  charter.^ 

It  has  been  held,  however,  by  a  court  of  excellent  authority 
that  a  statute  prohibiting  the  corporation  from  assuming  a  name 
in  use  by  any  other  organization  or  so  closely  analogous  to  it  as  to 
mislead  the  public  is  designed  to  protect  domestic  corporations.^ 

1  Boyce  y.  M.  E.  Church,  46  M(l.  3.59  ;  Charter    St.    L.    Ass'n,    19    Pa.    County 

I).  II.  ]{.  II.  Co.  V.  Marsh,  Fed.  Caa.  4014.  Ct.  Rep.    S.") ;    In    re    DuQucsiie   College 

•M;riiiit)y    Co.    V.    Richards,    95     Mo.  Charter,    12   Pa.   County    Ct.    licp.  491; 

106;  8  S.   W.  246;   Van  Pelt  v.  Gardner,  Woodherry  v.  McClurg,  78  Miss.  831  ;  29 

:,i  Neb.  701  ;  75  N.  W.  874.  Sou.  514. 

8  P.    R.    T.    Rd.   Co.   Charter    Appli-  6  gtato  i-.  M(Grath.02  Mo.  S.W  ;  5  S.  W. 

cation,  20  Pa.  County  Ct.    Hep.   151;   N.  29;  American  Cliiy  Mfg.  Co.  r.  American 

M.  G.  T.  Co.  V.  N.  G.  T.  Co.,  21  I'a.  County  Clay  Mfg.  Co.,  198  P.i.  St.  189  ;  47  Atl. 

Ct.  Rep.  393  ;    People  v.  Company,  130  111.  936;  People  v.  Payne,  161  N,  Y.  229  ;  55 

268  ;  22  N.  E.  798.  N.  E.  849. 

*  State   V.  National  Inv.  Co.,  88   Wis.  «  Pcujde  v.  II.  L.   A.  Co.,   Ill    Mich. 

512;     fn   re    Application   for    Charter,    5  405 ;  69  N.  W.  653. 
Pa.  Dia.  Rep.  243 ;  In  re   Application  fur 

83 


§  78    INCORPOUATION   AND   OUGANIZATION    OP   CORPORATIONS,    [PART  I. 

Generally  speaking,  the  action  of  the  Secretary  of  State  in 
issuing  a  license  or  certificate  of  incorporation  is  ministerial. ^ 
Neither  State  officials  nor  the  courts  can  with  respect  to  incor- 
poration add  new  conditions  to  those  prescribed  by  statute. ^ 
Generally,  the  test  of  the  extent  of  powers  of  ministerial  offices 
is  the  right  to  compel  performance  by  mandamus.^ 

It  is  an  almost  universal  rule  that  after  the  certificate  is  once 
issued,  the  officer  who  issues  it  has  no  power  to  revoke  the  cer- 
tificate. For  this  purpose  application  must  ordinarily  be  made 
to  the  courts.* 

§  77.  Right  to  Mandamus  State  OfiQcials  for  refusing  to  file 
Articles.  —  Ordinarily  mandamus  is  the  proper  remedy  where 
State  officials  refuse  to  file  a  certificate  of  incorporation,  pro- 
vided the  duty  of  receiving  and  filing  the  same  is  lodged  with 
them.  ^ 

§  78.  Organization  Tax.  —  By  the  term  "  organization  tax,"  as 
here  used,  is  to  be  understood  the  amount  of  money  exacted  by  the 
State  from  individuals  in  return  for  a  grant  from  the  former  to 
the  latter  of  the  right  or  privilege  of  being  a  corporation  ;  tliat  is, 
of  doing  business  in  a  corporate  capacity  and  under  the  privilege 
or  franchise  which  when  incorporated  the  company  may  exercise. 
The  right  or  privilege  to  be  a  corporation  or  to  do  business  as  such 
body  is  one  generally  deemed  of  value  to  the  corporation,  which  is 
the  right  or  privilege  by  which  several  individuals  may  unite  them- 
selves under  a  common  name  and  act  as  a  single  person  with  a 
succession  of  members  without  dissolution  or  suspension  of  busi- 
ness and  with  a  limited  individual  liability.  The  grant  of  such  a 
right  or  privilege  rests  entirely  in  the  discretion  of  the  State,  and 
may  unquestionably  be  accompanied  with  such  conditions  as  the 
legi.slature  thereof  may  judge  most  befitting  to  its  interests  and 
policy. 

Thus  the  latter  may  require  of  the  incorporators,  as  a  condition 
to  the  original  grant  of  the  franchise  as  well  as  of  its  continued 
exercise,  that  the  corporation  pay  a  specific  sum  to  the  State.  ^ 

1  People  V.  C.  G.  T.  Co.,  130  111.  269;  ^  People  ex  rel.  N.  Y,  P.  Co.  v.  l^ice, 
22  N.  v..  798.  128  N.  Y.  59,  28  N.  E.  251 ;    H.  W.  I.  Co. 

2  Hastings  v.  A.  P.  Co.,  29  Wash.  22-t ;  v.  N.  Y.  II.  I.  Co.,  140  N.  Y.  94  ;  3.t  N.  E. 
69  Pac.  776.  417;   State   v.  Taylor,    55    0.    St.   61,  4+ 

3  F.  B.  Co.  V.  Wood,  14  Ga.  80.  N.  E.  513 ;'  State  v.  McGrath,  92  Mo.  355 ; 
*  See,  however,  I.  W.  C.  Co.  v.  Pear-     5  S.  W.  29  ;    IllinoiH  Watch  Case  Co.  v. 

son,  140  111.  423  ;  31  N.  E.  400;  In  re  N.  I.     Pearson,  140  111.  423  ;  31  N.  E.  400. 

E.  Co.,  142  Pa.  St.  450;  21  Atl.  879.  ^  Home  Insurance  Co.  v.  People  of  the 

84: 


CHAP.  II.]  PROCURING   THE   CHARTER.  §  78 

There  are  t^o  broad  grounds  for  sustaining  the  power  of  the 
State  to  impose  organization  taxes.  The  first  of  these  is  their  in- 
herent power  to  regulate  corporations.  Corporate  capacity  itself 
is  a  franchise.  No  persons  can  make  themselves  a  body  corporate 
and  politic  without  legislative  authority.^  The  other  ground  re- 
ferred to  is  the  inherent  power  of  the  State  to  enact  such  legislation 
as  may  be  necessary  in  order  to  raise  revenue  for  State  purposes. ^ 

The  term  "organization  tax"  should  be  carefully  distinguished 
from  the  phrase  "  franchise  tax  ;  "  the  latter  referring  to  the  tax 
imposed  by  the  State  upon  corporations  for  the  privilege  of  doing 
business  in  a  corporate  capacity  after  incorporation.  All  of  the 
States  and  Territories  with  the  exception  of  Arizona,  Arkansas, 
District  of  Columbia,  Georgia,  Indian  Territory,  Louisiana,  and 
Oklahoma,  impose  graduated  organization  taxes  upon  corporations 
organized  under  their  laws.  There  can  be  no  question  as  to  the 
validity  of  such  graduated  taxation.^  The  same  is  true  even 
when  in  such  matters  the  legislature  distinguishes,  as  is  the  case 
in  West  Virginia  and  New  Hampshire,  between  resident  and  non- 
resident domestic  corporations.* 

At  the  present  time  it  is  a  rule  of  almost  universal  application 
that  the  payment  of  an  organization  tax  is  a  condition  precedent 
to  corporate  existence.^  Organization  taxes  cannot  be  evaded  on 
the  ground  that  the  corporation  calls  itself  an  "  eleemosynary  " 
corporation  when  in  fact  it  is  otherwise.^ 

Tlie  State  is  not  bound  to  permit  corporations  to  consolidate  or 
to  extend  their  corporate  existence,  and  for  this  reason  it  may 
lawfully  impose  the  payment  of  an  organization  tax  as  a  condition 
precedent  to  consolidation  or  to  the  extension  of  its  corporate 
existence.'^ 

State  of   New  York,   134   U.  S.   594;  10  <  B.  J.  C.  C.  Co.  v.  Scherr,  50  W.  Va. 

S.    rt.    59-5;   33    L.    E.    1025;  Gordon   v.  533;  40  S.  E.  514. 

Appeal  Tax  Court, 44  U.S.  (3  IIow.)  133;  *  Union    Horseshoe   Works   i'.   Lewis, 

1 1  Law  Ed.  529 ;  B.  &  O.  Ky.  Co.  i'.  Mary-  1    Al.l).    (U.    S.)    518;    Fed.    Cases,    No. 

lan.i,  88   U.  8.  (21   Wall  )  456;  22  L.  E.  14383;  Comhined  Saw  &  Planer  Co.   v. 

678;  People  u  Ro.se.  210  111.  582 ;  71  N.  E.  Fluurnoy,   88  Va     1029;   14    S.    E.    976; 

5H0.  Edwards  v.  Denver  &  K.  G.  R.  Co.,  13  Col. 

1  California  v.  Company,  127  U.  S.  1  ;  59;  21  Pac.  1611  ;  State  v.  Rotwitt.  17 
8  S.  Ct.  1073  ;  32  L.  E.  157.  Mont.  41  ;  41  Pac.  1004  ;  Ashley  v.  Hy.an, 

2  Baker  »;.'  Cincinnati,  11  O.  St.  5.34;  49  O.  St.  .504;  31  N.  E.  721  ;  II.  M.  Co. 
W.    U.  T.   Co.  V.   Attornev-General,  125  v.  Bremer,  12  K.  1.491. 

U.  S.  5.30;  8  S.  Ct.  961  ;  si  L.  E.  790.  «  State   v.    Lcsueur,   99    Mo.    552;  13 

3  See   Ashlev  '•.  Hvan.  49  O.  St.  .504;     S.  W.  237. 

31   N.   E.  721  ;'l53   U.  S.  436;   14  S.  Ct.  ^  A.sliley   v.   Ryan,  49  O.   St.  504;    31 

865;  38L.  E.  773.  N.    E.   721;    153    U.    S.   436;    14    S.    Ct. 

85 


§  80   INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

§  79.  Form  in  which  Charter  is  granted.  —  In  only  twcnty-nine 
of  the  States  do  the  corporation  acts  expressly  provide  for  the 
issuance  of  a  certificate  of  incorporation  or  charter  by  State 
officials.  In  some  few  of  the  remainder  the  power  to  issue  such 
instrniucnts  is  assumed  by  the  officers  having  the  matter  in  charge 
without  any  express  authorization  therefor  in  the  statute.  In  the 
remaining  States  proof  of  incorporation  is  usually  had  by  pro- 
curing certified  copies  of  the  articles  of  incorporation.  The  mat- 
ter becomes  one  of  practical  importance  in  connection  with  the 
right  of  third  parties  to  collaterally  attack  not  only  the  corporate 
existence  but  the  corporate  purposes  and  powers  as  well.  This 
matter  has  already  been  discussed  at  length  in  a  previous  section.^ 

Ordinarily  the  commencement  of  corporate  existence  dates 
from  the  time  when  the  certificate  of  incorporation  is  issued. 
Where  the  statute  expressly  provides  for  the  issuance  of  a  charter 
by  State  officials  the  latter  have  no  discretion  in  the  matter,  and 
must  issue  the  same  upon  demand  of  the  parties  who  have  legally 
entitled  themselves  to  the  same.^  The  certificate  must  be  issued 
immediately,  and  must  be  in  the  form,  if  any,  prescribed  by  the 
statute.^  The  Secretary  of  State  should  always  affix  his  seal  to 
the  certificate  of  incorporation.* 

§  80.  Filing  and  Recording  in  Local  County  Offices.  —  Generally 
speaking,  it  is  part  of  the  plan  adopted  by  the  various  legislatures 
in  the  enactment  of  general  incorporation  acts,  to  provide  in 
addition  to  requiring  that  articles  of  incorporation  be  filed  with 
some  designated  State  official,  that  they  always  be  filed  in  one 
or  more  local  county  offices.^  Usually  the  latter  requirement  is 
confined  to  the  provision  that  they  be  filed  in  the  county  where 
the  corporation's  domiciliary  office  is  located.  However,  in  some 
few  of  the  States  such  articles  must  be  filed  in  every  county 
wherein  the  corporation  transacts  its  business  or  holds  real 
property.  In  some  of  the  States,  such  as  California  and  Maryland, 
more  importance  appears  to  be  attached  to  the  filing  of  the  articles 
in  the  local  county  office  than  with  State  officials.^ 

865;  38  L.  E.  773;  People  v.  Pfister,  57  Ass'n  v.  Clarke,  61  Me.  351;    Sparks  v 

Cal.  532.  Company,  87  Ala.  294;  6  So.  195  ;  People 

1  See  ante,  §  G.  v.  Pavn,"l61  N.  Y.  229;  55  N.  E.  849. 

2  State  ('.  Taylor,  55  0.  St.  61  ;  44  N.  E.  *  Benner  v.  State,  7  Lea  (Tenn.),  682. 
513  ;  Sparks  r.' Company,  87  Ala.  294  ;  6  6  See  Part  III.  Table  4,  page  574. 

So.  195.  6  See  N.  H.  C.  &  M.  Co.  v.  Woodberry, 

3  Stowe  V.  Flagg,  72    111.  397;  R.  F.     14  Cal.  434. 

86 


CHAP.  II.]  PROCURING   THE   CHARTER.  §  81 

The  purpose  of  filing  articles  in  county  offices  has  been  said  to 
be  in  order  that  persons  dealing  with  the  corporation  may  have  an 
easy  and  public  inspection  of  the  basis  of  its  corporate  organi- 
zation.^ With  some  few  exceptions  corporate  existence  is  not 
made  to  depend  upon  the  filing  of  the  articles  in  the  local  county 
offices.  In  any  event,  where  such  filing  is  not  had,  the  corporation 
is  treated  as  a  corporation  de  facto,  if  not  de  jure.^  The  fore- 
going is  certainly  true  in  the  absence  of  any  proceedings  by  the 
State  in  the  nature  of  quo  ivarranto.^ 

In  some  States  the  filing  of  articles  in  designated  offices  is 
specifically  made  a  condition  precedent  to  the  legal  existence  of 
the  corporation,  while  in  others  it  is  merely  made  a  condition 
precedent  to  the  right  of  the  corporation  to  engage  in  business  as 
such.*  It  has  been  held,  however,  in  Missouri  that  in  order  to 
the  creation  of  corporate  existence  articles  must  be  filed  in  both 
State  and  county  offices.^ 

At  the  present  time  it  is  safe  to  say  that  as  to  third  parties  the 
validity  of  corporate  existence  will  be  presumed  even  when 
articles  have  not  been  filed  in  local  county  offices  as  required. 
But  in  some  jurisdictions  attempts  have  been  made  to  hold  the 
incorporators  liable  as  partners  under  such  conditions.^ 

§  81.  Distinction  bet^veen  de  jure  and  de  facto  Corporations.  —  A 
corporation  de  jure  is  one  whose  right  to  exercise  corporate 
functions  would  prove  invulnerable  if  assailed  by  the  State  in  quo 
warranto  proceedings.'^  A  de  facto  corporation,  on  the  other  hand, 
is  one  the  legality  of  whose  existence  may  be  inquired  into  by  the 
State  in  quo  warranto  proceedings.  The  general  rule  is  that  to 
prove  tiie  existence  of  a  corporation  de  facto  it  is  necessary  to 

1  Loverin  i-.  McLauKhlin,  IGl  111.  417;  N.  W.  105C;  hi  re  Shakopce  Mfg.  Co.,  .37 
44  N.  E.  99.  xMinn.  91  ;  33  N.   W.  219  ;  G.  M.  &  S.  Co. 

2  Curtis  V.  Tracey,  62  111.  Ap.  49  ;  B.  v.  I^ichards,  95  Mo.  106 ;  8  S.  W.  246. 
&  T.  Co.  V.  Gade,  55   111.   181;   Johns  v.  6  Hurt  i;.  Sali.sbury,  55  Mo.  310. 
People,  25  Mich.  499  ;  Whitney  o.  Wynian,          "  See  P.  &  G.  T.  Co.  v.  Bobh,  88  Ky. 
101  U.  S.  392.  226;  10  R.  W.  794;  Ra.s.sbeck  v.  Deste'r- 

'  Bank  1^.  Davies,  43  Iowa,  424  ;  Martin  richer,    55    How.    Pr.    516;  4    Alib.    Nuw 

V.  Deetz,  102  Cal.  55  ;  36  Pac.  368 ;  I.  T.,  Ca.sea,444  ;  F.  G.  B.  &  T.  Co.  r.  Gade,  55 

etc.  Co.  V.  Herkimer,  46  Ind.   142;  Hum-  111.    181;    N.   Y.    N.   Exchange    Bank    v. 

phreys    v.    M«xjnoy,   .S   Col.   282;  Sim.s   ;•.  Crowell,  177  Pa.  313 ;  35  Atl.  613  ;   Clegg 

Commonwealth,  24  Ky.  L.  Kep.   159;  71  v.  Company,  61    la.   121;   15  N.   W.   865; 

S.  W.   929;    Childs  »,'.'Hurd,  32  W.  Va.  Grnl  r.  cdmpany,  107  111.  652;  Childsy. 

66;  9  S.  E.  362;  Abbott  v.  Co.,  4  Neb.  Hurd.  32  W.  Va"66;  9  S.  E.  362. 

416.  ^  Clapp  V.  Company,  40  Neb.  470;  28 

*  Bergeron  v.  Hobbs,  96  Wis.  641  ;  71  N.  W.  956. 

87 


§  8*2      INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.     [PART  I. 

show  (1 )  ail  act  authorizing  the  creation  of  a  corporation  of 
that  character;  (2)  an  application  duly  made  thereunder  by 
the  rccpiisite  number  of  incorporators  praying  for  incorporation. 
(3)  It  is  sometimes  necessary,  although  not  always,  to  show 
user  thereunder.^ 

§  82.  Right  of  Parties  other  than  the  State  to  collaterally  im- 
peach Corporate  Existence.  — The  right  here  referred  to  has  already 
been  considered  somewhat  at  length  in  connection  with  a  discus- 
sion of  the  right  of  third  parties  to  collaterally  attack  corporate 
purposes  and  powers.^  There  are  some  additional  matters, 
however,  not  already  discussed  to  which  attention  will  now  be 
called. 

As  has  already  been  suggested,  the  courts  have  taken  varied 
and  conflicting  views  relative  to  the  right  of  parties  other  than 
the  State  to  collaterally  attack  the  existence  of  a  corporation  with 
whom  they  chance  to  be  involved  in  litigation.  The  diverging 
views  here  referred  to  may  be  classified  as  follows :  (1)  the  view 
that  the  State  alone  can  test  the  question  whether  or  not  a  corpo- 
ration which  has  procured  a  charter  from  the  proper  State  officials 
is  in  law  as  well  as  in  fact  a  corporation  ;^  (2)  the  view  that  this 
question  may  be  inquired  into  by  third  parties,  but  that  it  is  suffi- 
cient in  such  cases  for  the  corporation  to  show  substantial  com- 
pliance with  the  conditions  prescribed  by  the  general  incorporation 
act  in  order  to  prove  that  it  is  a  corporation  de  jure  as  well  as  de 
facto  ;^  (3)  the  view  that  the  matter  may  be  inquired  into  by  third 
parties,  and  that  under  such  circumstances  it  is  necessary  that  the 
corporation  shall  show  strict  compliance  with  each  and  every  con- 
dition precedent  prescribed  by  the  general  incorporation  act  in 
order  to  establish  the  fact  that  it  is  a  corporation  de  jure  as  well 
as  de  facto. ^ 

For  purpose  of  convenience  these  three  diverging  views  may  be 

1  Stout  V.  Zulick,  48  N.  J.  Law,  599  ;  7  Co.,  157  111.  641  ;  42  N.  E.  153  ;  In  re  Gibbs 

Atl.  362  ;  Haas  v.  Bank,  41  Neb.  754  ;  60  Estate,  157  Pa.  St.  59  ;  27  Atl.  383. 

N.  W.  85;  Duggan  v.  Company,  11   Col.  ^  See  ante,  §  6. 

113;  17  Pac  105  ;  Central  Ag.,etc.  Ass'n  v.  ^  See  ante,  §  6. 

Company,  70  Ala.  120;  Baker  v.  Backus,  ^  Jones  v.   Company,  21  Col.  263;  40 

32  111.  79;  Hughes  v.  Bank,  5  Litt.  (Ky.)  Pac.  457  ;    Stout   v.   Zulick,  48    N.  J.  L. 

45;    Buffalo,  etc.    Ry.    Co.   v.    Cary,   26  599;  7  Atl.  362 ;  Finnegan  ?;.  Noereuberg, 

N.  Y.  75;   Finnegan'  v.    Noerenberg,  52  52  Minn.  239;  53  N.  W.  1150. 

Minn.  239;  53  N.  W.  11.50;  Continental  ^  Mokelumue,   etc.  Co.  v.  Woodbury, 

Trust  Co,  V.  T.,  etc.  Ry.  Co.,  82  Fed.  642  ;  14  Cal.  424  ;  Lucaa  v.  Bank,  2  Stew.  (Ala.) 

City  of  Guthrie  v.  Territory,  1  Okla.  188;  147. 
31  Pac.  190;  A.  L.,  etc.  Co.  v.  M.,  etc.  R. 

88 


CHAP.  II.]  PROCURING   THE    CHARTEIJ  §  82 

distinguished  as  follows :  referring  to  the  first  as  to  the  true,  the 
second  as  the  substantial  compliance,  and  the  third  as  the  strict 
compliance  rule.  Space  will  permit  of  discussion  here  of  only 
the  first  of  the  rules  just  referred  to. 

The  legislatures  alone,  as  has  been  shown,  can  create  a  corpora- 
tion. Under  the  modern  practice  these  bodies  have  passed  general 
incorporation  acts  entrusting  the  execution  of  the  law  to  the 
executive  department  of  the  government.  Under  the  rule  now 
generally  established,  either  by  statute  or  judicial  construction, 
in  most  of  the  States  a  corporation  becomes  a  corporation  de  facto 
from  the  moment  the  charter  or  certificate  of  incorporation  is 
issued  by  the  proper  State  authorities.^  The  basis  of  holding 
such  certificates  as  conclusive  of  corporate  existence  as  against 
all  the  world  except  the  State  is  that  where  by  reason  of  such 
certificate  a  corporation  is  held  out  to  the  world  as  ready  to  under- 
take business,  most  disastrous  consequences  would  follow  to  com- 
mercial undertakings  if  any  private  person  was  allowed  to  go  back 
and  enter  into  an  examination  of  the  circumstances  attending  the 
original  incorporation.^ 

The  power  which  creates  the  corporation  it  is  needless  to  say 
should  alone  have  the  power  to  take  it  away.  It  should  not  be 
permitted  to  parties  other  than  the  State  for  this  reason  to  col- 
laterally impeach  corporate  existence,  for  to  permit  such  impeach- 
ment would  be  in  legal  effect  to  permit  third  parties,  for  the 
purpose  at  least  of  that  particular  action,  to  destroy  the  effect 
of  the  previous  action  of  the  State  in  the  premises.  On  grounds 
of  public  policy  as  to  all  parties  but  the  State,  it  should  under 
such  circumstances  be  conclusively  presumed  that  the  statutory 
requirements  relative  to  incorporation  have  been  duly  complied 
with.'"^  A  corporation  must  of  necessity  be  presumed  to  be 
riglitfullv  in  possession  of  tlu;  francliise  and  rightfully  exercis- 
ing the  power  which  the  legislative  grant  confers.  Individual 
right  is  not  invaded  if  the  ]iresum|»tion  is  true  in  fact  and  there 
is  no  usurpation.  It  is  the  State  —  the  sovereign  —  whose 
rights  are  invaded  and  whose  autliority  is  usurped.  Tlic  in- 
dividual could  not  create  the  cor|)orati()n,  could  not  grant,  define, 
or  limit  its  powers;  any  grant  of  these  l>y  the  sovereign  cannot 

1  See  ante.,  §  6.  ^  Tnr  Kivcr  Nav.  Co.  v.  Xeal,  3  Ilawks 

2  Lake   Superior  Co.  v.  Morrison,  22     (N.  C),  ."iUO ;   Welch  i;    Bank,  122  N.  Y. 
Canada  C.  P.  224.  1"  ;  25  N.  E.  209. 

89 


§  83    INCORPORATION  AND   ORGANIZATION    OP   CORPORATIONS.   [PART  I. 

lessen  his  riglit.  There  can  consequently  be  no  cause  of  com- 
plaint by  the  citizen,  and  no  right  to  inquire  whether  the  corpo- 
rate existence  is  rightful,  de  jure,  or  merely  colorable.^ 

Corporations  may  exist  cither  de  jure  or  de  facto.  If  of  the 
latter  class,  they  arc  under  the  same  protection  of  the  law  and 
governed  by  the  same  legal  principles  as  those  of  the  former  so 
long  as  the  State  acquiesces  in  their  existence  and  exercise  of  cor- 
porate functions.  A  private  citizen  whose  rights  are  not  invaded 
and  who  has  no  cause  of  complaint  has  no  right  to  inquire  col- 
laterally into  the  legality  of  its  existence.  This  can  only  be  done 
in  a  direct  proceeding  on  the  part  of  the  State  from  whom  is  de- 
rived the  right  to  exist  as  a  corporation  and  whose  authority  is 
usurped.^ 

A  corporation  de  facto  may  legally  do  and  perform  every  act 
and  thing  which  the  same  entity  could  do  and  perform  were  it  a 
de  jure  corporation.  As  to  all  the  world  except  the  paramount 
authority  under  which  it  acts  and  from  which  it  receives  its 
charter,  it  occupies  the  same  position  as  though  in  all  respects 
valid,  and  even  as  against  the  State,  except  in  direct  proceedings 
to  arrest  its  usurpation  of  powers,  its  acts  are  to  be  treated  as 
efficacious.^ 

Finally,  it  may  be  observed  that  the  principle  here  contended 
for  has  been  held  by  at  least  one  court  to  be  applicable  to  a  case 
where  a  corporation  had  incorporated  under  an  unconstitutional 
law,  yet  nevertheless  the  validity  of  the  corporation's  existence 
could  not  be  collaterally  attacked,  as  it  had  been  chartered  by  the 
implied  consent  of  the  State.* 

§  83.  Right  of  State  to  attack  Corporate  Existence  in  Direct 
Proceedings.  —  This  section  has  reference  only  to  actions  brought 
by  the  State  for  the  purpose  of  testing  the  legality  of  corporate 
existence  where  it  is  alleged  that  there  has  been  a  failure  on  the 
part  of  the  incorporators  to  perform  all  the  conditions  prescribed 
by  statute  as  a  precedent  to  corporate  existence.  The  action  here 
referred  to  is  that  of  quo  warranto,  which,  even  in  the  absence  of 
statutory  provision,  may  be  maintained  at  common  law  in  behalf 
of  the  State  against  incorporators  who  assume  to  exercise  corpo- 

^  Lehman  v.  "Warner,  61  Ala.  455.  ^  People  v.  LaRue,  67  Cal.  526  ;  8  Pac. 

*  Snifler'8  Sons'  Co.  v.  Troy,  91  Ala.  84. 
224;  8  So.  658;    Tar  River  Nav.  Co.  v.  *  Richards  v.  Bank,  75  Minn.  196;  77 

Neal,  3  Hawks  (N.  C),  520.  N.  W.  822. 

90 


CHAP.  II.]  PROCURING   THE   CHARTER.  §  83 

rate  powers  witliout  being  legally  incorporated,  for  the  purpose  of 
ousting  them  from  the  exercise  of  such  powers.^ 

In  all  such  proceedings  as  against  the  State  not  merely  a  de 
facto  corporate  existence  must  be  shown,  but  a  de  jure  existence 
as  well.  The  general  prevailing  view  at  the  present  time  seems 
to  be  that,  as  against  the  State  in  such  proceedings,  it  is  necessary 
to  show  a  specific  statute  authorizing  the  creation  of  corporations 
of  the  character  of  the  one  against  which  the  quo  warranto  pro- 
ceedings are  brought,  and  also  substantial  compliance  in  the 
preliminary  organization  of  the  corporation  with  all  conditions 
precedent  prescribed  by  statute.^ 

In  quo  ivarranto  proceedings  the  burden  of  proof  is  upon  the 
corporation  to  show  that  it  has  been  legally  incorporated.^  In 
the  proceedings  of  the  character  referred  to  it  has  been  well  said 
that  "  public  policy  demands  that  the  power  to  oust  de  facto  cor- 
porations from  the  exercise  of  corporate  powers  because  of  failure 
to  comply  substantially  with  conditions  precedent  be  sparingly 
exercised."  * 

Were  the  rule  otherwise,  disastrous  consequences  would  follow 
in  the  commercial  world,  and  in  all  such  cases  the  courts  should 
take  extraordinary  care  to  see  that  the  rights  of  third  parties  are 
fully  protected.  In  proceedings  brought  by  the  State,  the  most 
im[)ortant  matter  to  be  looked  at  is  whether  there  has  been  a 
failure  on  the  part  of  the  incorporators  to  comply  with  the  pro- 
visions of  the  statute,  which  are  merely  directory  as  opposed  to 
those  that  are  mandatory.  A  "  directory  "  provision  is  one  which 
the  legislature  did  not  intend  as  essential  to  corporate  existence, 
and  the  failure  to  comply  with  which  is  a  mere  irregularity  and  is 
not  fatal  to  corporate  existence.  A.  "mandatory"  provision,  on 
the  other  hand,  is  one  which  must  be  substantially  complied  with 
in  order  to  create  a  corporation  de  jure.^  Whether  the  particular 
provision  of  the  statute  is  directory  or  mandatory  is  to  be  deter- 
mined by  "the  intention  and  true  meaning  of  the  legislature 
deduced  from  the  act  and  sometimes  aided  by  other  acts  in  pari 

1  Greene   v.   People,  150   111.  513  ;  37  »  People  v.  Lowden  (Cal.),  8  Pac.  6G. 
N.  E.  842.  *  Dufrgan  v.  Company,  11   Colo.  113; 

2  State  V.  Webb,  97  Ala.  Ill  ;  12  So.     17  Pac.  105. 

377;   People   v.    Selfridge,    52    Cal.   331;  *  Xewcomb   v.    Reed,    12    Allen,  302; 

State  V.  Critchett,  37  Minn.  13  ;  32  N.  W.  B.  W.  S.  Co.  v.  Inhabitants  of  Braintree, 

787;  Holman    i;.    State,   105  Ind.   569;  5  146  Mass.  482;  16  N.  E.  420. 
N.  E.  702. 

91 


§  84  iNronroRATioN  and  organization  of  corporations,   [part  I. 

materid  and  extraneous  circumstances."  ^  Even  as  against  the 
State  it  is  only  necessary  that  a  mandatory  provision  shall  be 
substantially  complied  with,^ 

§  84.  "When  doea  Corporate  Existence  commence  ?  —  Where  the 
statute  provides,  as  it  does  in  some  of  the  Commonwealths,  that 
the  articles  of  incorporation  shall  be  filed  with  State  officials  or 
in  some  local  county  office  or  both,  the  general  rule  is  that  the 
corporate  existence  dates  from  the  time  of  filing  of  the  articles 
with  such  officials  and  not  from  the  time  it  begins  to  do  business.^ 
The  foregoing  seems  to  be  the  rule  in  force  in  the  majority  of 
States.  Some  of  the  States,  however,  provide  by  statute  as 
to  when  corporate  existence  shall  commence,  as,  for  example, 
Alabama,  California,  Colorado,  Connecticut,  Delaware,  Idaho, 
Iowa,  Kansas,  Kentucky,  Maine,  Massachusetts,  Michigan,  Mis- 
sissippi, Missouri,  Montana,  Nebraska,  Nevada,  New  Hampshire, 
New  Jersey,  New  York,  North  Dakota,  Ohio,  Pennsylvania,  Rhode 
Island,  South  Carolina,  South  Dakota,  Tennessee,  Texas,  Utah, 
Virginia,  "Washington,  "West  Virginia,  Wisconsin,  and  Wyoming.* 
In  a  number  of  the  States  corporate  existence  depends  not  merely 
upon  filing  articles  with  the  Secretary  of  State,  but  also  upon  filing 
the  same  in  the  local  recording  office  of  the  county  where  the 
princi[)al  place  of  business  of  the  corporation  is  to  be  located, 
as,  for  example,  in  Arizona,  California,  Colorado,  Delaware, 
Idaho,  Maryland,  Montana,  New  Jersey,  Utah,  and  Wisconsin. 
In  some  few  of  the  States  the  statute  by  reason  of  its  peculiar 
provision  seems  to  contemplate  the  corporate  existence  shall  com- 
mence before  the  filing  of  articles  of  incorporation  with  any 
official,  either  State  or  county  ;  this  for  the  reason  that  the 
certificate  required  to  be  filed  with  such  officials  must  be  signed 
by  corporate  officers.  States  to  which  reference  is  here  made  are 
Arkansas,  Illinois,  Indian  Territory,  Maine,  Massachusetts,  Michi- 
gan, and  Missouri. 

1  Cross  V.  Company,  17  111.  54;  Eak-  3  Hanna  v.  Company,  23  0.  St.  622; 
right  V.  Company,  13  Ind.  404;  Newcomb  G.  M.  &  S.  Co.  i;.  Richards,  95  Mo.  106;  8 
V.  Reed,  12  Allen,  362.  S.  W.  246  ;  Humphreys  v.  Mooney,  5  Colo. 

2  People  V.  Company,  97  Cal.  276  ;  32  293  ;  V.  C.  Railway  Co.  v.  Clayes,  21  Vt. 
Pac.  236  ;  State  v.  White,  13  Mo.  Appeals  30  ;  Borough  of  Braddock  v.  Company,  189 
139;  People  v.  Cheeseman,  7  Colo.  376;  Pa.  379;  42  Atl.  15;  Badger  Paper  Co. 
3  Pac.  716:  Newcomb  v.  Reed,  12  Allen,  v.  Rose,  95  Wis.  45;  70  N.  W.  302;  Hunt 
362;  Eakright  v.  Company,  14  Ind.  404;  v.  Company,  11  Kan.  412. 

Walworth  v.  Bracket,  19  Mass.  98;  B.  W.         *  See  Part  II.,  Synopsis-Digest  of  the 

S.  Co.  V.  Inhabitants   of   Braintree,  146  Corporation  Laws  of  the  several  States 

Mass.  482  ;  16  N.  E.  420.  and  Territories. 
92 


CHAP.  II.]  PROCURING   THE    CHARTER.  §  84 

There  seems  to  exist  in  some  jurisdictions  the  theory  that  in 
the  matter  of  determining  when  the  corporate  existence  com- 
mences reference  must  be  had,  first,  to  the  primary  franchise  of 
being  a  corporation  vesting  in  the  incorporators  and  next  to  the 
secondary  franchise  to  do  certain  specific  acts  which  vests  in  the 
corporation.^  Again,  in  some  States,  while  filing  articles  of  incor- 
poration constitutes  a  condition  precedent  to  the  creation  of  cor- 
porate existence,  it  is  also  a  condition  precedent  to  the  right  of 
doing  business.^ 

Ordinarily  corporate  existence  docs  not  commence  until  all  con- 
ditions precedent  are  performed.^  There  is  a  very  obvious  distinc- 
tion between  such  acts  as  are  declared  to  be  necessary  steps  in  the 
process  of  incorporation  and  such  as  are  required  of  the  individ- 
uals seeking  to  become  incorporated,  but  which  are  not  made 
prerequisites  to  the  assum))tiun  of  corporate  powers.  With  respect 
to  the  former  any  material  omission  will  be  fatal  to  its  existence 
as  a  corporation  de  jure,  as  against  the  State.  In  respect  to  the 
latter,  failure  to  comply  therewith  is  not  ordinarily  accompanied 
by  forfeiture  of  its  charter  powers,  but  rather  goes  to  the  question 
of  the  personal  liability  of  the  individuals  who  attempt  to  do 
business  as  a  corporation  Avithout  having  complied  with  all  the 
conditions  subsequent.^ 

Corporate  existence  in  this  immediate  connection  ordinarily 
means  full  authority  to  transact  business  as  such  in  contradis- 
tinction to  the  qualified  existence  of  such  corporations  which  dates 
from  the  time  of  filing  the  articles  of  association  with  the  Secre- 
tary of  State.^  So  too,  in  those  States  where  organization  precedes 
the  filing  of  a  certificate  of  incorporation,  it  has  been  held  that  a 
corporation  has  a  qualified  existence  from  the  date  of  the  incor- 
porators' first  meeting.' 

In  Illinois  corporate  existence  does  not  commence  until  the 
reception  of  a  license  from  the  Secretary  of  State  to  take  stock 

1  State  V.  Water  Co.,  61  Kan.  547;  60  7'a.  St.  379;  42  Atl.  1.5;  Badger  Paper 
Pac.  337.  Co.  v.  Hose,  O.'j  Wis.  M.'i;   70  N.  W.  302. 

2  Ga<io  V.  Company,  16.'j  111.  367;  46  ^  lierrod  v.  Ilanier,  32  Wis.  162;  K. 
N.  E.  286;  Martin  v.  Deetz,  102  Cal.  55;  G.  L.  Co.  v.  (Jrccn.  46  N.  A.  Kq.  118;  18 
36  Pac.  368  ;  In  re  S.  M.  Co.,  37  Minn.  91  ;  Atl.  844  ;  M.  H.  M.  Co.  v.  Woo.ll.ury,  14 
33  N.  W.  219  ;  Johns  i-.  People,  25  Mich.  Cal.  424. 

499;  G.  M.  &  S.  Co.  0.  Richards,  95  Mo.  ''  Hurt  v.  Salisbury,  55  Mo.  .tio. 

106;  8  S.  W.  246.  ^  ^-  C  &  P.  Co.  y.  Scholfield,  70  Conn. 

»  Afferton    v.  Company,  67   Ind.  .334;  500;  40  Atl.  182. 
Boroiif^li   of  Braddock  v.  Company,  189 

93 


§  84   INCORPORATION  AND    ORGANIZATION   OF   CORPORATIONS.     [PART  I. 

subscriptions.^  It  would  of  course  follow,  from  the  necessities  of 
the  case,  that  before  a  corporation  can  contract  as  such,  it  must 
have  a  full  ami  complete  organization.^  While  ordinarily  such 
organization  is  not  necessary  to  the  commencement  of  corporate 
existence,  it  is  sometimes  made  so  by  statute.^ 

1  Stowe  v.  Flag£r  <"'  a!.,  72  111.  397  ;  Cur-  O.  St.  328  ;  U.  R.  Co.  v.  Ilolden,  63  N.  C. 
ran  v.  Braduer,  27  111.  Ap.  582.  410;  Teitig  v.  Boesman,   12  Mout.  404; 

2  Gent  V.  Company,  107  111.  6.52.  31  Pac.  371. 

3  A.  &  N.  T.  lly.   Co.  V.  Smith,    15 


94 


CHAP.  III.]  ORGANIZATION   AFTER  INCORPORATION.  §  85 


CHAPTER   III. 
ORGANIZATION  OF  CORPORATIONS  AFTER  INCORPORATION. 

§  85.  The  Incorporators'  Organization  Meeting.  —  That  a  cor- 
poration shall  have  a  full  and  complete  organization  and  existence 
as  an  entity  before  it  can  enter  into  any  kind  of  contract  or 
transact  any  business,  would  seem  to  be  self-evident.  A  corpora- 
tion until  organization  has  no  franchises  or  faculties.  Its  exist- 
ence before  is  but  a  qualified  existence.  Its  powers  are  limited 
for  the  time  being  to  the  right  to  organize  itself  into  an  active 
corporate  organization,  and,  as  we  have  seen,  those  engaged  in 
bringing  it  into  being  have  no  power  to  bind  it  by  contract  unless 
80  authorized  by  the  charter.  Until  organization  as  authorized 
by  the  charter,  it  does  not  possess  the  right  to  exercise  its  cor- 
porate functions,  nor  has  it  a  valid  existence  for  all  purposes.^ 

In  this  connection  it  was  observed  in  a  leading  case,  that  "  it  is 
often  stated  in  the  books  that  a  corporation  is  created  by  its 
charter.  This  is  not  precisely  correct.  The  charter  only  confers 
the  life  and  provides  the  instruments  by  which  it  may  become  an 
acting  entity.  Such  a  corporation  has  been  well  defined  to  be  an 
artificial  being,  existing  only  in  contemplation  of  law.  The 
instruments  provided  to  bring  the  artificial  being  into  active 
operation  are  the  persons  named  in  the  charter,  and  those  who 
by  virtue  of  its  provisions  may  become  associated  with  tliem. 
These  persons  —  the  incorporators  —  as  natural  persons  have  no 
such  power.  The  charter  confers  upon  them  a  new  faculty  for 
this  purjjosc,  a  faculty  which  they  can  have  only  by  virtue  of  the 
law  vvhicli  confers  it."^ 

The  better,  if  not  the  prevailing,  rule  appears  to  be,  that  not  only 
arc  the  incorporators  named  in  the  articles  of  incorj)oration 
entitled  to  partici])ate  therein,  but  also  all  subscribers  to  the  pre- 
liminary stock  subscription  to  the  capital  stock  of  the  proposed 
corporation  may  do  so.^ 

1  Gent  V.  Comi)any,  107  111.  6.52.  "  RallimoroCity  P,ia.'».  I?y.  Co.  v.  Unin- 

*  Miller  i>.  Ewer,  27  Me.  509.  blcton.  77   Md.  341  ;    vSj.i-.ar  r.  Crawford. 

05 


§  87    INCORPOUATION    AND    ORGANIZATION    OF    CORPORATIONS.    [PART  I. 

§80.  Organizatiou  Meeting,  how  called.  —  TllC  morc  rcccilt 
iucurporatioii  acts,  such  as  arc  in  force  in  Connecticut,  Maine, 
Massadmsetts,  New  Jersey,  North  Carolina,  and  West  Virginia, 
point  out  specifically  how  the  organization  meeting  of  a  corpora- 
tion is  to  be  called.  Where  no  such  statutes  exist  the  better  and 
safer  practice  is  for  all  the  incorporators,  as  well  as  the  subscribers 
to  the  preliminary  subscription  agreement  to  the  capital  stock  of 
the  proposed  corporation,  to  sign  a  waiver  and  agreement  fixing 
the  time  and  place  for  the  organization  meeting  of  the  corporation.^ 

It  has  been  held  that  all  are  not  required  to  be  present  at  the 
organization  meeting  who  sign  the  articles  of  incorporation  unless 
the  statute  requires  it.  A  majority,  it  is  said,  is  sufficient.^  The 
safer  practice,  however,  is  to  comply  with  the  rule  stated  above.^ 

Virginia  is  one  of  the  few  States  possessing  a  statute  giving  the 
incorporators  the  right  to  assign  their  interests  as  such  in  a  pro- 
spective corporation.  Failure  to  call  a  meeting  as  provided  by 
statute  is  to  be  regarded  as  a  breach  of  a  condition  subsequent 
and  is  not  fatal  to  the  creation  of  a  valid  corporation.^ 

§  87.  Organization  Meeting,  where  held.  —  It  was  laid  down  at 
an  early  date  by  the  Supreme  Court  of  Maine  in  Miller  v.  Evver,^ 
that  all  acts  and  proceedings  of  persons  pretending  to  act  in  the 
capacity  of  incorporators  when  assumed  without  the  bounds  of  the 
sovereignty  granting  the  charter  are  absolutely  void.  The  prin- 
ciple established  in  Miller  v.  Ewer  has  been  quite  generally 
adopted  in  other  parts  of  the  country.^ 

The  reasoning  of  these  cases  is  to  the  following  effect :  the 
charter  bestows  upon  the  incorporators  certain  privileges  which 

14  Wend.  24 ;  Nickura  v.  Burkhardt,  30  ^  27  Me.  509. 

Ore.  464 ;  47  Pac.  788  ;  Waukon,  etc.  K y.  ^  Freeman  v.  Company,  38  Me.  343  ; 
Co.  V.  Dwyer,  49  la.  121 ;  Instone  v.  Com-  Smith  v.  Company,  64  Md.  8.5  ;  20  Atl. 
pany,  2  Bibb.  (Ky.)  578;  Chester  Glass  1032;  Camp  y.  Byrne,  41  Mo.  525  ;  Hum- 
Co.  V.  Dewev,  16  Mass.  94;  Haskell  v.  phreys  v.  Moouey,  5  Col.  282;  Duke  v. 
Read  (Neb.), "93  N.  W.  997.  Taylor,  37  Fla.  64;  19  So.    172;    Miller 

1  B.  B.  R.  Co.  V.  Buck,  68  Me.  81.  v.  Parrish,  14  N.  J.  Eq.  380;  Ormsby  v. 

2  Packard  v.  Co.,  168  Mass.  92  ;  46  Company,  56  N.  Y.  623  ;  Mitchell  y.  Com- 
N.  E.  4.33.  pany,  40  N.  Y.  Sup.  Ct.  406  ;  F.  T.  L.  Co. 

8  See  Babbitt  v.  E.  J.  I.  Co.,  1  Stew.  v.   Laislo,   59   Texas,   339;    Hodfv.son    v. 

Dig.  208,  §  13,  not  otherwise  officially  re-  Company,  46  Minn.  454;  49  N.  W.  197; 

ported  (1876);  Walworth  v.  Bracket,  98  Ohio,  etc.  Ry.  Co.  d.  McPherson,  35  Mo. 

Mass.  98.  13  ;  Arms  v.  Couant,  36  Vt.  744  ;  Galves- 

4  McClinch   v.   Sturges,   72   Me.  288  ;  ton,  etc.  Ry.  Co.  v.  Cowdroy,  11  Wall.  459  ; 

Braintree  Water  Supply  Co.  v.  Braiutrce,  Runyan  v.  Coster,  14  Peters,  122;  Augusta 

146  Mass.  482  ;  16  N.  E.  420;  I,i  re  Brit-  Bank  v.  Earle,  13  Peters,  519;  Wright  v. 

ish  Sugar  Refining  Co.,  3  Kay  &  J.  408 ;  Lee,  2  S.  D.  596 ;  57  N.  W.  706. 
Porter  v.  Robinson,  40  Hun  (N.  Y.),  209. 
96 


CHAP.  III.]  ORGANIZATION    AFTER   INCORPORATION.  §  87 

they  can  possess  only  by  virtue  of  tlie  law  which  confers  it ;  that 
law  is  inoperative  beyond  the  bounds  of  the  legislative  power  by 
which  it  was  enacted  ;  that,  as  the  foregoing  faculty  cannot  accom- 
pany the  incorporators  beyond  the  bounds  of  the  sovereignty  which 
creates  it,  they  cannot  possess  or  exercise  it  there,  and  can  have 
no  more  power  there  to  make  the  artificial  being  act  than  other 
persons  not  named  or  associated  as  incorporators.  Therefore  any 
attempt  to  exercise  such  a  faculty  there  is  merely  a  usurpation  of 
authority  by  persons  destitute  of  it  and  acting  without  any  legal 
capacity  to  act  in  that  manner.  If  the  foregoing  reasoning  be 
sound,  it  follows  that  all  fundamental  corporate  acts  and  pro- 
ceedings when  assumed  without  the  bounds  of  the  sovereignty 
granting  the  charter  are  absolutely  void.  The  principle  here 
stated  has  been  materially  qualified  in  a  large  number  of  jurisdic- 
tions by  an  extended  application  of  the  doctrine  of  estoppel.  As 
an  example  of  this,  attention  is  called  to  the  case  of  Handley  v. 
Stutz.i 

This  was  a  case  where  a  Kentucky  corporation  at  a  meeting  of 
the  stockholders  of  the  corporation,  held  outside  of  the  State,  in- 
creased the  capital  stock  of  the  company  from  one  hundred  twenty 
thousand  dollars  to  two  hundred  thousand  dollars.  It  was  con- 
tended that  this  increase  was  illegal,  for  the  reason  that  the  meet- 
ing of  the  stockholders  authorizing  it  was  held  outside  of  the 
State  of  Kentucky.  The  court,  in  its  opinion  upon  this  point, 
spoke  as  follows  : 

"  Nor  were  the  proceedings  of  such  meeting  any  less  binding  upon 
those  participating  in  it  by  reason  of  tlie  fact  that  it  was  held  outside 
of  the  boundaries  of  the  State  under  the  laws  of  which  the  company 
was  incorporated.  By  act  of  the  Kentucky  Legislature,  it  is  pro- 
vided, that  all  elections  for  directors  and  other  officers  by  private 
corporations  shall  be  held  within  the  territorial  limits  of  the  State 
of  Kentucky,  and  that  any  such  election  held  outside  of  Kentucky 
shall  be  void.  Beyond  the  election  of  officers,  however,  there  is  no 
statutory  restriction  of  corporate  action  to  the  limits  of  tlie  State, 
and  in  the  absence  of  such  inhibition  the  proceedings  of  such  meet- 
ing would,  with  regard  to  directors'  meetings,  be  binding  upon  all 
those  participating  in  it,  as  well  as  upon  those  acting  upon  the  faith 
of  its  valiility  or  receiving  the  stock  authorized  to  be  issued  at  said 
meeting.     It  is  true  that  there  arc  cases  holding  that  stockholders' 

1  130  U.  S.  417  ;   11  S.  Ct.  530. 

7  97 


§88    INCORPORATION    AND   OIIGANIZ.VTION    OF   CORPORATIONS.    [PAIIT  I. 

meetings  cannot  be  legally  held  outside  of  the  home  State  of  the  cor- 
poration, but  the  question  has  generally  arisen  where  a  majority 
present  had  attempted  by  their  action  to  bind  a  dissenting  minority, 
or  had  taken  action  prejudicial  to  the  rights  of  third  persons.  In- 
deed, so  far  as  we  know,  the  authorities  are  uniform  to  the  effect 
that  the  action  taken  at  such  meeting  was  binding  upon  those  who 
participated  in  or  partook  of  the  benefits  of  them.  In  this  case  the 
meeting  was  attended  by  all  the  stockholders  but  two,  who  were 
present  by  proxy.  The  vote  increasing  the  stock  was  unanimous, 
and  it  does  not  lie  in  the  mouth  of  those  who  participated  in  this  act, 
or  received  the  stock  voted  at  this  meeting,  to  question  its  validity."^ 

Unquestionably  the  legislature  has  the  legal  right,  in  the  absence 
of  constitutional  provision,  to  provide  that  all  meetings  of  cor- 
porations, whether  organization  or  otherwise,  may  be  held  outside 
the  State.2 

S  88.  steps  Necessary  to  complete  Organization.  —  The  princi- 
pal matters  which  demand  attention  at  the  organization  meeting 
of  a  corporation  may  be  enumerated  as  follows  :  (1)  the  adoption 
of  by-laws ;  (2)  election  of  directors  ;  (3)  providing  for  the  issue 
and  payment  of  the  capital  stock  of  the  corporation.  The  subject 
of  the  adoption  of  by-laws  and  the  payment  of  the  capital  stock  of 
the  corporation  will  be  left  for  subsequent  consideration. 

With  respect  to  the  matter  of  the  election  of  a  board  of  direc- 
tors the  following  may  be  said.  Many  of  the  incorporation  acts 
require  that  the  names  of  tlic  first  board  of  directors  shall  be  set 
forth  in  the  articles  of  incorporation,  and  this  ordinarily  obviates 
the  necessity  of  electing  a  new  board  at  the  organization  meeting 
of  the  corporation.^  Unless  the  statute  so  requires  it,  it  is  not 
necessary,  in  order  to  give  the  incorporators  the  right  to  partici- 
pate in  the  organization  meeting,  that  they  be  stockholders.^  But 
ordinarily  it  is  contemplated  by  the  incorporation  acts  that  the 
incorporators  shall  be  stockholders  or  subscribers  for  capital  stock. 

1  See  to  the  same  effect  Heath  v.  S.  L.  *  Ilammond  v.  Straus,  53  Md.  1 ;  Per- 
Min.  Co.,  39  Wis.  146;  0.  &  M.  Ry.  Co.  v.  kins  v.  Berders,  56  Miss.  733;  Proprie- 
McPherson,  35  Mo.  13;  Onnsby  i?.  Ver-  tors,  etc.  ?'.  Dickinson,  6  Gray  (Mass.),  586; 
mont  Min.  Co.,  56  N.  Y.  632;  Humphrey  Coyote  v.  Ruble,  8  Oregon,  284;  Dcns- 
V.  Moonev,  5  Col.  282 ;  Wright  v.  Lee,  2  more  Oil  Co.  v.  Densmore,  64  Pa.  St.  43 ; 
S.  1).  596;  57  N.  W.  706;  T.  M.  Co.  v.  Singer  Mfg.  Co.  v.  Peck,  9  S.  D.  29;  67 
Goodhue,  18  N.  C.  981.  N.   W.  947;  Ramsey  v.  Tod,  95   Texas, 

2  Graham  v.  Co.,  118  U.  S.  161;  6  Sup.  614;  69  S.  W.  133;  Byrnes  v.  Beck,  10 
Ct.  1G09.                                                      ^  Ga.  121  ;  B.  B.  &  T.  Co.  v.  J.  B.  T.  Co. 

3  Hamilton  Trust  Co.  v.  Clemens,  163  101  Tenn.  545;  48  S.  W.  228;  Wechsel- 
N.  Y.  423  ;  57  N.  E.  614.  berg  v.  Bank,  64  Fed.  90. 

98 


CHAP.  III.]  ORGANIZATION    AFTER    INCORPORATION.  §  89 

The  right  to  vote  stock  is  an  incident  to  stock  ownership,  and  was 
recognized  at  common  law  as  a  property  right. ^ 

In  some  few  of  the  States,  statutes  exist  limiting  the  right  of 
stockholders  to  own  more  than  a  certain  percentage  of  the  total 
stock  of  the  corporation.^ 

Sometimes  the  incorporators  are  appointed  commissioners  to 
take  stock  subscriptions.  It  has  been  held  that  the  failure  of 
such  commissioners  to  take  the  oath  of  office  as  required  by 
statute,  will  not  render  the  subscriptions  void.^  Where  authority 
to  open  books  of  subscription  is  given  by  statute  to  the  incorpora- 
tors, this  authority  may  be  exclusive,  so  that  subscriptions  cannot 
lawfully  be  received  by  others.  Such  subscriptions,  however,  may 
of  course  be  ratified  by  proper  parties.* 

Ordinarily  the  election  of  officers  is  by  statute  devolved  upon 
the  board  of  directors.  However,  in  some  few  of  the  States  cer- 
tain officers  are  required  to  be  elected  by  the  stockholders. 

§  89.  Adoption  of  By-Laws.  —  A  by-law  is  in  effect  a  contin- 
uing rule  of  action  for  the  government  of  the  corporation,  its  mem- 
bers and  officers.^  The  purpose  of  a  by-law  is  to  regulate  and 
define  the  duties  of  the  stockholders  between  themselves  and  the 
conduct  of  the  officers  and  the  management  of  the  corporate 
affairs.^ 

All  corporations  have  the  implied  power  to  make  by-laws  for 
the  government  of  the  corporation  and  the  management  of  its 
affairs.''  Unless  otherwise  provided  by  statute,  the  by-laws  must  be 
adopted  by  the  incorporators  at  their  organization  meeting  or  else 
by  the  stockholders  at  a  meeting  duly  called  for  that  purpose.^ 

Some  few  of  the  States,  among  them  being  South  Dakota,  North 
Dakota,  and  Oklahoma,  permit  incorporators  to  adopt  by-laws, 
whether  they  are  subscribers  for  the  capital  stock  of  the  proposed 
corporation  or  not.     Statutory  provisions  exist  in  several  of  the 

1  Commonwealth  i-.  Dalzell,    ir)2   Pa.  '  Ilollman   i'.  Company,  0   Gill   &  J. 

St.  217  ;  25  Atl.  535.  (Md.)  402. 

^  Maek   v.    Company,  00  Ala.  390;  8  *  N.  C.  M.  Ry.  Co.  v.  Eslow,  40  Mich. 

So.    150;    Commonwealth    v.    Detwillor,  222. 

131   Pa.  St.  614;  18  Atl.  990.     On  right  ^  N.  M.  T.  S.  Co.  v.  Bishop,  103  Wis. 

fif  corporation  to  vote  its  own  .shares  sec  492  ;  79  N.  W.  785. 
McNeely  r.   Woodruff,   13  N.  J.  L.  352;  "  Flint  f.  Pierce,  99  Mass.  70. 

A'x  pnrte  Holme.",  5  Cowen  (N.  Y.),  426;  ^  Kngelhnrdt  v.  Association,  148  N.  Y. 

on  right  of  corporations  to  vote  shares  in  281  ;  42  N.  V,.  710. 
another   corporation   see   Davis   v.  Com-         *  M.  G.  U.  Co.  v.  Wysong,  51  Ind.  12. 
pany,  77  Md.  35 ;  25  Atl.  982. 

99 


§  00    INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

states,  expressly  permitting  provision  to  be  made,  if  desired,  for 
the  adoption  of  by-laws  by  the  directors.  In  the  absence  of  any 
such  statutory  authority,  by-laws  adopted  by  the  directors  are  not 
binding  unless  subsequently  ratified  by  the  stockholders.^  On  the 
other  hand,  if  the  directors  are  vested  by  statute  with  exclusive 
power  to  pass  by-laws,  those  passed  by  the  stockholders  are  not 
valid.2 

The  adoption  of  by-laws  is  a  constituent  act,  and  for  this  reason 
they  must  be  adopted  within  the  State  by  whose  laws  the  corpora- 
tion was  created,  if  action  of  stockholders  is  necessary  to  their 
adoption.^  In  the  absence  of  statutory  power  or  charter  provision, 
by-laws  can  be  altered  or  repealed  by  the  stockholders  alone.* 

In  the  absence  of  statutory  prohibition,  the  power  to  amend  or 
alter  by-laws  may  be  delegated  by  the  stockholders  to  the  direc- 
tors. In  general  by-laws  must  be  adopted  in  conformity  to  the 
charter  and  be  reasonable  and  proper.^ 

The  by-laws  of  a  private  corporation  will  be  interpreted  by  the 
courts  as  interpreted  by  the  corporation.^ 

The  reasonableness  of  a  by-law  is  a  question  of  law  and  not  of 
fact.' 

In  drawing  by-laws  the  following  rules  should  govern :  they 
should  be  made  certain;^  they  must  be  directed  to  all  within  the 
sphere  of  their  operation ;  ^  they  nmst  operate  equally  upon  all  to 
whom  applied  ;  i'^  they  must  be  lawful  as  against  members  pos- 
sessing rights,  and  must  be  reasonable.^^ 

Sometimes  the  statute  requires  by-laws  to  be  adopted  within 
thirty  days  after  incorporation  and  copied  into  a  book  of  by-laws.^^ 
Such  statutes  are  clearly  directory  and  not  mandatory. 

§90.   Election  of  Directors.  —  The  power  to  choose  a  board  of 

1  Carroll  v.  Bank,  8  Mo.  Ap.  253.  **  State  ex  rel.  Attorney-General  v.  Conk- 

2  In  re  Klaus,  67  Wis.  40;  29  N.  W.     lin,  33  Wis.  21. 

582  ;  People  v.  Company,  82  111.  457 ;  S.  S.  '  State  v.  Overton,  4  Zabriskie  (N.  J.), 

Ass'n  V.  Company,  25  Mo.  Ap.  642.  435. 

3  In  re  Klaus,  67  Wis.  40 ;  29  N.  W.  »  Goddard  v.  Merchants'  Exchange,  9 
582;  Mitchell  v.  Company,  40  N.  Y.  Sup.  Mo.  Ap.  290. 

Court,  413.  ^  Ex  parte  Frank,  52  Cal.  600. 

4  M.  G.  R.  Company  v.  Wysong,  51  ^''  People  v.  Society,  25  Barb.  (N.  Y.)  7. 
Ind.  12.  ^1  Com.  v.  Worcester,3  Pick. 461  ;  King 

5  See  Kent  i-.  Company,  78  N.  Y.  182  ;  v.  Union,  170  111.  135  ;  48  N.  E.  677.  On 
Bergman  v.  Association,  29  Minn.  275 ;  failure  to  post  by-laws,  see  Langon  v. 
13  N.  W.  120;  Commons  v.  Company,  12  Company,  49  la.  317. 

Pa.  St.  318;  People  v.  Chicago  Board  of        ^^  See  Hall   v.  Crandall,  29  Cal.  567; 
Trade,  45  111.  118.  Clapman  v.  Doray,  89  Cal.  52  ;  26  Pac.  605. 

100 


CHAP.  III.]  ORGANIZATION    AFTER   INCORPORATION.  §  90 

directors  is  inherent  in  all  private  coi'porations  irrespective  of 
statute.^ 

The  election  of  directors  in  connection  with  the  organization  of 
a  corporation  ordinarily  follows  the  adoption  of  hv-laws.  After 
the  organization  the  election  of  directors  is  usually  had  at  the 
annual  meeting  of  the  corporation.  In  giving  the  notice  of  such 
annual  meeting  it  is  customary  to  specify  in  the  notice  that  a 
board  of  directors  is  to  be  chosen.^ 

hi  choosing  the  directors  it  is  incumbent  upon  the  incorpora- 
tors or  stockholders,  as  the  case  may  be,  to  observe  the  pro- 
visions of  the  statutes  relative  to  the  number  of  directors  to  be 
chosen  and  their  qualifications  as  to  stock-holdings,  residence,  and 
citizenship  if  any  such  are  prescribed  by  statute.  In  the  absence 
of  such  statutes  as  exist  in  many  of  the  States  authorizing  the 
dividing  of  directors  into  classes,  so  that  only  a  certain  portion  of 
the  board  are  elected  annually,  the  full  board  must  be  elected  each 
year.  In  the  absence  of  statute  making  the  ownership  of  stock  a 
qualification  for  holding  the  office  of  director  such  ownership  is 
not  necessary .3  Even  where  the  statute  requires  that  directors 
shall  be  stockholders,  it  is  not  necessary  that  they  shall  become 
such  before  their  election  if  they  become  stockholders  before  enter- 
ing upon  the  duties  of  their  office.^  In  the  election  of  directors 
by  the  incorporators  it  is  sufficient  in  order  to  qualify  him  that 
a  director  be  a  subscriber  for  stock,  though  no  certificate  has  in 
fact  been  issued.^  Where  ownership  of  stock  is  necessary  to 
qualify  one  as  a  director,  the  prevailing  rule  seems  to  be  that 
the  moment  a  director  ceases  to  be  a  stockholder,  he  ceases  to  be  a 
director  dejure  (but  not  de  facto)  without  proceedings  having  first 
been  taken  to  remove  him.^ 

Where  a  director  is  required  to  take  an  oath  of  office  before 
entering  upon  the  discharge  of  his  duties,  liis  failure  to  take  sucli  an 
oath  will  not  prevent  him  from  becoming  a  director  de  facto.'' 
Any  [)erson  who  can  be  a  business  agent  for  another  can,  if  ])os- 
sesscd  of  statutory  qualifications,  become  a  director.*^     Ordinarily 

1  Hiirlhiit  V.  Marshall,  62  Wis.  590;  ^  Dispatcli  Light  Packet  f.  Company, 
22  N.  W.  8.52.                                                        12   N.   II.  205;   Wright  v.   Company,    52 

2  Merritt  v.  Ferris,  22  111.  .103.  X.   J.    Kq.    352  ;    Howo    v.    Scarborough 
8  Wright  V.  Company,  117  Mai?s.  220.        (Ala.),  .'»5  So.  113. 

*  Greenough  v.  Comp.any,  64  Fed.  22.  "  Simp.xou  i'.  Garland,  76  Mo.  203. 

'^  McComb  I.".  A«.socintion,  lON.  Y.  Sup.  *  Fcople  v.  Webster,  10  Wend.  (X.  Y.) 

552  ;  Beckett  r.  Iloustou,  32  lud.  393.  554. 

101 


§90    INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

it  is  not  necessary  that  resignations  of  directors  be  acce})ted  in 
order  to  become  criective.^ 

Persons  owning  a  majority  of  stoclc  have  a  right  to  elect  dircc- 
tors.2  It  is  a  fundamental  i)riuciple  in  corporation  hiw  tliat  a 
majority  of  stockholders  shall  control  the  policy  and  regulate  the 
business  affairs  of  the  corporation,  and  to  this  each  stockholder 
impliedly  agrees  when  he  acquires  stock  in  the  corporation. ^ 
However,  in  order  to  insure  minority  representation  on  the  board, 
cumulative  voting  for  directors  is  permitted  in  a  large  number  of  the 
States.*  Where  such  right  to  cumulate  votes  is  mandatory  such 
right  cannot  be  taken  away  by  by-law.^ 

The  fact  that  a  corporation  begins  business  with  an  insufB- 
cient  number  of  directors  does  not  invalidate  debts  contracted  by 
them,  nor  deprive  it  of  its  corporate  rights  and  privileges  unless 
some  action  is  taken  by  the  State  to  that  end.*^  Failure  to  elect  a 
board  of  directors  annually  does  not  work  dissolution.  The  old 
board  will  hold  over  by  implication  of  law.'^  This  is  a  rule  not 
only  established  by  statute  in  a  large  number  of  the  States,  but  is 
a  well  established  rule  of  corporation  law  in  the  absence  of  such 
statutes,^  In  the  election  of  directors  a  majority  vote  of  all  present 
is  suflicient,  provided  a  majority  of  the  stock  is  represented  at  the 
meeting.^  Vacancies  in  the  board  of  directors  cannot  be  filled 
by  the  remaining  directors,  but  must  be  filled  by  the  stockholders, 
unless  such  power  is  expressly  granted  by  statutc^^  Even  where 
the  right  to  fill  vacancies  is  given  to  the  remaining  directors  it  is 
probably  true  that  there  must  be  present  at  the  meeting  a  majority 
of  the  whole  number  of  directors  prescribed  by  the  charter,  and 
that  such  vacancy  be  filled  by  a  majoi-ity  vote  thercof.^^ 

Unless  regulated  by  statute  or  by-laws,  the  board  of  directors 
may  fix  any  place  within  the  domiciliary  State  at  which  annual 

1  Pres.,  etc.  of  Manhattan  Co.  v.  Kal-  '^  Hunter  v.  Company,  20  La.  Ann.  1.3. 
denberg,    165   N.    Y.    1  ;    58  N.  E.    790;  ^  Chamberlain    v.   I).    S.    Work.s,    103 
Brigg.s  V.  Spaulding,  Ul  U.  S.  155.  Mich.  124  ;  61  N.  W.  .5.32  ;  Moses  v.  Tomp- 

2  Fanlds  v.  Yates,  57  111.416.  kiu.s  84  Ala.  613;  4  So.  763. 

3  Wheeler  v.  Company,  143  111.  197;  »  Kggleston  w.  Doolittle,  33  Conn.  402. 
32  N.  E.  420.                                                               ^'^  Moses  v.  Tompkins,  84  Ala.  013;  4 

4  Sec  Part  III.  Table  9,  page  579.  So.   763 ;  Kearney  v.   Andrews,   10  N.  J. 

5  Tomlin   v.  Bank,  52  Mo.  Ap.   430;  Eq.  70. 

Wright  V.  Company,  67  Cal.  532;  8  Tac.  "  Moses  ;?.  Tompkins,  84  Ala.  01.3;  4 

70.  So.    703  ;  Nathan  v.  Tompkins,   82    Ala. 

«  Fargason  v.  Company,  78  Miss.  05  ;  437  ;  2  So.  747. 
27  .So.  877. 

102 


CHAP.  III.]  ORGANIZATION   AFTER   INCORPORATION.  §  90 

meetings  for  the  election  of  directors  may  be  lield.^  Where  there 
are  mandatory  provisions  in  the  charter,  statute,  or  by-laws  as  to 
place  of  holding  annual  meetings  these  must  be  followed.^  Where 
the  certificate  of  incorporation  is  required  to  fix  the  number  of 
directors,  such  number  cannot  be  changed  except  by  amendment 
thereof.^ 

In  connection  with  the  general  subject  of  election  of  directors  the 
question  not  infrequently  arises  as  to  the  validity  of  the  so-called 
"  voting  trusts"  now  becoming  so  common  in  this  country,  Tiie 
prevailing  and  it  is  believed  the  true  rule  on  this  subject  is  set 
forth  in  Clowes  v.  Miller,"^  where  it  was  held  that  in  the  absence 
of  any  improper  motive  such  trusts  are  valid.^  It  is,  in  the  absence 
of  such  improper  motives,  merely  a  convenient  method  of  voting 
by  proxy. 

In  the  absence  of  statute,  charter  provision,  or  valid  by-law  to 
the  contrary,  holders  of  preferred  stock  have  the  same  rights  in  the 
election  of  directors  as  belong  to  the  holders  of  common  stock.^  It 
has  been  held  that  stockholders  may  in  voting  for  directors  change 
their  vote  while  the  election  is  in  progress.''  Mandamus  is  the 
proper  remedy  to  compel  canvassing  of  votes  at  election  of  direc- 
tors to  determine  whether  or  not  such  election  was  valid.^ 

In  some  of  the  States  there  are  certain  statutory  officers  known 
as  "  Inspectors  of  Election,"  who  must  be  chosen  preliminary  to 
the  election  of  the  board  of  directors.  These  inspectors  should  be 
chosen  in  the  mode  provided  in  the  by-laws.*^  Inspectors  have  no 
power,  express  or  implied,  to  pass  upon  the  eligibility  of  directors.^'^ 
The  failure  to  have  the  inspectors  sworn  before  acting  as  such  will 
not  invalidate  an  election.^^     In  the  absence  of  statutory  provision 

1  Corbett  v.  Woodward,  5  Saw.  40.3;  «  Mackintosh  r.  R.  R.  Co.,  32  Fed.  350; 
Common  wealth  v.  Smith,  45  Pa.  St.  59;  54  Fed.  582;  Loci<h.art  v.  Van  ALstyne, 
Pratt  I'.  Company,  35  Conn.  3G5 ;  Duke  .'il  Mich.  70;  Miller  i'.  Kattermau,  47 
V.  Taylor,  37  Fla.  C4  ;   19  Sou.  172;  Ililles  O.  St.  141  ;  24  N.  K.  496. 

V.  Parish,  14  N.  J.  Efi-  380;  Arms  v.  Co-  ^  c^t-ito  v.  McGain.s,  64  Mo.  Ap.  225. 

nant,  .36  Vt.  744;   IIod<,'son  i-.  Company,  »  State  v.  McCain,-*,  04  Mo.  Ap.  225. 

46  .Minn.  454  ;  49  N.  W.  197.  »  fn  re  Excelsior  Fire  Ins.  Co.,  16  Abb. 

2  McDaniel  v.  Company,  22  Vt.  274.  Pr.  8  ;  People  v.  Company,  55  Barb.  344  ; 

*  See  Matter  of  Griffin  Iron  Co.,  63  In  re  Li^lithall  Mfg.  Co.,  47  Ilun,  258; 
N.  J.  L.  168;  41  Atl.  931.  St.ite  v.  Mercliant,  37  O.  St.  251  ;  Com- 

*  60  N.  J.  Ef|    179  ;  47  Atl.  345.  inonwc.altli  v.  Woelpcr,  3  S.  &  U.  (I'a.)  29. 

*  See  also  Fauld:)  v.  Yates,  57  111.  410;  ^''  In  re  St.  Lawrence  Steamboat  Co., 
MoscB  c.  Scott.   84   Ala.  608  ;  4  So.  742 ;  44  N.  J.  L.  529. 

O.  &  M.  Ry.  Co.  V.  State,  49  0.  St.  608;  "   In   re  M.  &  II.   Ry.  Co.,   19   Wend. 

32   N.    E.   933;    Mobile,   etc.  Ry.  Co.   v.     (N.  Y.)  1.35. 
Nicholas,  98  Ala.  92;  12  So.  723' 

103 


§  92    INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS.    [PART  I. 

or  regulation  by  by-laws  providing  otherwise,  the  power  to  appoint 
inspectors  of  election  lies  with  the  stockholders  aloue.^ 

§  91.  Power  to  hold  Meetings  for  the  Election  of  Directors  with- 
out the  Domiciliary  State.  —  The  general  rule  unquestionably  is 
that  in  the  absence  of  statute  or  unanimous  consent  of  all  the 
stockholders  no  election  of  directors  by  the  stockholders  can  be 
legal,  so  as  to  make  them  directors  de  jure,  when  had  at  a  meeting 
called  without  the  limits  of  the  State  under  whose  laws  the  cor- 
poration is  created.^ 

Twelve  of  the  Commonwealths  have  statutes  expressly  author- 
izing the  holding  of  stockholders'  meetings  without  the  domiciliary 
Statc.3  In  any  event,  it  seems  to  be  now  well  settled  that  where 
all  the  stockholders  meet  without  the  State  and  transact  busi- 
ness thereat,  even  though  such  business  be  the  annual  election  of 
directors,  the  stockholders  present  at  such  meeting  are  estopped 
to  question  the  validity  of  the  proceedings  had  thereat.*  An  ex- 
cellent method  of  validating  any  action  taken  by  stockholders  at 
meetings  held  without  the  domiciliary  State  is  to  have  subsequent 
action  taken  by  the  stockholders  at  a  meeting  called  within  the 
State  ratifying  what  has  been  previously  done  by  them  without 
the  State.     This,  it  has  been  held,  cures  all  previous  defects." 

§92.  Voting  by  Proxy. — At  common  law,  voting  of  stock- 
holders at  annual  meetings  or  special  meetings  was  required  to  be 
done  in  person.^  In  the  absence  of  statute,  charter  provision,  or 
valid  by-law  giving  stockholders  this  right,  the  same  ru]e  would 
apply  at  the  present  day.''' 

1  Stater.  Merchant,  37  O.  St.  251.  II    Wall.  459;    20  Law  Ed.    199.     The 

2  Harding  v.  American  Glucose  Co.,  principle  of  estoppel  may  be  applied  here. 
182  111.  551  ;  55  N.  E.  577.  See  Hodgson  Handley  v.  Stutz,  139  U.  S.  417;  11  Sup. 
V.  Company,  46  Minn.  454 ;  49  N.  W.  197  ;  Ct.  530. 

Freeman  v.  Company,  38  Me.  343 ;  Smith  8  gge  Part  III.  Table  11,  page  581. 

V.  Silver  Valley  Min.  Co.,  64  Md.  85  ;  20  *  T.  M.  Co.  v.  Goodhue,  18  N.  Car.  981  ; 

Atl.    1032;    Aspinwall  et   al.  v.    Ohio  &  Handley  ?;.  Stutz,  139  U.  S.  417  ;  11  Sup. 

M.  R.  R.  Co.,  20  Ind.  492 ;  W.  H.  &  H.  Ct.  530. 

Miuing  Co.  v.  King,  45  Ga.  34 ;  Hiles  v.  ^  G.  I.  &  E.  Co.  v.  Toler,  80  Md.  278; 

Parrish,  24  N.  J.  Eq.  380;  Arms  v.  Con-  30  Atl.  657. 

nant,   36  Vt.  750;  Bellows  v.   Todd,   39  «  Perry   v.    Company,  93  Ala.  364;  9 

Iowa,   209;    Franco-Texas   Land   Co.   v.  So.  Rep.  217. 

Laigle,  59  Tex.  339;  Mack  v.  De  Bardel-  "  Pliillips  y.  Wickham,  1  Paige  (N.  Y.), 

ben,   etc.    Co.,  90   Ala.  396;  8  So.    150;  590;  Taylor  v.  Gri.swold,  14  N.  J.  L.  222; 

Duke  V.  Taylor,  37  Fla.  64 ;  19  So.  172;  P.  H.  S.  Bank  v.  Superior  Court,  104  Cal. 

Camp  r.  Byrne,  41  Mo.  525 ;  Mitchell  v.  649  ;  38  Pac.  452  ;  State  v.  Tudor,  5  Day, 

Vt.  Copper' Min.  Co.,  40  N.  Y.   Sup.   Ct.  329  ;  People  t'.  Crossley,  69  111.  195  ;  Perry 

406;  Galveston,  etc.  Ry.  Co.  v.  Cowdrey,  v.  Company,  93  Ala.  364;  9  So.  217. 
lOi 


CHAP.  III.]  ORGANIZATION   AFTER   INCORPORATION.  §  93 

Owing  to  the  unquestioned  right  of  a  corporation  to  adopt  a 
valid  by-law  permitting  voting  by  proxy,  even  in  the  absence  of 
a  statute  autliorizing  it,  the  question  has  ceased  to  be  one  of  any 
great  practical  importance  in  the  country  to-day.  Besides  this, 
statutes  exist  in  all  of  the  States  and  Territories,  except  Ari- 
zona and  Georgia,  expressly  authorizing  the  voting  of  stock  by 
proxy.  It  should  be  observed,  however,  that  where  the  right  to 
vote  by  proxy  is  given  by  statute  without  restriction  it  cannot  be 
qualified  by  by-law.^ 

Proxies  may  be  issued  in  blank  and  lawfully  filled  in  by  the 
holder.2  It  has  been  held  that  stockholders  cannot  give  an 
irrevocable  proxy  to  secure  the  payment  of  a  dcbt.^  It  is  against 
the  settled  rules  governing  the  control  of  cor[)orations  that  an 
irrevocable  power  of  attorney  which  directs  the  vote  on  stock, 
should  be  vested  in  a  person  who  has  no  interest  in  the  stock  or 
is  not  a  representative  of  a  person  interested  therein.* 

The  foregoing  suggests  the  question  as  to  whether  or  not 
voting  trusts,  so  common  at  the  present  time,  are  valid.  A 
"  voting  trust "  may  be  defined  to  be  an  agreement  of  stock- 
holders to  give  any  designated  trustee  the  right  to  vote  at  his 
discretion  through  stockholders  for  a  given  period  of  time.  It 
may  be  said  that  such  voting  trust  is  valid  where  neither  the 
purjjoscs  nor  the  means  used  contravene  any  constitutional  or 
statutory  provision  or  well-recognized  principles  of  public  policy, 
and  are  within  the  scope  of  the  powers  of  the  contracting 
parties.^ 

§  9-j.  First  Directors'  Meeting. — The  principal  business  to  be 
transacted  at  the  first  meeting  of  the  board  of  directors  of  a  cor- 
])Oration  is  (1)  the  election  of  the  officers  provided  for  in  the 
bv-laws ;  (2)  the  carrying  into  effect  the  resolutions  i)asscd  at 
the  organization  meeting  of  the  stockholders,  if  any,  looking  to 
the  i)aymcnt  of  the  stock    in    proi)erty,  or,   in  lieu  thereof,  the 

1  Bank  V.  Superior  Cuurt,  104  Ciil.  WJ  ;  Krci.-*el  )-.  Di.stilliiif,'  Co.,  01  N.  J.  Eq.  5  ; 
38  Pac.  4.52.  47  Atl.471  ;  Hriglitiiiaii  v.  Bates,  17.')  Ma.ss. 

2  Matter  of  White,  4.'J  Hiiii,  580;  lO.J;  .55  N.  E.  8011;  Mo.sch  v.  Scott,  84 
Matter  of  Towiiseud,  46  N.  Y.  St.  Rep.  Ala.  f.08  ;  4  So.  742  ;  Clowes  v.  Mill<"r,  60 
1.35.  N.  J.   E(|.   170;  47    Atl.  ."345;  Sullivan    r. 

3  Matter  of  Germicide  Co.,  65  Hun,  Tarke.s  (N.  V.),  69  Ap.  Div.  221  ;  74  N.  Y. 
606;  20  N.  Y.  Sup.  495.  Sup.  786;   Freoii  v.  Company,  42  O.  St. 

*  Clowes  V.  Miller,  60  N.  J.  E<i  179;  30.  See  however  Slicpaup;  Voting  Trn.st 
47  Atl.  345.  C.-use,  60  Conn.  5.53;    24  Atl.  32;  Harvey 

6  M.  &  O.  R.  I'.  Nichols,  98  Ala.  92  ;  12  v.  Compauy,  118  N.  C.  693;  24  S.  E. 
So.  723 ;  Smith  v.  Company,  115  Cal.  584  ;     489. 

105 


§93    INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS.    [PART  I. 

passage  of  a  resolution  by  the  board  of  directors  ordering  an 
assessment,  either  in  whole  or  in  part,  upon  the  ])ar  value  of  the 
capital  stock.  The  general  rule  appears  to  be  that  unless  the 
governing  statute  or  a  by-huv  of  the  corporation  expressly  provides 
that  directors'  meetings  should  be  held  within  the  domiciliary 
State,  that  such  meetings  may  be  held  without  the  limits  of  such 
State  if  desired.i 

Some  courts,  however,  apparently  distinguish  in  this  regard 
between  meetings  of  the  board  of  directors  for  the  election  of 
ot!iccrs  and  those  meetings  merely  called  for  the  transaction  of 
routine  business.  Such  courts  hold  that  meetings  of  the  first 
class  must  be  held  within  the  domiciliary  State,  while  the  others 
may  be  held  without  such  State  if  desired.^  In  nearly  half  of  the 
States  statutes  exist  authorizing  the  holding  of  directors'  meet- 
ings without  the  State.^  It  is  unquestionably  true  that  where  in- 
corporators can  perform  constituent  acts  outside  of  the  domiciliary 
State  directors  can  elect  officers  in  like  manner.* 

When  calling  the  directors  together  for  their  first  meeting,  the 
mode  of  notice  provided  for  in  the  by-laws  must  be  given.  In 
the  absence  thereof  personal  notice  must  be  given,  or  a  waiver  of 
notice  must  be  had  from  each  of  the  directors.^  It  is  hardly 
necessary  to  state  in  this  connection  that  no  director  can  lawfully 
delegate  power  to  act  for  him  to  another  person.^ 

At  common  law  a  majority  of  the  directors  present  and  voting 
at  a  meeting  was  necessary  to  constitute  a  quorum  of  the  full 
board.''  In  some  few  of  the  States,  notably  Oregon,  statutory 
provisions  exist  permitting  less  than  a  majority  of  the  board  of 
directors  to  constitute  a  quorum.  Provisions  in  statutes  and  by- 
laws requiring  the  election  of  directors  to  be  held  on  a  specified 
date  are  ordinarily  construed  to  be  merely  directory.*^  The 
general  rule  is  that  a  majority  of  the  directors  constitute  a  quorum 

1  Thompson  v.  Company,  58  Miss.  423  ;  ^  Bank  v.  McCarthy,  55  Ark.  473  ;  18 
Lead  Co.  v.  Keiuhard,  114  Mo.  218;  21  S.  W.  759  ;  B.  B.  11.  Co.  v.  Buck,  68  Me. 
S.  W.  488;  Bassett  i;.  Mining  Co.,  15  Nev.  81;  Lil)rary  v.  Association,  173  Pa.  St. 
293 ;  Parsons  v.  Lent,  34  N.  J.   Eq.  67  ;  30 ;  33  Atl.  744. 

Hanna  v.  Company,  23  O.  St.  622.  «  Perry  v.   Company,  93  Ala.  364  ;  9 

2  Smith  V.  Mining  Co.,  64  Md.  85  ;  20  So.  217  ;  Craig  Medicine  Co.  i:  Mer- 
Atl.  1032  ;  G.  L  &  E.  Co.  V.  Toler,  80  Md.  chants'  Bank,  59  llun,  6G1  ;  14  N.  Y. 
278;  30  Atl.  651.  Sup.  16. 

3  See  Part  III.  Table  12,  page  582.  '  Blackwell  v.  State,  36  Ark.  178. 

♦  Ohio,  etc.  11.  R.  Co.  v.  McPherson,  35  ^  Beardsley  v.  Johnson,  121  N.  Y.  224  ; 

Mo.  13.  24  N.  E.  380. 

lOG 


CHAP.  III.]  ORGANIZATION   AFTER   INCORPORATION.  §  95 

for  the  transaction  of  business,  and  a  majority  of  the  quorum  have 
power  to  bind  the  corporation  by  their  votcs.^ 

§  94.  Election  of  Corporate  Officers.  —  In  nearly  all  of  the  States 
statutes  exist  designating  certain  officers  that  business  corporations 
must  have,  and  providing  that  such  officers  shall  be  elected  by 
tlie  board  of  directors  duly  convened  for  that  purpose.  Where, 
however,  as  is  sometimes  the  case,  this  power  is  devolved  upon  the 
stockholders  by  statute,  then  directors  have  no  power  to  elect  such 
officers.^  In  the  absence  of  such  statutes  as  are  here  referred  to, 
giving  the  directors  power  to  elect  officers,  it  must  be  admitted 
that  the  current  of  authority  is  to  the  effect  that  the  power  then 
lies  in  the  stockholders  alone. ^ 

The  law  implies  that  directors  shall  hold  their  office  until  their 
successors  have  been  elected  and  qualified.*  Where  vacancies 
occur  in  the  board  of  directors  they  must  be  filled,  in  the  absence 
of  statute,  charter  provision,  or  by-law  giving  the  power  to  the 
directors,  by  the  stockholders  only,  and  even  where  the  power  to 
fill  vacancies  is  lawfully  bestowed  upon  the  remaining  directors, 
vacancies  can  then  be  filled  only  by  action  of  a  majority  of  the 
authorized  number  of  directors.^ 

Questions  of  policy,  or  management,  or  expediency  of  contract  or 
action,  or  consideration  of  gross  misappropriation  or  unlawful  appro- 
])riation  of  corporate  funds  to  the  detriment  of  corporate  interests, 
are  left  generally  to  the  decision  of  the  directors  if  their  powers 
are  without  limitation  and  free  from  restraint.  To  hold  otherwise 
would  be  to  substitute  the  judgment  and  discretion  of  others  in 
place  of  those  determined  on  by  the  scheme  of  incorporation.*^ 

§  95.  Appointment  of  Executive  Committee.  —  The  incorpora- 
tion acts  of  Connecticut,  Delaware,  Massachusetts,  Nevada,  New 
Jersey,  North  Carolina,  Virginia,  and  West  Virginia  all  authorize 
the  appointment  by  the  board  of  directors  from  their  own  number 
of  an  executive  committee  to  whom  may  be  entrusted  most  of  the 
ordinary  duties  that  devolve  ujjou  tlic  full  board  of  directors. 

1  Ten  Eyck  i'.  Company,  74  Midi.  220;  ^  Tcople  /•.  Kuiiklo,  9  Jolin.soii  (N.  Y.), 
41  N.  \V.  90.3;  see  also  Iloyt  y.  Thompson,  147;  Iliigiieiiot  Nat.  Bauk  v.  StudwtU,  C, 
19  N.  Y.  207.  Daly  (N.  Y.),  7i;j. 

2  See  In  tp  St.  Helen  Mill  Co.,  13  Saw.  <*  Mo.sc8  v.  Tompkins,  84  Ala.  01,3  ;  4 
92  ;  Walsenberg  Water  Co.  v.  Moore,  5  Sou.  70.'J. 

Col.  App.  144;  38  Pac.  60.  "  Kllerman   v.   IJy.   Co.,   49   N.  J.  Eq. 

3  Heanlsley  y.Jolin.son,121  N.Y.224;24  217  ;  23  Atl.  287  ;  I'lnicr  i;.  Company,  98 
N  E.  380  ;  In  re  A.  A.  G.  Iron  Co.,  03  N.  J.     .Mc.  579  ;  57  Atl.  lool . 

Law,  168,  357;  41  Atl.  931  ;  46  Atl.  1097. 

107 


§  OG  iNConroRATiON  and  organization  of  corporations,  [parti. 

It  was  at  one  time  held  that  the  performance  of  any  duties  by  the 
board  of  directors  involving  the  exercise  of  discretion  and  judg- 
ment could  not  be  so  delegated.^  The  modern  rule,  even  in  the 
absence  of  statute,  is  that  directors  have  the  power  to  delegate  to 
a  part  of  their  own  number  authority  to  perform  any  part  of  the 
ordinary  business  of  the  corporation,  even  though  it  involves  tiie 
exercise  of  the  broadest  judgment  and  discretion.'-^ 

In  any  event,  whenever  a  question  is  raised  as  to  the  validity  of 
acts  done  by  an  executive  committee,  the  ratification  of  their  action 
by  the  I'lill  board  will  undoubtedly  correct  all  defects  in  the  act 
comj)laiucd  of  which  would  have  been  valid  in  the  first  instance  if 
performed  by  the  board  itself.^ 

§  96.  Stock  Assessments.  —  Where  the  caj)ital  stock  of  a  cor- 
poration is  not  all  issued  in  the  first  instance  in  exchange  for 
property,  it  is  customary  for  the  board  of  directors  to  pass  a  reso- 
lution at  their  first  meeting,  making  an  assessment  upon  the  stock 
of  stockholders  either  for  its  entire  par  value  or  some  fractional 
part  thereof.  Generally  speaking,  in  order  to  sustain  a  right  of 
action  on  stock  subscriptions,  it  is  necessary  to  show  that  a  valid 
call  or  assessment  has  been  made.*  An  assessment  is  a  rating 
or  fixing  of  the  proportion  by  the  board  of  directors  or  by  the 
stockholders,  which  every  subscriber  is  to  i)ay  of  his  subscrip- 
tion, of  which  notice  is  given,  which  notice  is  referred  to  as  a 
"call."  5 

While  it  is  doubtless  true  that  a  "  call "  may  be  made  either  by 
the  directors  or  the  stockholders,  nevertheless  it  is  usually  made 
by  the  directors.  This  of  course  necessitates  the  organization  of 
the  corporation  as  a  preliminary  to  the  making  of  a  valid  assess- 
ment.*^ Tiie  purpose  of  the  "  call  "  is  to  fix  the  time  for  pay- 
ment where  that  is  not  provided  for  either  by  statute,  charter 
provisions,  or  by-law.'^      The  better  rule  seems  to  be  that  the 

1  Gillis  V.  Bailey,  21  N.  li.  149.  4  Chandler  v.  Siddlc,  5  Fed.  Cases  No. 

2  Iloyt  V.  Thompson,  etc.,  19  N.  Y.  207 ;     2594  ;  3  Dillon,  477. 

Burden   v.   Burden,    l.^Q    N.   Y.    187  ;  54  ^  Spangler  v.  Company,  21  111.  276. 

N.  E.  17;  Jones  v.  Williams,  139  Mo.  1  ;  6  -Williams  v.  Taylor,"  1:^0  N.  Y.  244; 

40  S.  W.  383 ;  Davis  v.  Company,  2  Utah,  24  N.  E.  288  ;  Williams  v.  Company,  153 

74 ;  Tempel  v.  Dodge,  89  Texas,  G9  ;  32  Ind.  49G ;  55  N.  E.  425. 
S.  W.  514;  33  S.  W.  222;  Metropolitan  '^  West   v.  Crawford,   80   Cal.    19;  21 

Telephone  Co.  v.  Company,  44  N.  J.  Eq.  Pac.  1123;  W.  S.  Bank  v.  Bank,  107  Mo. 

568;  UAtl.  907;  Sheridan  Electric  Light  133;  17  S.  W.  644  ;  Champion  Fire  Kiu- 

Co.  V.  Bank,  127  N.  Y.  517  ;  28  N.  E.  467.  dler  Co.  o.  Kischert,  74  Mo.  Ap.  537. 

3  U.  P.  Ry.  Co.  V.  Company,  163  U.  S. 
564;  16  S.  Ct.  1173. 

108 


CHAP.  III.]  ORGANIZATION   AFTER   INCORPORATION.  §  97 

directors  have  implied  power  by  virtue  of  their  office  to  make 
assessments.^ 

In  any  event,  shareholders  may  delegate  such  power  to  the 
directors  when  the  same  is  given  to  them  by  statute  or  by-law.^ 
It  is  questionable,  however,  whether  the  directors  have  power  in 
their  turn  to  delegate  the  power  of  making  assessments  to  some 
ministerial  officer.^  In  the  making  of  assessments  the  utmost  care 
should  be  observed  to  see  that  all  the  statutory  requirements  rela- 
tive to  the  same  are  complied  with. 

§  97.  Certificates  required  to  be  made  by  Officers  or  Directors 
after  Organization.  —  In  Maine,  Massachusetts,  Arkansas,  and 
Indiana  the  statutes  require  that  the  board  of  directors  together 
with  certain  of  the  corporate  officers  shall  file  a  certificate,  of 
organization  with  certain  officers.  Ordinarily  the  failure  to  file 
such  certificate  would  not  affect  the  legal  character  of  the  cor- 
poration unless  there  was  a  statutory  provision  to  that  effect.* 
In  Illinois,  Missouri,  Tennessee,  and  Utah  a  certificate  of  due 
organization  is  issued  to  the  corporation  by  State  officials.^ 

In  New  York,  New  Jersey,  District  of  Columbia,  Nevada, 
Indiana,  Massachusetts,  North  Carolina,  and  Colorado  the  law 
requires  that  after  the  payment,  either  in  whole  or  in  part,  of  the 
capital  stock  a  certificate  shall  be  made  and  filed  in  the  proper 
State  office  setting  forth  the  facts  relative  to  such  payment.*^ 
In  some  of  the  States,  notably  New  Jersey,  failure  to  file  such 
certificate  renders  the  officers  neglecting  or  refusing  to  make 
such  certificate  for  thirty  days  after  written  request  so  to  do, 
jointly  and  severally  liable  for  all  debts  contracted  before  the  filing 
of  such  certificate.'^ 

Unless  there  is  a  penalty  provided,  such  provisions  arc  merely 
directory.^ 

1  Budd  I'.  Company,  15  Ore.  41.3;  1.5  "  Also  in  Del.iwaro  upon  rpqnest  of  a 
Pac.   G.59 ;    Smith   i-.    Company,    1    How.     creditor  or  stociilioider. 

(Mis.s.)  479.  ^  Nassau  liank  v.  Brown,  30  N.  J.  E(|. 

2  HiveH  V.  Company,  .30  Ala.  92.  478;  Waters  v.  Quinhy,  27  N.  J.  L.  296. 
"  Pike  V  Company,  G8  Me.  44.5  ;  S.  II.     See  S.  F.  N.  Bunk  v.  Alniy,  117  Mass.  476  ; 

Road  V.  Green,  12  H.  I.  164.  Chase's  Pat.  El.  Co.  (\  Company,  1.52  Mass. 

*  In  re   Sliakopee,    etc.  Co.,  .37   Minn.  428;  28    N.    E.    300;  Chase  v.   Lord,   77 

91;  33  N.  W.  219;  Franklin   Bridp;e  Co.  N   Y.  1  ;  Block  v.  Womer,   100  111.  328; 

V.  Wood,  14    Ga.  80;  In  re  Philadelphia  Ilardman  v.  Sapo,  124  N.  Y.  2.5;  26  N.  ?]. 

Artisans  Institute,  8  Pliila.  229  ;  A.  S.  A.  354;  Flash  i\  Coim,  16  Fla.  428  ;  Austin 

&  G.  Co.  V.  Whittier,  117  Mass.  451.  v.  Berlin,  13  Col.  200;  22  Pac.  433. 

6  See   Bo.ston   Acid    Mfg.    Co.   v.   Mo-  "  Veeder  v.  Uudgett,  95  N.  Y.  295 

ring,  15  Gray  (Mass.),  251. 

109 


§  ITJ    INl'DIirOlJATlOX    AND    ORGANIZATION    OF    CORPORATIONS    [I'ART  I. 

N^  08.  Time  iu  which  Corporation  must  organize  and  commence 
Business.  —  Over  half  of  the  States  have  provisions  u[)oii  their 
statute  books  requiring  corporations  to  organize  and  commence 
business  within  from  one  to  five  years  after  the  issuance  of  tlieir 
charter.^  Usually  the  penalty  for  failure  to  so  organize  and  com- 
mence business  is  the  right  given  to  the  State  to  bring  proceed- 
ings for  the  forfeiture  of  the  corporation's  charter  on  the  ground 
of  non-user  thereof  during  the  statutory  period.  It  is  undoubtedly 
true,  however,  that  as  against  all  but  the  State  failure  to  organize 
and  commence  business  within  the  time  limited  by  statute  will  not 
prevent  it  from  becoming  a  corporation  de  facto? 

§  99.  stock  Certificates.  —  Stock  certificates  are  the  muniments 
and  evidence  of  the  holder's  title  to  a  given  share  in  the  property 
and  franchises  of  the  corporation  in  which  he  is  a  member.^ 
Subscribers  to  the  capital  stock  upon  complying  with  the  terms  of 
their  subscription  are  entitled  to  certificates  of  stock  showing  the 
number  of  shares  owned  by  them.  These  certificates  must  be 
signed  by  the  officers  designated  for  that  purpose  by  statute  or,  in 
the  absence  of  statutory  provision,  by  such  officers  as  are  desig- 
nated in  the  by-laws  for  that  purpose.*  A  seal  is  not  necessary 
to  the  validity  of  a  corporation  of  stock  in  a  corporation  (although 
it  is  customary  to  affix  one),  and  this,  too,  even  in  the  presence  of 
statutory  requirements.^  Neither  is  it  necessary  to  the  validity  of 
a  stock  certificate  that  it  should  be  issued  in  the  State  of  the  cor- 
poration's domicile.*^  Generally  speaking,  however,  the  stock  cer- 
tificate book,  seal,  and  stock  transfer  books  must  be  kept  within 
the  State  unless  the  statute  provides  otherwise.^ 

Statutory  provisions  exist  in  nearly  all  the  States  providing  the 
minimum  and  maximum  par  value  of  shares  of  capital  stock.^  In 
some  'iQw  States  the  statute  expressly  provides  that  all  the  stock 
certificates  issued  by  a  corporation  shall  be  of  a  uniform  par  value. 
Even  in  the  absence  of  such  a  mandatory  provision,  it  is  at  least 

1  See  Part  III.  Table  11,  page  581  ;  *  N.  0.  &T.  P.  Co.  v.  Bank  (Ohio),  24 
see  also  People  v.  Ry.  Co.,  45  Cal.  306  j  Wk.  Law  Bui.  198;  Titus  v.  G.  W.  T. 
Commouwealth  v.  Water  Co.,  110  Pa.  St.     Road,  61  N.  Y.  237. 

391;  2  Atl.  63.  &  Fitzhughy.Bauk, 3  Monroe  (Ky.),  128  ; 

2  Lehman  v.  Warner,  61  Ala.  455;  S.  Ilalsted  v.  Dodge,  1  How.  Pr.  (N.  Y.)  170. 
L.  A.  &  T.  H.  Ry.  Co.  v.  Company,  158  «  Courtright  v.  Deeds,  37  la.  503. 
111.390;  41  N.  E."916;  County  of  Macon  ''  Perkins  v.  Lyons,   111   la.   192;   82 
r.  Shores,  97  U.  S.  272.  N.  AV.  486. 

3  Mechanics  Bank  u.  Company,  13N.  Y.  8  ggg  Part  IIL  Table  6,  page  576. 
5?9. 

110 


CHAP.  III.]  ORGANIZATION   AFTER   INCORPORATION.  §  99 

questionable  whether  the  courts  wouhl  sustain  the  issuance  of 
stock  certificates  of  more  than  one  designated  par  value.^  In  the 
absence  of  statute  prohibiting  the  same,  corporations  may  insert 
in  stock  certificates  such  stipulations  as  they  choose  relative  to  the 
rights  of  the  holders  of  such  certificates,  and  these  constitute 
valid  contracts  between  the  stockholders  and  the  corporation.^ 

1  See  In  re  Cressona  Building  Ass'n,  I     pany,  129  (Pa.)  St.  405  ;  18  Atl.  414  ;  Dela- 
Legal  Rej^ister  (Pa.),  177.    As  to  meauing    field  v.  Illinois,  2  Hill  (N.  Y.),  172. 
of  par  value,  see  Commonwealth  v.  Com-         ^  Pioneer  Co.  i-.Brockett,  .58  111.  Ap.  204. 


Ill 


§100    INCOUrORATION  AND    ORGANIZATION    OF   CORPORATIONS.  [PART  I. 


CHAPTER  IV. 

ISSUANCE   AND   PAYMENT   OF   CAPITAL   STOCK. 

§  100.  General  Remarks  as  to  the  Issuance  and  Payment  of  Cap- 
ital Stock  upon  the  Organization  of  a  Corporation. — 111  Connec- 
tion with  tlie  issuance  and  payment  of  capital  stock  following 
the  organization  of  a  corporation,  several  important  matters  should 
be  considered,  such,  for  example,  as  the  time  within  which  the  cap- 
ital must  be  paid  in ;  the  question  as  to  how  the  capital  must  be 
paid  in  with  reference  to  whether  in  cash,  in  property,  or  in  ser- 
vices ;  and,  finally,  consideration  of  the  safest  and  most  convenient 
method  to  be  adopted  by  the  corporation  so  that  it  can  sell  a  por- 
tion of  its  capital  stock  at  less  than  par,  if  necessary,  for  the 
procuring  of  working  capital  for  the  corporation ;  and  this,  too, 
without  subjecting  the  purchasers  of  such  stock  to  any  liability  to 
creditors  for  alleged  unpaid  stock  subscriptions  thereon. 

It  appears  that  in  certain  of  the  States,  notably  South  Dakota 
and  Tennessee,  it  is  not  necessary  that  any  of  the  capital  stock 
be  either  subscribed  or  paid  in,  in  order  that  the  corporation 
may  transact  business.^  In  the  several  States  provisions  of  the 
several  incorporation  acts  in  force  therein  differ  greatly  in  regard 
to  the  matter  of  the  time  within  which  capital  stock  must  be  paid 
in.  New  York  requires  that  half  of  the  authorized  capital  be 
paid  in  within  one  year ;  Missouri,  fifty  per  cent  thereof  immedi- 
ately ;  Maryland,  one-fourth  of  the  capital  must  be  paid  in  each 
year;  in  Indiana,  manufacturing  corporations  must  pay  in  all  their 
capital  within  eighteen  months.  Twenty  of  the  States  require  a 
certain  percentage  of  the  capital  to  be  paid  in,  in  order  to  com- 
mence business ;  while  in  twenty -five  a  certain  percentage  of  the 
authorized  capital  must  be  subscribed.^  As  a  general  rule  the 
effect  of  the  provisions  of  law  here  referred  to  when  they  are  not 
complied  with  has  been  held  not  to  affect  the  existence  of  a  cor- 
poration as  a  corporation  dejure,  but  merely  afford  ground  for  a 

1  See  ante,  §  2.  2  gge  Part  III.  Table  6,  page  576. 

112 


CHAP.  IV.]      ISSUANCE    AND   PAYMENT    OP    CAPITAL   STOCK.  §  101 

judgment  of  ouster  in  a  proper  action  brought  by  the  State  for 
that  purpose.^ 

Sometimes  the  statutes  go  further  and  require  certificates  as  to 
the  payment  of  the  capital  stock  to  be  filed  in  designated  offices.^ 

§  101.  Manner  of  Payment  of  Capital  Stock.  —  Probably  no  sub- 
ject of  corporation  law  is  more  involved  in  apparently  hopeless 
confusion  than  that  growing  out  of  the  question  of  the  payment  of 
capital  stock  of  corporations  where  the  rights  not  only  of  stock- 
holders, but  creditors  as  well,  are  involved.  Frequent  attempts 
have  been  made  from  time  to  time  by  both  State  legislatures  and 
tlie  courts  looking  to  the  enactment  or  declaration  of  rules  which 
will  remove  the  question  from  its  present  vague  and  unsatisfactory 
form  into  the  realm  of  certainty  and  security.  It  may  not  be 
without  its  practical  value  to  trace  here  the  sporadic  development 
of  the  various  doctrines  that  have  been  advanced  from  time  to 
time  relative  to  both  how  the  capital  stock  of  a  corporation  may 
be  paid  in,  and  when  so  paid  in  whether  the  valuation  placed  upon 
the  property  accepted  by  the  corporation  in  exchange  for  stock, 
shall  be  conclusive  alike  upon  stockholders  and  creditors.  The 
common  law  rule  with  reference  to  the  manner  of  payment  of  the 
capital  stock  of  a  corporation  appears  to  have  been  from  time  im- 
memorial that  it  must  have  been  paid  for  either  in  money  or 
money's  worth.^  In  this  country  such  a  rule  seems  to  have  ob- 
tained at  an  early  date.  Even  when  required,  by  constitutional 
provision  or  statute,  that  stock  should  be  paid  for  in  cash,  never- 
theless the  courts  early  adopted  the  view  that  the  same  might  be 
paid  for  in  money  or  money's  worth.  Otherwise  it  would  simply 
put  the  corporation  to  the  necessity  of  issuing  stock  in  the  first 
instance  for  money,  and  then  ordering  it  to  be  immediately  paid 
out  for  necessary  labor,  property,  or  services.t 

The  next  step  in  order  of  development  was  the  enactment  of 
either  constitutional  or  statutory  provisions  expressly  authorizing 

1  Baker   v.   Backus,   32   111    79  ;    Far-  2  Scc   Quiiiby  v.   Waters,  28  N.  J.  L. 

gason  1'.  Coinp.iny,   78  Mi.sa.  65;  27   So.  533.     See  aw/r,  sec.  97. 
877  ;    Ilammuiul    v.   .Strauss,   53    Md.   1  ;  '  Drumniond'a   Case,   L.    H.  4    Chan. 

I'eojile  V.  Charnliers,  42  Cal.  201  ;  People  Ap.  772. 

V.  Bank,  7  Col.  226  ;  3  Pac.  214  ;  Palmer  *  Liebe  v.  Knapp,  79  Mo.  22  ;  Camden 

V.  Lawrence,  3  Sandf.  N.  Y.   161  ;  Lake  v.  Stuart,  144  U.  S.  104;  12  S.  Ct.  585; 

Ontario,  etc.    II.  Co.  v.  Mason,  16  N.  Y.  Kronert   r.   Johnston,   19   Wash.   96;    52 

451  ;    Spartenhurg,  etc.   R.  Co.  i'.   Ezell,  Pac.  605. 
14  S.   C.  281  ;  State  ex  rel.  v.  Webb,  97 
Ala.  Ill;  12  So.  377. 

8  113 


i$  101    INCORrorvATION  AND   ORGANIZATION  OF   CORPORATIONS.    [PARTI. 

the  pavment  of  stock  of  corporations  in  money,  property,  or 
services.  Later  came  a  wave  of  constitutional  enactments  mainly 
confined  to  the  Western  States,  to  the  effect  "  that  no  corporation 
should  issue  stock  except  for  money,  labor  done,  or  property  act- 
ually received,  and  declaring  that  all  fictitious  increase  of  stock 
should  be  void."  In  early  times,  when  the  number  of  corporations 
formed  were  few  in  number,  and  their  charters  limited  to  a  few 
purposes,  the  courts  were  seldom  called  upon  to  determine  whether 
or  not  capital  stock  had  been  actually  paid  in  in  accordance  with 
law, —  this  for  the  reason  that  in  most  cases  the  mode  of  payment 
of  such  stock  had  been  in  cash.  However,  early  in  the  nineteenth 
century  the  question  became  a  vital  one  through  the  not  infrequent 
attempts  on  the  part  of  certain  corporations  to  pay  for  their  stock 
in  property  taken  at  a  valuation  which  in  the  opinion  of  many 
was  largely  fictitious  if  not  fraudulent.  When  such  corporations 
became  insolvent,  creditors,  and  sometimes  before  that  time  stock- 
holders, brought  the  question  in  its  practical  form  before  the- 
courts  as  to  whether  such  valuation  were  binding  not  only  upon 
the  corporation,  but  upon  its  creditors  as  well.  It  was  such  a 
case  which  led  Justice  Joseph  Story  in  1824  to  give  utterance  to 
the  famous  "  trust  fund  doctrine  "  to  the  effect  that  the  capital 
stock  of  a  corporation  is  to  be  regarded  at  all  times  as  a  fund  held 
in  trust  by  the  corporation  for  the  benefit  of  its  creditors.^ 

In  its  practical  application  the  trust  fund  doctrine  was  found  to 
be  an  instrument  of  injustice  rather  than  of  justice.  Besides  this 
it  had  never  received  the  sanction  of  the  common  law,  as  it  existed 
in  England  before  the  Revolution,  and  had  not  in  its  last  analysis 
any  right  to  demand  recognition  on  the  broad  basis  laid  down  for 
it  by  its  founder.  By  degrees  the  majority  of  the  courts  refused  to 
recognize  the  trust  fund  doctrine,  at  least  in  its  original  form,  and 
declared  upon  the  only  safe  ground,  which  was  that  stockholders 
should  only  be  held  liable  to  creditors  on  stock  issued  in  exchange 
for  property,  upon  the  ground  of  fraud. '-^  At  the  same  time  the 
courts  divided  upon  the  question  whether  in  the  appraisal  of 
property  taken  in  exchange  for  capital  stock  corporations  should 
be  required  to  appraise  such  proj)erty  at  its  true  value  without 
regard   to   the  intention  of  the  parties  upon  whom  the  duty  of 

1  See  Wood  v.  Dummer,  3  Mason,  308 ;  ^  gee  opinion  of  Justice  Wm.  Mitchell 

Fed.  Cases  No.  17044.  in    Ilospes   v.   Company,  48   Minn.    174; 

50  N.  W.  1117. 

114 


CHAP.  IV.]      ISSUANCE   AND    PAYMENT   OF   CAPITAL   STOCK.  §  101 

making  such  appraisal  was  imposed,  or  whether  they  should  treat 
all  such  appraisals  as  conclusive  upon  both  the  corporation  and 
creditors  when  made  in  good  faith  and  where  no  actual  fraud 
appeared  in  the  transaction.  At  this  time,  too,  the  courts  almost 
universally  decided  to  distinguish  in  this  regard  between  the  ^ 
rights  of  the  corporation  and  its  stockholders  on  the  one  hand  and  ' 
the  rights  of  creditors  on  the  other.  Such  a  distinction  as  is 
here  referred  to  was  evidenced  by  the  adoption  of  the  rule  now 
recognized  everywhere  that  a  valuation  placed  upon  stock  by  the 
corporation  may  be  valid  and  binding  upon  the  corporation  and  its 
stockholders  and  yet  not  conclusive  as  against  creditors.^ 

The  doctrine  here  referred  to  is  well  stated  by  Judge  Showalter 
in  a  Federal  case  as  follows  :  ^ 

"Whatsoever  may  have  been  in  fact  the  value  of  the  property 
turned  over  to  the  company  for  its  stock,  the  latter  agreed  to  take  it 
for  the  stock.  The  persons  interested  were  the  stockholders,  and 
there  was  no  dissent  on  the  part  of  any  person  concerned  in  what  was 
thus  done.  Neither  any  person  thus  holding  stock  nor  any  person 
who  afterwards  became  a  stockholder  by  assignment  from  one  who 
then  held  stock  can  now  make  complaint  on  behalf  of  the  corporation 
against  the  lawfulness  of  that  transaction.  This  I  take  to  be  the 
settled  law  on  that  subject." 

The  next  evolutionary  step  is  to  be  found  in  the  recognition  by 
l)oth  the  legislatures  and  courts  of  a  number  of  the  Commonwealths 
of  the  unsatisfactory  results  attending  the  application  of  not  only 
the  narrow  and  falsely  conceived  "  true  value  rule  "  above  referred 
to,  but  that  of  the  "  good  faith  rule  "  as  well.  It  was  clearly  seen 
that  something  further  was  needed  in  order  to  remove  the  subject 
for  all  time  from  its  situation  of  uncertainty  and  doubt.  Both  the 
legislatures  and  the  courts  of  these  Commonwealths  undertook  to 
remedy  the  matter,  with  what  success  it  will  hereafter  appear. 
Certain  of  the  States,  such  as  New  Jersey,  New  York,  Delaware, 
West  Virginia,  Connecticut,  and  otiicrs,  enacted  statutes  providing 
in  substance  that  in  those  cases  where  corporations  attemjjtcd  to 
issue  their  cajtital  stock  as  fully  paid  in  exchange  for  property, 

>   Ilandlev  y.  Stutz,  139  U.  S.  417  ;  33     N.  Y.   203;  26   N.    K.    145;  Piirmalec   i-. 
r>.  K.  227  ;  'Scovill  v.  'lliaycr,   105  U.  S.     Price,  20S  111.  54t  ;  70  N.  E.  725. 
143;  26  L.  E.  968;  IJarr  v.  Company,  125  2  Norlliern  Trust  Co.  v.   Company,  75 

Fed.  936. 

115 


§101    INCORPORATION  AND    ORGANIZATION  OF   CORPORATIONS.   [PART  I. 

the  valuations  placed  upon  such  property  by  the  board  of  direc- 
tors tiicreof  should,  in  the  absence  of  actual  fraud  or  gross  over- 
valuation, be  conclusive  in  the  premises.  Again,  other  States 
sought  to  remedy  the  evil  in  a  surer,  if  less  generally  satisfac- 
tory form.  Thus,  for  example,  Michigan,  Virginia,  Florida,  and 
other  States  have  acts  upon  their  statute  books  requiring  a  de- 
scription of  the  property  which  they  desire  to  accept  in  exchange 
for  their  capital  stock  to  be  submitted  to  State  officials  in  order 
that  the  valuation  placed  upon  such  property  by  the  corporation 
may  be  approved  by  such  State  officials  before  the  stock  can  be 
issued ;  the  act  further  generally  providing  that  after  such 
appraisal  has  been  approved  by  the  State  officials,  it  should  be 
conclusive  in  the  premises. 

Turning  now  to  the  efforts  of  the  court  on  their  part  to  remedy 
the  evil  above  referred  to,  the  following  may  be  said.  Without  in 
terms  adopting  what  is  hereinafter  referred  to  as  the  "  speculative 
value  rule"  the  courts  in  recent  years  have  often  recognized,  in 
connection  with  attempts  on  the  part  of  corporations  to  issue  stock 
as  full  paid  in  exchange  for  property,  the  distinction  that  clearly 
obtains  between  property  which  has  either  a  well-known  or 
easily  ascertained  market  value  and  that  other  species  of  property 
of  the  character  commonly  known  as  "speculative,"  which  with- 
out any  present  large  intrinsic  value,  possesses  nevertheless  in 
almost  every  instance  a  large  value  for  future  speculative  pur- 
poses, not  determinable,  however,  by  the  ordinary  market  value 
standards.  Such  a  rule,  when  generally  recognized,  will  have  the 
effect  in  law  of  practically  dividing  corporations  into  two  great 
classes  with  respect  to  the  question  of  issuing  stock  thereof  in 
exchange  for  property,  to  wit,  non-speculative  and  speculative 
corporations. 

On  the  subject  now  before  us  certain  portions  of  the  able  rc[)ort 
of  the  Massachusetts  legislative  committee  on  corporations  ren- 
dered in  1903,  is  so  peculiarly  instructive  and  appropriate  that  we 
venture  to  quote  the  following  extract  therefrom: 

"The  liistory  of  corporations,  as  well  as  the  logic  of  the  case, 
shows  that  there  are  possiljle  two  general  theories  as  to  the  State's 
duty  in  creating  corporations :  first,  the  old  theory  that,  being 
creatures  of  the  Stat'',  they  should  be  guaranteed  by  it  to  the  public 
in  all  particulars  of  responsibility  and  management;  and  the  modern 
quite  opposite  theory  that,  in  the  absence  of  fraud  in  its  organization 
110 


CHAP.  IV.]       ISSUANCE    AND    PAYMENT   OP   CAPITAL   STOCK.  §  101 

or  goverumentj  an  ordinary  business  corporation  should  be  allowed  to 
do  anything  that  an  individual  may  do.  Under  the  old  theory,  the 
capital  stock  of  a  corporation  was,  in  the  law,  considered  to  be  a 
guarantee  fund  for  the  payment  of  creditors,  as  well  as  afifording  a 
method  of  conveniently  measuring  the  interests  of  the  individual 
owners  of  a  corporate  enterprise.  There  resulted  from  this  principle 
not  only  the  fundamental  proposition  that  the  capital  stock,  being  in 
the  nature  of  a  guarantee  fund,  should  be  paid  up  at  its  full  par  in 
actual  cash,  but  all  the  other  provisions  to  protect  creditors  or  other 
persons  having  dealings  with  the  corporation :  such  as,  that  the  debts 
of  a  corporation  should  not  exceed  its  capital  stock,  designed  prima- 
rily in  the  interest  of  creditors  and  secondarily  in  that  of  the  stock- 
holders, who  were  looked  after  as  carefully  as  if  they  were  the  wards 
of  the  State  when  dealing  in  corporation  matters.  Under  the  modern 
theory  the  State  owes  no  duty  to  persons  who  may  choose  to  deal 
with  corporations,  to  look  after  the  solvency  of  such  artificial  bodies ; 
nor  to  stockholders,  to  protect  them  from  the  consequences  of  going 
into  such  concerns,  the  idea  being  that  in  the  case  of  ordinary  busi- 
ness corporations  the  State's  duty  ends  in  providing  clearly  that  credi- 
tors and  stockholders  shall  at  all  times  be  precisely  informed  of  all 
the  facts  attending  both  the  organization  and  the  management  of 
such  corporations,  and  particularly  that  there  should  be  full  publicity 
given  to  all  details  of  the  original  organization  thereof. 

"The  committee  has  had  little  hesitation  in  determining  which  of 
these  theories  it  should  adopt.  The  limit  of  capitalization  both  in 
amount  and  in  valuation  to  the  net  tangible  assets  of  the  corporation 
has  unquestionably  had  much  to  do  with  the  arrest  of  corporate 
growth  in  this  Commonwealth.  Good-will,  trade-marks,  patents  may 
unquestionably  be  valuable  assets,  which,  under  our  present  method, 
may  not  be  ca[)italized.  Admirable  as  this  theory  may  have  been,  of 
payment  of  capital  stock  in  full  in  cash,  the  condition  is  so  easily 
avoided  in  practice  that  the  result  is  that  our  existing  law  promises  a 
Ijrotcction  which,  in  reality,  it  does  not  afford,  and  is  merely  an  em- 
barrassment to  those  who  feel  obliged  to  comply  not  only  with  the 
letter  but  with  the  spirit  of  the  law.  It  is  no  longer  true  that  persons 
dealing  with  corporations  rely  upon  the  State  laws  to  guarantee  their 
solvency  or  their  proper  management.  The  attempts  of  the  Common- 
wealth to  do  so  by  laws  still  remaining  on  its  statute  books  result,  as 
we  apprehend,  only  in  a  false  sense  of  security;  ami  we  believe  that 
the  act  projwsed,  while  giving  up  the  attempt  to  do  the  impossible 
thing,  will  really,  ])y  its  greater  attention  to  the  details  of  organiza- 
tion required  to  be  made  public  by  all  corporations,  result  in  an  ad- 
vantage  to  stockholders   and   creditors    more   substantial    tlmn    the 

117 


§101    INCORPORATION  AND  ORGANIZATION    OF   CORPORATIONS.    [PART  I. 

present  partial  attempt  to  enforce  a  principle  impossible  of  complete 
realization  and  which  is,  under  existing  laws,  easil}^  evaded. 

"  It  is  impossible  to  reconcile  or  combine  the  two  systems.  Either 
the  old  theory  must  be  maintained,  under  which  the  State  attempts 
thouqh  vainly  to  guarantee  both  to  stockholders  and  creditors  that 
there  is  one  hundred  dollars  of  actual  value  behind  each  one  hundred 
dollars  of  par  value  of  capital  stock,  or  some  other  system  must  be 
adopted  which,  while  not  being  chargeable  with  the  vagueness  and 
laxity  of  the  newer  legislation  of  other  States,  will  permit  a  share  of 
capital  stock,  although  nominally  one  hundred  dollars  in  value,  to  rep- 
resent, as  the  word  implies,  only  a  certain  share  or  proportion,  which 
may  be  more  or  less  than  par,  of  whatever  net  assets  the  corporation 
may  prove  to  have.  Under  a  system  of  this  sort  the  State  machinery 
will  only  provide  that  the  stockholders  and,  perhaps,  the  creditors, 
may  at  all  times  have  access  to  the  corporation  records  or  returns  in 
such  manner  as  clearly  to  show,  both  at  organization  and  thereafter, 
all  of  the  property  or  assets  of  which  such  share  of  capital  stock 
actually  represents  its  proportion  of  ownership. 

"The  question  of  monopoly  the  committee  does  not  conceive  to 
have  been  left  to  its  consideration.  The  limitations  now  existing  on 
the  capitalization  of  business  corporations  are,  no  doubt,  attributable 
to  the  sentiment  which  has  always  existed  against  monopoly,  but  it  is 
clearly  the  policy  of  the  Commonwealth,  as  shown  in  its  recent  legis- 
lation, to  do  away  with  the  attempt  to  prevent  large  corporations, 
simply  because  they  are  large.  Moreover,  it  is  apprehended  that  the 
question  of  monopoly,  or  rather  of  the  abuse  of  the  power  of  large 
corporations,  does  not  result  necessarily  from  the  size  of  corporations 
engaged  in  business  throughout  the  United  States.  In  the  opinion  of 
the  committee,  some  confusion  has  been  created,  in  the  discussion  of 
the  form  of  so-called  trust  legislation,  by  a  failure  to  appreciate  that 
its  real  object  is  not  to  protect  the  investor,  who  can  or  should  learn 
to  take  care  of  himself,  or  the  creditor  who  has  already  learned  to  do 
so.  The  real  purpose  of  such  legislation  is  the  protection  of  the  con- 
sumer. In  other  words,  there  is  no  reason  for  an  arbitrary  limitation 
of  capitalization  unless  it  can  be  used  as  a  means  of  creating  a  mo- 
nopoly which  will  influence  the  price  of  commodities.  In  the  opinion 
of  the  committee,  the  question  of  capitalization  is  not  a  contributing 
factor  in  the  fight  for  a  monopoly.  The  United  States  Steel  Company 
would  have  no  greater  and  no  less  a  monopoly  of  the  steel  business  if 
it  were  organized  with  one-half  of  its  present  capitalization.  The 
Standard  Oil  Company  has  a  very  conservative  capitalization,  and  yet 
it  is  the  most  comjilete  monopoly  of  any  industrial  corporation  in  this 
country. 

118 


CHAP.  IV.]      ISSUANCE    AND   PAYMENT    OF   CAPITAL   STOCK.  §  101 

"At  all  events,  it  is  no  better  for  the  State  to  leave  its  citizens  at 
the  mercy  of  the  large  corporations  created  by  other  less  careful  sover- 
eignties, than  to  permit  the  organization  of  corporations  adequate  to 
the  demands  of  modern  business  under  its  own  laws,  subject  to  its 
own  more  careful  regulation  and  control.  Under  our  State  and  Fed- 
eral system  it  is  practically  impossible  for  any  one  State,  by  its  own 
laws,  to  control  foreign  corporations,  but  so  far  as  possible  at  present 
the  committee  has  sought  to  subject  them  to  the  same  safeguards  of 
reasonable  publicity  and  accurate  returns,  both  as  to  organization  and 
annual  condition,  as  the  State  requires  of  its  own  corporations.  The 
simple  requirement  of  an  annual  excise  tax,  based  on  the  capital- 
ization of  such  foreign  corporations,  will  setve  to  bring  them  under 
the  control  of  this  State,  and  the  way  will  be  open  for  their  further 
regulation  if  desirable.  This  annual  tax  has  been  levied  upon  the 
same  principle  as  the  corresponding  tax  paid  by  home  corporations. 
The  State  should  impose  no  greater  burden  on  foreign  corporations 
than  on  its  own,  but  should,  so  far  as  possible,  subject  them  to  its 
own  laws. 

"The  committee  would  repeat  its  opinion  that,  so  far  as  purely 
business  corporations  are  concerned,  and  excluding  insurance,  finan- 
cial, and  public  service  corporations,  the  State  cannot  assume  to  act, 
directly  or  indirectly,  as  guarantor  or  sponsor  for  any  organization 
under  corporate  form.  It  can  and  should  require,  for  itself  and  for 
the  use  of  all  persons  interested  in  the  corporation,  the  fullest  and 
most  detailed  information,  consistent  with  practical  business  methods, 
as  to  the  details  of  its  organization,  the  powers  and  restrictions  im- 
posed upon  its  stockholders,  and  as  to  the  property  against  which 
stock  is  to  be  or  has  been  issued. 

"  Capital  stock  may  be  paid  for  in  cash  or  by  property.  If  it  is 
paid  for  in  cash,  it  may  be  paid  for  in  full  or  by  instalments,  and  a 
machinery  has  been  created  for  protecting  the  corporation  against  the 
failure  of  the  subscribers  to  stock  to  pay  the  balance  of  their  sub- 
scriptions. If  stock  is  paid  for  by  property,  the  incorporators  and  not 
the  State  are  to  pass  upon  its  value.  I'>efore  any  stock,  however,  can 
be  issued  for  property,  a  description  of  the  property  sufficient  for 
purposes  of  identification,  to  the  satisfaction  of  the  Commissioner  of 
Corporations,  must  be  filed  in  the  office  of  the  Secretary  of  the  Com- 
monwealtli.  This  document  becomes  a  pul)lic  record,  and  may  be 
consulted  by  any  one  interested  in  the  corporation.  If  the  officers  of 
a  corporation  make  a  return  which  is  false  and  which  is  known  to  bo 
false,  they  are  liable  to  any  one  injured  for  actual  damages.  If  a  full 
and  honest  description  is  made  of  property  against  which  stock  is 
issued,  a  stockholder  cannot  complain  because  of  his  failure  to  inform 

119 


i^  103    INCOHrOHATlON  AND    ORGANIZATION   OF   CORPORATIONS.   [PART  I. 

himself  by  personal  exannnation  or  investigation  of  the  value  of  the 
property  in  which  he  is,  or  contemplates  becoming,  an  investor. 

'<  The  second  principle  upon  Avhich  the  committee  has  acted  in  its 
specific  recommendations  is  this  :  that  the  State  should  permit  the 
utmost  freedom  of  self-regulation  if  it  provides  quick  and  effective 
machinery  for  the  punishment  of  fraud,  and  gives  to  each  stockholder 
the  right  to  obtain  the  fullest  information  in  regard  to  his  own 
rights  and  privileges  before  and  after  he  becomes  the  owner  of 
stock." 

§  102.  Payment  of  Capital  Stock  in  Services.  —  The  statutes  of 
Alabama,  Arkansas,  California,  Colorado,  Delaware,  Florida, 
Idaho,  Kentucky,  Maine,  Missouri,  Montana,  North  Dakota,  South 
Carolina,  South  Dakota,  Texas,  Utah,  Virginia,  Washington,  West 
A'irginia,  and  Wisconsin  expressly  authorize  the  payment  of  stock 
in  services.  It  sometimes  becomes  a  question  of  importance  to 
know  just  what  is  meant  by  "  services  "  as  used  in  this  connec- 
tion.i  Frequently  attempts  are  made  to  issue  stock  to  persons 
gratuitously  for  the  use  of  their  name  in  the  promotion  of  the 
corporation  under  the  theory  that  permission  to  use  their  name  is 
a  proper  service  rendered  to  the  company,  against  which  stock 
may  be  issued.  The  current  of  authority  seems  to  be  against  this 
proposition.^ 

Still  again,  the  constitutional  provision  which  exists  in  many  of 
the  States  declaring  all  fictitious  increase  of  stock  void  militates 
against  such  lines  of  procedure.^ 

Oftentimes  an  attempt  is  made  to  issue  stock  to  promoters  of 
corporations  under  what  is  known  as  "  promotion  stock."  The 
promoters  are  usually  the  incorporators,  and  as  such  are  not 
entitled  to  gifts  of  stock.*  However,  if  in  the  promotion  of  the 
company  services  and  time  have  been  employed,  the  same  may 
be  recompensed  to  the  extent  of  the  just  value  of  such  services. 

§  103.  Payment  of  Capital  Stock  in  Property.  —  In  most  of  the 
Commonwealths  statutes  exist  expressly  authorizing  the  payment 
of  capital  stock  of  a  corporation  in  property .^    Even  in  the  absence 

1  See  Arapahoe,  etc.  Co.  v.  Stevens,  13  Fogg  v.  Blair,  139  U.  S.  118;  35  Law  Ed. 
Col.  534  ;  22  Pac.  823  ;  Clevenger  v.  Moore     104. 

(N.  J.),  58  Atl.  88.  ^  See    Ilellerman  v.   Maier,    116    Cal. 

2  P.'  S.  Bank  v.  Company,  105  Mich.     416;  48  Pac.  377. 

535;  63  N.  W.  514;  Christen.sen  t;.  Eno,  •*  Brown   v.   F.   S.    H.   Co.,    119   Fed. 

106  N.  Y.  97;  12  N.  E.  648;  Handlev  v.     472. 

Stutz,  139  U.  S.  417;  35  Law  Ed.  227;         ^  See  Part  III.  Table  10,  page  580. 

120 


CHAP.  IT.]   ■  ISSUANCE   AND    PAYMENT    OF    CAPITAL   STOCK.  §  103 

of  such  statute  stock  may  doubtless  be  issued  in  the  same  manner, 
provided  the  purchase  of  such  property  is  within  the  express  or 
implied  powers  conferred  by  the  charter  and  the  property  is  of 
such  a  character  as  to  be  suitable  for  the  specific  purpose  for 
which  the  corporation  was  formed. ^  Some  few  of  the  States 
describe  in  considei-ablc  detail  just  what  kinds  or  classes  of 
property  may  be  accepted  by  tlie  corporation  in  exchange  for 
its  capital  stock.  Tlie  incorporation  acts  of  Alal)araa,  North 
Carolina,  Virginia,  West  Virginia,  and  New  Jersey  are  partic- 
ularly full  in  this  regard.  In  the  absence  of  such  provisions 
corporations  under  the  restrictions  stated  above  may  accept  in 
■payment  of  their  capital  stock  all  kinds  of  real  and  personal 
property  having  some  monetary  value,  such  as  mining  lands,  gas 
lands,  patent  rights,  secret  formulae,  trade-marks,  and  the  good 
will  of  an  established  business.^ 

The  payment  of  capital  stock  may  be  made  in  notes,  bonds,  or 
mortgages  in  the  absence  of  any  statutory  or  charter  prohibition.'^ 
But  as  to  creditors,  if  the  notes,  bonds,  or  mortgages  should  turn 
out  to  be  worthless,  the  parties  accepting  such  stock  might  be 
compelled  to  pay  the  i)ar  value  of  such  stock  in  money.*  So  it 
has  l)een  held  that  stock  of  a  corporation  may  be  paid  for  in 
advertising,'^  in  a  license  to  take  minerals  from  lands,*^  and  in 
stock  in  other  corporations^ 

In  other  words,  capital  stock  of  a  corporation  may  be. issued 
against  any  property  which  the  cori)oration  is  authorized  to  ])ur- 
chase,  or  which  is  necessary  for  its  legitimate  business.^ 

One  of  the  most  frequent  questions  with  which  an  attorney  has 
to  deal  in  connection  with  the  organization  of  a  corporation  has 
reference  to  devising  some  safe  method  whereby  stock  may  be 
legally  issued  in  the  first  instance  as  full  paid  and  non-assessable, 
to  be  thereafter  sold  below  par  if  necessary  for  the  purpose  of 
procuring  a  working  capital  for  the  company.     The  main  thing 

1  Licl)ke  t'.  Knapp,  "9  Mo.  22.  "Goodrich    v.    Reynolds,  31    111.   490; 

2  Loud    V.  Company,   153   U.  S.  564  ;     Stoddard  v.  Compuny,  44  Conn.  545. 

141  S.  Ct.  928;  Carr  r.  La  Fevre,  27  I'a.  *  IJ.Juton  v.  Dcncnt,  123  111.  142;    14 

417  ;  Amorican  Tutie  &  Iron  Co.  v.  Com-  N.  E.  62. 

j.any,  165  I'a.  St.  489  ;  30  Atl.  940;  Younff  *  Liebkc  i'.  Knaji]),  79  Mo.  22. 

r.  Company,  65  Mitli.  Ill  ;  31  N.  W.  814 ;  «  Slu'j)ard  v.  Dnike,  61  Mo.  A  p.  134. 

Wa.'.lihnrn     v.    Company,    81     Fed.    17;  '  Ea.st  N.  Y.  J.  K.  Co.  i-.  Liglithall,  36 

Wliitehill    r.    .Tac-ol)s.    7.5    Wis.   474;    44  How.  I'r.  481. 

N.  VV.  6.30;  Bank  r.  Companv,  32  W.  Va.  »  Bnuicr  v.  Brown,   139  Ind.  600;  38 

37  ;  59  S.  K.  243  ;  Kelly  v.  Clark,  21  M(;nt.  N.  E.  318. 

319;  53  I'ac.  959. 

121 


s;  1(U    INCOKrORATION  AND    ORGANIZATION    OF    CORPORATIONS.    [PARTI. 

to  be  kept  in  iiiiiul  in  connection  with  tlio  foreG,'oing  is  to  sec  that 
the  stools  is  so  issncd  that  future  purchasers  thereof  shall  not  be 
liable  thereon  either  to  the  corporation  or  to  creditors.  This  can 
be  accomitlishcd  most  satisfactorily  in  the  folluwing  manner. 

Have  the  corporation  accept  the  proposition  to  issue  its  capital 
stock,  cither  in  whole  or  in  part,  against  real  or  personal  property 
to  be  thereafter  duly  conveyed  or  transferred  to  the  corporation. 
Next  the  property  so  conveyed  or  transferred  should  be  appraised 
at  a  valuation  which  will  stand  the  test  according  to  the  character 
of  the  property  so  conveyed  or  transferred  of  either  the  good  faith 
or  the  speculative  value  rules  already  referred  to.  The  next  step 
is  for  the  party  to  whom  such  stock  is  issued  to  transfer  such 
stock,  eithei"  in  whole  or  in  part,  back  to  the  corporation  under 
a  trust  agreement  providing  that  the  same  shall  be  sold  at  such 
times  and  at  such  prices  as  to  the  board  of  directors  of  the  cor- 
poration will  seem  advisable  for  the  purpose  of  procuring  the 
necessary  working  capital.  Under  such  circumstances  the  stock 
so  transferred,  while  originally  issued  at  par,  may  he  sold  at  the 
best  price  obtainable,  and  the  purchasers  will  not  incur  liabil- 
ity beyond  the  agreed  price  even  to  subsequent  creditors.^  The 
same  is  true  of  stock  that  has  been  forfeited  for  non-payment  of 
assessments.^ 

§  104.  statement  of  True  Value  Rule.  —  In  connection  with  the 
appraisal  of  property  taken  by  a  corporation  in  exchange  for  its 
capital  stock,  the  courts  have  established  various  rules  with  a  view 
to  laying  down  some  satisfactory  principle  upon  which  such 
appraisal  may  be  based  in  those  cases  where  creditors  seek  to 
enforce  as  against  the  holders  of  such  stock  an  alleged  liability 
for  unpaid  stock  subscriptions.  The  various  rules  liere  referred 
to  may  be  enumerated  as  follows  :  "  the  true  value  rule,"  "  the  good 
faith  rule,"  and  "  the  speculative  value  rule."  It  is  to  the  first 
of  these  that  our  attention  will  now  be  directed. 

What  is  known  as  "  the  true  value  rule  "  is  a  natural  outgrowth 
of  the  adoption  by  many  of  the  courts  of  the  trust  fund  doctrine 
enunciated  by  Judge  Story  in  Wood  v.  Dummer.'^     This  may  be 

1  Iron  Co.  fit  al.  v.  Hayes  et  aJ.,  165  Pa.  7  S.  Ct.  482;  Coleman  v.  Howe,  1.54  HI. 

St.  489 ;  30  Atl.  936  ;  Lake  Sup.  Iron  Co.  458  ;  39  N.  E.  725  ;  Kimball  v.  Company, 

V.  Drexel,   90   N.  Y.  87  ;    Davin  Bro.s.  v.  69  N.  H.  485;  45  Atl.  253. 
Company,  101  Ala.  127  ;  8  So.  496  ;  Ailing  2  p,j]lman  v.  Company,  7^  111.  Ap.  313  ; 

V.   Wenzel,   133  111.  264;  24  N.   E.   551  ;  Otter  v.  Company,  50  15arh.  247. 
M.  &  L.  R.  Ky.  Co.  V.  Dow,  120  U.  S.  287  ;  ^  3  Mason,  308 ;  Fed.  Cases,  No.  17944. 

122 


CHAP.  IV.]      ISSUANCE   AND   PAYMENT   OF   CAPITAL   STOCK.  §  105 

stated  as  follows  :  That  the  courts  will  not  treat  anything  in  the 
shape  of  property  accepted  by  the  corporation  in  exchange  for  its 
capital  stock  as  payment  thereof  except  to  the  extent  of  the  true 
value  of  the  property  received,  wholly  without  regard  to  the  pres- 
ence of  fraud  or  the  absence  of  good  faith  in  the  transaction.^ 

Not  only  has  the  true  value  rule  been  adopted  by  many  courts, 
irrespective  of  statute,  but  it  has  found  legislative  recognition  as 
well.     Thus  the  incorporation  act  of  Alaska  requires  that  such 
property  shall  be  assessed  at  its  true  money  value  ;  that  of  Con- 
necticut and  Delaware,  at  its  actual  value ;  in  Kentucky,  at  its 
market  price ;  in  North  Dakota  and  South  Carolina,  at  its  true 
money  value  ;  in  Tennessee  and  Utah,  at  its  fair  cash  value,  and 
Florida,  at  a  just  valuation.     In  Connecticut,  Massachusetts,  and 
North  Dakota  the  necessity  of  making  such  appraisal  according 
to  the  strict  letter  of  the  statute  is  very  forcibly  suggested  by 
making  the  directors  liable  to  all  parties  injured  thereby  in  case 
they  fail  to  make  such  appraisal  as  directed  by  the  act.    Statutory 
provisions  which  exist  in   so  many  of   the  States  declaring  all 
fictitious  increase  of  stock  void  have  been   held  by  the  courts 
not  to  make  the  validity  of  an  over-issue  of  stock  dependent  upon 
the  inquiry  whether  the  money  or  property  received  therefor  was 
of  equal  value  in  tlie  market  with  the  stock  so  issued,  or  to  restrict 
private  corporations  acting  without  the  approval  of  their  stock- 
holders in  the  sale  of  their  stock  for  money,  property,  or  labor 
done  upon  such  terms  as  they  might  deem  proper,  provided  always 
that  the  transaction  is  a  real  one,  based  upon  present  consideration, 
liaving  reference  to  legitimate  corporate  purposes,  and  is  not  merely 
a  device  to  evade  the  law  and  accomplish  that  which  is  forbidden.^ 
§  105.    Statement  of  Good  Faith  Rule.  —  As  has  already  been 
observed  in  a  previous  section, ^  the  trust  fund  theory  of  Justice 
Story  no  longer  obtains  in  a  majority  of  the  States.     Witli  the 
absence  of  any  general  recognition  by  the  courts  of  this  doctrine, 
there  necessarily  followed  the  abrogation  of  the  true  value  rule, 
which  was  based   largely  upon  the  trust  fund  doctrine.     In  its 
l)lace  has  appeared  in  many  jurisdictions  what  is  known  as  the 
"good  faith  rule."     The  true  value  rule  in  its  jjractical  applica- 
tion was  harsh  and  unconscionable,  was  wholly  in  the  interest  of 

1  Shickle    v.    Watts,  94    Mo.   410;  7     Pac.  582;  M.  &  L.  R.  Ry.  Co.  v.  Dow, 
S.  W.  274.  120  U.  S.  287  ;  7  S.  Ct.  482. 

2  Smith  V.  Company,  115  Cal.  584  ;  47  »  Ante,  §  101. 

123 


§105    INCOUrORATION  AND   ORGANIZATION    OF   CORPORATIONS.   [PART  I. 

creditors,  and  made  little  acconiit  of  the  interests  of  equally  inno- 
cent stockholders.  The  good  faith  rule,  on  the  other  hand,  while 
often  difticult  of  practical  application,  is  much  more  liberal  and 
fair  to  all  concerned  than  the  rule  which  it  is  now  so  rapidly  sup- 
planting.    It  may  be  stated  as  follows : 

That  where  the  governing  statute  authorizes  the  shares  to  be 
paid  for  in  property  instead  of  cash,  or  where  the  law  of  the  State 
concedes  this  power,  then  the  fact  that  they  are  so  paid  for  at  a 
fair  valuation  of  the  property,  affords  no  ground  of  complaint  to 
the  creditors,  provided  such  payment  is  made  and  accepted  in 
good  faith.  In  fact,  in  order  to  render  the  transaction  void 
either  gross  over-valuation  or  actual  fraud  must  be  shown.^ 

In  order  to  obtain  a  clear  understanding  of  the  distinction  that 
exists  between  the  true  value  rule  and  the  good  faith  rule,  it  is 
necessary  to  understand  the  reasons  which  actuated  so  many  of 
the  courts  in  repudiating  in  the  first  instance  the  trust  fund  doc- 
trine in  order  to  clear  the  way  for  the  adoption  by  such  courts  of 
the  good  faith  rule.  Nowhere  will  be  found  a  better  statement  of 
this  matter  than  that  presented  by  Justice  William  Mitchell  of  the 
Minnesota  Supreme  Court  in  the  case  of  Hospes  v.  Northwestern 
Manufacturing  Company .^ 

"  It  is  difficult,"  said  Justice  Mitchell,  "  if  not  impossible,  to 
explain  or  reconcile  decisions  and  cases  bearing  upon  the  trust 
fund  doctrine,  or,  in  the  light  of  them,  to  predicate  the  liability  of 
the  stockholder  upon  that  doctrine.  But  by  putting  it  upon  the 
ground  of  fraud,  and  applying  the  old  and  familiar  rules  of  law 
on  that  subject  to  the  peculiar  nature  of  a  corporation  and  the 
relation  which  its  stockholders  bear  to  it  and  to  the  public,  we 
have  at  once  rational  and  logical  ground  on  which  to  stand.  The 
capital  of  a  corporation  is  the  basis  of  its  credit.  It  is  a  substi- 
tute for  the  individual  liability  of  those  who  own  its  stock.  People 
deal  with  it  and  give  it  credit  on  the  faith  of  it.  They  have  a 
rfght  to  assume  that  it  has  paid  in  capital  to  the  amount  which 
it  represents  itself  as  having;  and  if  they  give  it  credit  on  the 
faith  of  that  representation,  and  if  the  representation  is  false,  it 
is  a  fraud  upon  them ;  and  in  case  the  corporation  becomes  insol- 

1  Bank   v.  Alden,  129  U.  S.  372;  32  Wliiteliill    v.    Jacobs,    75    Wis.    474;  44 

L.  E.  725  ;  Rood  v.  Wharton,  74  Fed.  118;  N.  W.  630  ;  Young  v.  Company,  65  Mich. 

Coit  V.  Company,  119  U.  S.  343;  7  S.  Ct.  Ill  ;  31  N.  W.  814. 
231;  Boynton  v.    Hatch,  47   N.   Y.  225;  '•^  48  Minn.  174;  50  N.  W.  1117. 

Van  Co'tt  V.  Van  Brunt,  82  N.  Y.  535; 
124 


CHAP.  IV.]      ISSUANCE   AND   PAYMENT   OF   CAPITAL   STOCK.  §  106 

vent  the  law,  upon  the  plainest  principles  of  common  justice,  says 
to  the  delinquent  stockholder,  '  Make  that  representation  good  by 
paying  for  your  stock.'  It  certainly  cannot  require  the  invention 
of  any  new  doctrine  in  order  to  enforce  so  familiar  a  rule  of  equity. 
It  is  the  misrepresentation  of  fact  in  stating  the  amount  of  capital 
to  be  greater  than  it  really  is  that  is  the  true  basis  of  the  liability 
of  the  stockholders  in  such  cases ;  and  it  follows  that  it  is  only 
those  creditors  who  have  relied,  or  who  can  fairly  be  presumed  to 
have  relied,  upon  the  professed  amount  of  capital,  in  "whose  favor 
the  law  will  recognize  and  enforce  an  equity  against  the  holders 
of  '  bonus  stock.'  This  furnishes  a  rational  and  uniform  rule,  to 
which  familiar  principles  are  easily  applied,  and  which  frees  the 
subject  from  many  of  the  difficulties  and  apparent  inconsistencies 
into  which  the  'trust-fund'  doctrine  has  involved  it;  and  we 
think  that  even  when  the  '  trust  fund '  doctrine  has  been  invoked 
tiie  decision  in  almost  every  well-considered  case  is  readily 
referable  to  such  a  rule." 

Another  statement  of  the  good  faith  rule  is  to  be  found  in  Kelley 
V.  Company ,1  to  the  following  effect :  If  the  nature  of  the  property 
and  the  extent  of  the  valuation  are  such  that  the  latter  might  have 
been  due  to  errors  of  judgment,  then  to  render  the  transaction 
invalid  as  against  creditors  actual  fraud  must  be  shown,  and  the 
question  is  one  of  fact.  On  the  other  hand,  if  the  over-valuation 
is  so  gross  that  it  could  not  have  been  due  to  mere  errors  of  judg- 
ment, the  transaction  will  be  held  fraudulent  as  a  matter  of  law.^ 

§106.  Statement  of  "Speculative  Value  Rule."  —  It  must  be 
admitted   that   neither   the  "  true   value    rule "   nor  the  "  good 

1  21  Mont.  319;  51  Pac.  g.^O.  Ry.  Co.  (Cal.),  51   Pac.  710;   Jenkins  v. 

2  Coleman  v.  Howe,  154  111.  458;  39  Bradley,  104  Wis.  540;  80  N.  W.  1025; 
N.  E.  725;  N.  11.  II.  N.  Co.  v.  Company,  Gamble  v.  Q.  C.  W.  Co.,  123  N.  Y.  91  ; 
142  Mas.s.  349;  7  N.  E.  773;  Ilastin^'s  25  N.  E.  201  ;  Young  v.  Erie  Iron  Co., 
Malting  Co  y.  Company,  65  Minn.  28 ;  67  65  Mich.  Ill;  31  N.  AV.  814;  Bank  v. 
N.  W.  652;  Northern  Trust  Co.  v.  Com-  Aldcn,  129  U.  S.  372;  32  L.  E.  725; 
jiany,  75  Fed.  936  ;  nfTirnicd  in  Dickin.son  Coffin  v.  Bansdoll.  110  Ind.  417  ;  11  N.  E. 
»•.  Northern  Tru.st  Co.,  80  Fed.  452;  Wa.sh-  20;  Bickley  r.  Sclilag,  46  N.  J.  Kq,.533; 
hnrn  v.  Company,  81  Fed.  17;  Goodrich  20  At!.  250;  S.  B.  C.  S.  Co.  ?•.  Rankin, 
J-.  Iteynold-t,  31  111.490;  Edwards  i'.  Com-  45  111.  Ap.  226;  Brnner  v.  Brown,  139 
pany,27  La.  Ann.474;  Whitcliill  r.  Jacoh.s,  Ind.  600;  38  N.  E.  318;  Gilkio,  etc.  Co. 
75  Wis.  474  ;  44  N.  W.  630;  Humaston  v.  v.  1).  T.,  etc.  Co.,  46  Ncl).  333  ;  64  N.  W. 
Company,  20  Wall.  20;  State  r.  Wehl),  978;  A.  T.,  etc.  Co.  v.  Hays,  165  Pa.  St. 
110  Ala.  214;  20  So.  462;  Skinner  v.  489  ;  .30  Atl.  936 ;  Jones  c.Whitworth,  94 
Smith.  1.34  N.  Y  240;  31  N.  E.  91 1  ;  Par-  Tenn.  602  ;  .30  S.  W.  736;  M.  T.  Co.  v. 
ni.alce  v.  Price,  208  111.544  ;  70  N.  E.  725;  S.  C,  etc.  Co..  16  Wash.  499;  48  Pac. 
Phelan  i'.  Hazard,  19  Ved.  Cases  No.  333 ;  Taylor  y.  Cummings,  127  Fed.  108. 
11068;  5  Dill.  45;  Smith  v.  Forrier,  etc. 

125 


§100    INCORPORATION  AND    ORGANIZATION    OF   CORPORATIONS.    [PART 1. 

faith  rule"  affords  a  satisfactory  basis  for  determining  all  (lucs- 
tious  that  may  arise  relative  to  the  issuanee  of  the  capital  slock 
of  a  corporation  as  full-paid  and  non-assessable  in  exchange 
for  jM-oporty  transferred  to  it.  In  practice,  neither  the  inequi- 
table "true  value  rule"  nor  the  fairer  "  good  faith  rule"  will  be 
found  to  rest  on  any  satisfactory  or  substantial  basis.  Of  late 
years,  without  in  terms  calling  it  by  that  particular  name, 
courts  of  high  repute  have  in  substance  adopted  what  will  be 
termed  here  the  "  speculative  value  rule."  This  may  be  defined 
as  that  rule  whereby  a  corporation  is  permitted,  in  issuing  its 
capital  stock  as  full  paid  and  non-assessable  in  exchange  for 
either  real  or  personal  property,  to  appraise  the  latter  at  its 
potential  speculative  value,  looking  towards  its  future  development 
rather  than  at  its  present  intrinsic  value.  The  statement  of  the 
rule  would  be  incomplete  without  adding  that  in  all  cases  where 
such  appraisal  is  questioned,  the  burden  of  proof  of  attacking  the 
same  is  upon  the  creditor. 

The  rule  in  its  practical  application  throws  upon  the  creditor 
the  burden  of  showing  that,  viewed  from  a  purely  speculative  stand- 
point, the  appraisal  made  by  the  corporation  of  such  property 
constituted  not  merely  an  over-valuation,  but  a  fraudulent  over- 
valuation as  well.  Before  attempting  to  discuss  at  length  the 
"  speculative  value  rule,"  as  stated  above,  it  might  not  be  without 
its  advantage  to  trace  briefly  those  evolutionary  steps  along  legal 
lines  which  appear  to  have  paved  the  way  for  a  fuller  recognition 
on  the  part  of  the  courts  of  the  rule  here  contended  for.  In  the 
first  place,  we  have  the  enunciation  by  Justice  Story,  in  1824,  of 
the  now  all  but  moribund  "  trust  fund  doctrine"  ali-eady  referred 
to.^  Then  ensued  a  period  of  years  when  the  courts,  one  after 
another,  proceeded  to  adopt  the  doctrine  just  mentioned,  although 
it  was  unknown  to  the  common  law.  Gradually,  however,  it  came 
to  be  recognized  that  the  trust  fund  theory  was  wrong  in  principle 
as  well  as  inequitable,  leading  in  its  practical  operations  to  harsh 
and  unconscionable  results.  This  gradually  led  to  the  adoption 
by  many  courts  of  a  better  and  more  enlightened  doctrine  which 
predicated  the  liability  of  stockholders  to  creditors,  not  upon  the 
trust  fund  doctrine,  but  upon  the  sounder  ground  of  fraud.^ 

1  See  Wood  v.  Dummer,  3  Mason,  U.  S.  Justice  Mitchell  in  Ilospes  v.  Company, 
308.  48  Minn.  174;  50  N.  W.  1117. 

2  See    statement  of  this  doctrine  by 

126 


CHAP.  IV.J      ISSUANCE    AND    PAYMENT   OF   CAPITAL   STOCK.  §  106 

This  was  followed  by  the  enunciation  on  the  part  of  certain 
courts  of  several  important  rules  governing  the  question  of  the 
burden  of  proof  in  cases  where  attempts  were  made  by  creditors 
to  enforce  an  alleged  stockholder's  liability,  on  the  ground  that 
the  property  against  which  such  stock  had  been  issued  had  been 
grossly  over- valued.  A  fair  presentation  of  the  rules  here  referred 
to  may  be  found  in  the  opinion  of  the  Supreme  Court  of  Minnesota, 
in  Hastings  Malting  Co.  v.  Iron  Range  Brewing  Co,,i  reading  as 
follows : 

*'  In  principle  it  can  make  no  difference  whether  the  stock  issued  as 
paid  up  is  bonus  stock,  pure  and  simple,  or  whether  it  was  sold  for 
cash  for  less  than  its  par  value,  or  for  property  at  a  gross  over- 
valuation. In  the  first  two  cases  the  question  of  fraud  would  be  one 
of  law,  for  on  the  issuing  by  the  corporation  of  its  stock  as  paid  and 
its  acceptance  by  the  stockholders  when  in  fact  nothing  was  ever  paid 
for  it,  or  where  a  sum  of  money  less  than  its  par  value  was  paid  and 
accepted  for  it,  there  is  no  opportunity  for  a  mistake  of  judgment; 
the  law  in  such  cases  presumes  an  intention  to  defraud.  Ordinaril}", 
however,  the  question  is  one  of  fact. 

"  Upon  principle  and  authority  a  corporation  may  in  good  faith  issue 
paid  up  shares  of  its  stock  for  the  purchase  of  property  at  a  fair 
valuation,  and  in  such  case  the  corporation  and  its  creditors  are  bound 
by  it. 

"  In  the  practical  application  of  the  rule  it  must  be  kept  in  mind  that 
frauil,  actual  or  constructive,  is  the  basis  of  the  stockholders'  liability 
to  the  creditor.  On  the  one  hand,  the  value  of  the  property  is  to  be 
determined,  not  from  subsequent  events,  but  as  of  the  time  of  the 
transaction,  and  from  the  nature,  situation,  and  condition  of  the  prop- 
erty as  they  honestly  appeared  to  the  parties  at  the  time.  Although 
there  was  in  fact  an  over-valuation  of  the  property,  it  will  not  render 
the  stockholders  liable  for  the  deficiency  if  it  was  the  result  of  an 
honest  mistake  or  error  of  judgment.  On  tlie  other  liand,  where  the 
nature  and  condition  of  the  property  are  such  that  its  value  is  well 
known  and  understood,  or  is  capable  of  being  readily  estimated  and 
ascertained,  and  ♦^.he  property  is  transferred  to  the  corporation  at  a 
gross  over-valuation  for  paid-up  shares,  the  transfer  is  prima  farle 
fraudulent  as  to  subsequent  creditors,  and  as  against  them  the  burden 
is  upon  the  shareholders  to  rebut  the  [(resumption." 

It  is  a  principle  of  law  universally  recognized  that,  except  in 
cases  of  trust  relationships,  the  Ijurdcn  of  proof  in  nil  cases  relative 

1  &.J  Miun.  28  ;  G7  N.  W.  052. 

127 


§100    INCOUrt)l{.\TION  AND    ORGANIZATION    OF   CORPORATIONS.   [PAUT  I. 

to  proof  of  fraud  is  cast  ii[)Oii  the  party  who  alleges  that  such 
fraud  exists.^ 

By  110  stretch  of  the  imagination  can  the  relationship  that  exists 
between  creditors  of  a  corporation  and  the  corporation  itself  be 
termed  a  "  trust  relationship."  The  relation  is  neither  confidential 
nor  fiduciary,  as  the  same  is  construed  by  the  courts.^  There  is 
no  more  reason  for  treating  this  relationship  as  one  of  trust  than 
there  is  in  the  case  of  ordinary  creditors  and  debtors.  It  was 
doubtless,  however,  as  a  sort  of  concession  to  the  fanciful  trust 
fund  doctrine  of  Justice  Story,  that  there  early  appeared  a  ten- 
dency, upon  the  part  of  certain  courts,  to  engraft  thereon  the 
absurd  principle  that,  where  the  board  of  directors  of  a  corporation 
have  duly  appraised  in  the  first  instance  property  taken  by  the 
latter  in  exchange  for  its  capital  stock,  the  rule  should  obtain 
that  where  such  property  has  a  well  known  or  easily  ascertained 
value,  and  is  taken  at  a  valuation  wiiich  to  the  court  seems 
greatly  in  excess  of  its  real  value,  then  in  such  cases  it  will  be 
presumed  that  such  valuation  is  not  made  in  good  faith,  but  is 
made  for  a  fraudulent  purpose.  To  overcome  this  presumption 
the  burden  is  upon  the  stockholders  to  introduce  satisfactory 
evidence  explanatory  of  this  presumptively  fraudulent  over- 
valuation. Some  courts  even  w^eiit  further,  and  asserted  that 
where  the  over-valuation  was  so  great  that  the  fraudulent  inten- 
tion appeared  on  its  face  and  it  is  not  explained,  it  should  be  held 
fraudulent  as  a  matter  of  law,  without  submitting  the  question  to 
a  jury. 

These  drastic  rules  had  full  sway  for  a  number  of  years,  until 
certain  of  the  courts  saw  fit  to  modify  their  rigor  to  no  inconsider- 
able extent.  Then  the  rule  was  enunciated  that  where  stock  has 
been  paid  for  either  in  property  or  services,  although  it  ai)pear8 
that  there  was  an  over-valuation  in  appraising  the  same,  yet  if  it 
appears  to  the  court  not  to  be  so  gross  and  unconscionable  as  to 
compel  it  to  say,  as  a  matter  of  law,  that  it  must  have  been  inten- 
tional, it  will  be  presumed  that  the  valuation  was  honestly 
made,  and  the  burden  of  attacking  the  same  will  be  upon  the 
creditors  who  seek  to  hold  the  stockholders  upon  an  alleged 
stockholders'  liability  for  unpaid  stock  subscriptions.^ 

1  See  Phelan  v.  Hazard,  5  Dil.  45;  -N.  E.  725;  Davis  Bros.  v.  Company,  101 
Bickley  v.  Schlag,  46  N.  J.  Eq.  533.  Ala.  127  ;  8  S.  W.  496 ;  Manhattan  Trust 

2  See  Robinson  v.  Pope,  57  Cal.  496.         Co.  v.  Company,  16  Wash.  499  ;  48  Pac. 
8  Coleman  v.   Howe,  154   111.  458;  39     333. 

128 


CHAP.  IT.]      ISSUANCE   AND    PAYMENT   OF   CAPITAL   STOCK.  §  106 

So  much,  then,  for  the  historical  development  of  the  various 
doctrines  relative  to  the  subject  matter  now  before  us.  Turning 
again  to  consider  the  "  speculative  value  rule,"  the  same  must 
be  looked  at  from  two  separate  and  distinct  standpoints,  to  wit  : 
(1)  as  dividing  all  properties  which  a  corporation  proposes  to 
take  over  in  exchange  for  its  capital  stock  into  two  broad  and 
well-defined  classes,  known  respectively  as  "speculative"  and 
"  non-speculative "  properties ;  (2)  as  establishing  a  rule  for 
appraising  the  value  of  speculative  properties  based  not  upon  the 
intrinsic  value  of  the  same,  but  rather  upon  their  availability  for 
purposes  of  speculation,  looking  towards  an  enhancement  of  their 
present  value  by  the  future  expenditure  of  funds  in  the  develop- 
ment thereof. 

Let  us  now  turn  our  attention  to  the  classification  of  properties 
above  referred  to  designated  as  "speculative"  and  " non-specula- 
tive." "  Speculative  "  properties  may  be  defined  as  those  whose 
nature  is  such  that  they  have  not  only  a  present  intrinsic  value, 
but  a  considerable  potential  value  as  well,  speculative  in  its 
nature,  and  dependent  upon  future  development  in  order  to  arrive 
at  a  definite  estimation  as  to  the  amount  thereof.  Non-specula- 
tive properties,  on  the  other  hand,  are  those  whose  intrinsic 
worth  alone  gives  them  a  market  value  or  a  value  which  can  be 
easily  ascertained  by  reference  to  well-recognized  standards  of 
value.  In  the  first  class  of  properties  might  be  enumerated 
mining  rights,  patent  rights,  oil  and  gas  lands,  secret  processes 
and  trade  secrets,  patent  medicines,  etc.  In  the  second  class 
might  be  named  real  estate  to  be  employed  for  business,  dwelling, 
farming,  and  grazing  purposes,  stock  in  trade  and  personal  prop- 
erty wliich  is  the  common  sul>jcct  of  bargain  and  sale  between  man 
and  man  at  current  prices,  determined  by  the  law  of  supply  and 
demand.  In  the  opinion  of  the  Supreme  Court  of  Minnesota,  in 
ITastings  Malting  Comi)nny  v.  Iron  Rnnge  Brewing  Comi)any, 
cited  above,  it  will  be  noted  tliat  the  rule  that  is  to  be  applied  in 
those  cases  where  the  nature  and  condition  of  the  jjroperty  arc  such 
that  its  value  is  well  known  or  understood,  or  is  capable  of  being 
readily  estimated  and  ascertained,  is  clearly  stated.  The  oi>inion, 
however,  fails  to  state  with  equal  clearness  the  rule  that  is  to  be 
applied  where  the  value  of  the  property  is  not  of  the  character 
just  described,  but  is  of  that  type  herein  referred  to  as  "  8i)ecu- 
lative,"  having  no  present  or  well-known  readily  ascertained 
9  129 


§  lOG    TNCORPOUATION  AND   ORGANIZATION   OF   CORPORATIONS.  [PARTT. 

value,  Imt  depeiuling  entirely  upon  future  development  in  order  to 
determine  what  such  value  may  be.  By  implication  only  is  the 
true  rule  in  such  cases  suggested  by  the  Minnesota  court.  How- 
ever, in  Kelly  v.  Clark,'  the  Montana  Supreme  Court  in  effect 
declares  the  rule  in  such  cases  to  be  that  where  the  property  is 
speculative  in  character,  and  as  such  the  alleged  over-valuation 
thereof  may  have  been  possibly  due  to  errors  in  judgment,  then  the 
burden  of  proof  is  upon  the  creditors  seeking  to  attack  the  valu- 
ation by  showing  actual  fraud  in  the  transaction. 

Let  us  turn  now  to  the  question  as  to  how  the  valuation  of  spec- 
ulative properties  is  to  be  ascertained.  Generally  speaking,  the 
rule  to  be  adopted  is  this :  "  What,  under  all  the  circumstances, 
considering  the  proposed  use  to  which  it  is  to  be  put,  and  the  gen- 
eral purpose  for  which  the  corporation  was  created,  is  the  fair 
value  of  the  property  against  which  its  capital  stock  is  to  be 
issued  ?"  2  In  this  age  of  speculative  enterprises  it  is  a  matter  of 
common  knowledge  that  the  value  of  properties  taken  over  by 
corporations  about  to  embark  in  speculative  enterprises  is  depend- 
ent almost  wholly  upon  their  availability  for  the  purpose  in  hand 
and  upon  the  promise  which  external  appearances  give  them  as 
to  their  having  a  large  and  considerable  potential  value.  Thus, 
for  example,  sixty  square  feet  of  land  may  have  a  very  small 
intrinsic  value  when  considered  as  farming,  grazing,  or  residence 
property,  and  yet  possess  an  immense  potential  value  when  treated 
as  mining  property.  It  is  the  expectation  of  success  which  in- 
duces investors  to  put  their  money  into  such  enterprises,  and 
which  justifies  a  valuation  far  in  excess  of  the  property's  intrinsic 
value.  Such  valuations,  it  must  be  admitted,  are  necessarily 
arl)itrary  in  character.  This  fact  the  legislatures  in  many  States 
have  recognized,  and  the  courts  should  not  hesitate  to  do  the 
same.'^ 

The  value  of  property  which  is  transferred  to  the  corporation 
is  also  not  to  be  estimated  by  what  it  cost  the  promoter.  It  is  the 
speculative  and  experimental  results  which  afford  a  basis  for  the 
large  valuation.  By  value  in  such  cases  is  meant  the  speculative 
value  for  the  uses  and  purposes  of  the  company  in  its  proposed 
speculative  enterprise,  and   not  the  actual  market  value  or  .the 

1  21  Mont.  291  ;  53  Pac.  959.  «  See   Civil   Code    of  Montana,   1895, 

2  See  Gamble  v.  Company,  123  N.  Y.     §  410. 
91;  25  N.  E.  201. 

130 


CHAP.  IV.]      ISSUAN'CE    AND    PAYMENT    OF    CAPITAL    STOCK.  §  lOG 

actual  intrinsic  value  thereof  at  the  time  the  properties  are  taken 
over  by  the  company. 

The  view  of  the  matter  here  presented  was  first  suggested,  it  is 
believed,  by  the  United  States  Circuit  Court  many  years  ago  in  the 
ease  of  the  South  Mountain  Consolidated  Mining  Co.^  At  the  trial 
below  in  tliis  case  the  court  spoke  as  follows : 

"The  mode  in  which  mining  companies  are  formed  is  familiar  to 
all.  The  owners  of  the  property,  or  persons  expecting  to  become 
such,  by  complying  with  a  few  simple  formalities  form  themselves 
into  a  corporation,  to  which  the  property  is  conveyed.  The  amount 
of  capital  stock  which  is  required  to  be  stated  in  the  certificate  of 
incorporation  is  usually  fixed  at  a  purely  arbitrary  sum,  and  divided 
into  as  many  shares  as  convenience  or  caprice  may  dictate.  It  neither 
bears  nor  is  intended  nor  supposed  by  the  public  to  bear  the  slight- 
est relation  to  the  real  value  of  the  property  —  a  value  nearly  always 
conjectural  and  very  often  imaginary." 

In  this  same  case  on  appeal  the  court  observed  as  follows :  ^ 

"  The  mode  of  forming  mining  corporations  is  well  known  to  any- 
body. A  prospector  finds,  as  he  supposes,  a  valuable  mine.  It 
requires  capital  to  work  it  which  he  does  not  possess.  He  goes 
to  the  money  and  business  centres,  where  he  finds  capitalists  accus- 
tomed to  organize  corporations  for  the  development  of  new  mines, 
and  makes  such  arrangements  as  he  can.  He  presents  such  evidence 
of  the  value  of  his  mine  as  he  has  obtained.  Little  is  known  of  the 
real  value.  It  may  be  worth  nothing  and  it  may  be  worth  millions. 
Parties  are  found  willing  to  take  hold  of  the  enterprise.  They  agree 
to  incorporate  and  fix  the  capital  stock  at  some  purely  nominal  amount, 
and  divide  it  into  a  certain  number  of  shares,  corresponding  to  the 
amount  of  capital  adopted.  The  owner  of  the  mine,  for  an  agreed 
number  of  shares  and  in  consideration  of  the  promises  of  the  other 
parties  to  assist  in  the  development  of  the  mine,  conveys  the  mine 
and  receives  for  it  the  amount  of  stock  agreed  upon.  The  other 
l)rirties,  for  their  services  in  organizing  and  managing  the  company  and 
its  business,  receive  a  large  portion  of  the  stock,  this  being  usually  a 
considfrable  amount  of  stock  reserved  by  tlie  company,  which  is  put 
upon  the  market  and  sold  for  such  price  as  can  Ik;  obtained,  to  raiso 
a  fund  to  secure  machinery  and  develop  the  mine.  The  price  of  this 
stock  is  of  course  determined  by  the  prospect  of  tlie  mino,  its  location, 
and  its  probalde  richness,  and  the  confidence  of  the  public  reposed  in 

1  7  Sawyer,  30 ;  8  Sawver,  306.  ^  8  Sawyer,  U.  S.  366. 

131 


§100    INCORrORATION  AND  ORGANIZATION  OF  CORPORATIONS.   [PART  I. 

the  experience,  ability,  and  character  of  those  having  the  management. 
[Mining  corporations  are  sii  i  generis.  They  are  organized  and  carried  on 
ui)on  principk'S  wholly  different  from  banking,  railroad,  insnrance,  and 
ordinary  commercial  corporations  having  a  subscribed  capital  stock. "^ 

But  nowhere  is  the  speculative  element  in  the  valuation  of 
property  better  considered  than  by  the  Supreme  Court  of  Penn- 
sylvania, in  the  case  of  Iron  Co.  et  al.  v.  Hays  et  al?  The  facts 
in  this  case  briefly  stated  arc  as  follows  : 

A  corporation  was  organized  by  two  co-partners  to  take  over 
certain  lands  owned  or  leased  by  them  and  believed  to  contain 
gas  and  oil.  They  capitalized  the  company  for  1500,000,  and 
issued  the  whole  of  its  capital  stock  to  themselves  against  the 
properties  above  referred  to.  These  latter  had  an  intrinsic  value 
representing  but  a  very  small  percentage  of  the  capitalization  of 
the  company.  The  incorporators  retained  1175,000  of  the  capital 
stock  of  the  corporation  for  their  own  benefit,  and  transferred 
the  balance  to  the  corporation  in  trust  to  be  sold  by  the  board  of 
directors  thereof  for  the  purpose  of  procuring  working  capital  for 
the  corporation.  Later  on,  the  lands  proved  to  be  practically 
worthless,  and  the  company  became  insolvent,  and  creditors 
thereof  sued  the  stockliolders,  alleging  tliat  the  stock  held  by 
them  had  not  been  fully  paid  for.  In  passing  upon  the  various 
legal  questions  involved,  the  court  spoke  as  follows : 

"  Attention  should  be  called  first  to  the  method  of  organization,  to 
the  facts  showing  the  situation  of  the  parties,  the  necessity  for  ob- 
taining corporate  powers,  and  the  provision  made  for  a  working  capi- 
tal with  which  to  enter  upon  the  proposed  corporate  enterprise. 

"The  corporators  had  been  partners.  As  such  they  had  been  en- 
gaged in  procuring  leases  and  drilling  wells  in  search  for  oil.  In 
their  search  they  had  not  been  successful,  but  two  of  the  wells  drilled 
by  them  proved  to  be  valuable  gas  wells.  This,  taken  in  connection 
with  other  developments  in  the  same  general  region,  was  well  calcu- 
lated to  induce  the  belief  that  they  were  the  possessors  of  a  large  and 
valuable  gas  territory  that  should  be  promptly  developed  and  utilized 
or  its  value  would  steadily  decline  by  reason  of  drainage  from  the 
operation  of  others.  They  could  not  utilize  their  gas  without  trans- 
porting it  to  a  market.  They  could  not  transport  it  to  advantage 
except  as  a  natural  gas  company  possessing  the  powers  conferred  by 

1  In  re  South  Mountain  Con.  Min.  Co.,         2  i65  Pa.  St.  489  ;  30  Atl.  936. 
8  Saw.  366. 

132 


CHAP.  IV.]      ISSUANCE   AND   PAYMENT   OF   CAPITAL   STOCK.  §  106 

law.  This  determined  them  to  organize  a  corporation  for  the  pro- 
duction and  transportation  of  natural  gas  and  to  transfer  their  gas 
wells  and  leases  to  the  corporation.  When  this  had  been  decided  on, 
the  first  question  to  present  itself  was,  how  shall  the  partnership  con- 
vey its  property  to  the  corporation  so  as  to  secure  to  its  members  the 
same  relative  interest  in  the  stock  of  the  corporation  they  now  have 
in  the  partnership  property?  The  next  question  was,  how  shall  we 
secure  the  necessary  working  capital  to  enable  the  corporation  to  go 
forward  with  the  work  of  producing,  transporting,  and  selling  natural 
gas?  In  a  general  wa}-  these  questions  were  answered  by  the  adop- 
tion of  the  scheme  alreadj"-  referred  to.  The  value  of  the  properties 
held  by  the  firm  was  set  down  at  $175,000,  the  working  capital  needed 
at  $0-5,000.  To  meet  both  purposes  the  capital  stock  of  the  corpora- 
tion was  fixed  at  $500,000.  It  was  all  to  he  issued  as  paid  up  stock  in 
exchange  for  the  pn'opertij  conveyed  to  the  corporation,  subject  to  the 
agreement  that  all  except  $175,000  thereof  was  to  be  contributed  to 
the  treasury  to  be  sold  as  a  means  of  raising  the  money  needed  for  a 
working  capital.  .  .  . 

"  In  what  respect,  then,  have  the  defendant  stockholders  failed  in  the 
performance  of  tlieir  undertaking  to  the  corporation  ?  The  scheme 
was  to  turn  over  all  the  gas  wells,  leases,  etc.  to  the  corporation  for 
$175,000,  and  provide  it  with  the  means  of  prosecuting  the  gas  busi- 
ness hij  putting  into  its  trcdsurt/  jjaid  up  stucic,  or  what  should  be  sold  as 
paid  up  stock,  to  the  amount  of  $325,000  more.  .  .  . 

"  The  court  below  found  'that  the  facts  in  evidence,  connected  with 
the  fact  that  within  a  few  months  it  was  demonstrated  that  the  prop- 
erty was  of  very  small  value,  threw  on  the  stockholders  the  burden  of 
showing  clearly  that  the  sale  from  themselves  to  themselves  was  in 
good  faith  on  a  reasonable  belief  in  the  value  of  the  property.'  But 
vihat  has  the  fact  that,  after  some  months  spent  in  development  of  their 
territorij,  the  corpjoration  found  itself  disappointed  in  its  productiveness 
and  a  heavy  loser  in  consequence,  to  do  with  the  good  faith  of  their  jiur- 
chase  or  the  reasonableness  of  the  price  ? 

"  These  are  to  be  judged  of  by  the  facts  before  them  when  the  arrange- 
ment was  made.  The  rharactir  of  the  gas  wells  already  opened,  the 
extent  of  the  territory  rorcn-d  by  tit  e  lenses,  its  relation  toother  develo})- 
ments,  its  nearness  to  an  adequate  market,  and  the  probable  duration  of 
the  fi'ipi'ly  within  reach,  were  the  considerations  that  wotild  affect  the 
Judgment  of  buyers  and  sellers  and  of  the  business  public  us  to  its  value. 
The  subsequent  disappointment  must  therefore  be  left  out  of  the  case,  and 
tlte  transaction  examined  in  the  light  in  which  it  was  seen  when  the 
(irningement  ivas  entered  into.  When  this  is  done  and  the  absence  of 
mi  If  suqgestion  or  finding  of  fraud  is  remembered,  it  is  not  easy  to  see 

133 


§106    INCORPORATION  AND    ORGANIZATION   OP    CORPORATIONS.  [PARTI. 

what  there  is  in  the  case  to  shift  the  burden  of  proof  or  to  rci/nirr  ilie. 
stoekhohlers  to  establish  the  good  faith  of  the  transaction  ichieh,  the 
plaint iffs  have  not  attacked.  The  action  proceeds  on  the  theory  that 
the  subscriptions  to  the  capital  stoclc  are  wholly  unpaid.  The  proofs 
show  that  they  were  paid  exactly  in  accordance  with  the  agreement,  and 
that  this  payment  had  been  recognized  by  the  corporation  from  the 
first.  The  decree,  as  finally  made,  seems  to  rest  on  tlie  conidusion  that 
although  paid  they  were  paid  in  property  wliich  was  taken  at  too  high  a 
price.  It  is  true  that  no  sucli  tiling  was  alleged  in  the  bill  or  sliown  in 
the  proofs,  but  if  the  value  of  the  property  is  to  be  determined  in  the 
light  of  subsequent  events,  a  light  which  the  parties  did  not  have  wdien 
this  sale  was  arranged,  the  conclusion  of  the  court  below  would  be 
reasonable.  The  trouble  with  it,  however,  is,  that  it  rests  on  the  in- 
trinsic value  of  the  property  as  ascertained  by  actual  developments 
made  after  the  sale,  while  the  real  question  relates  to  the  apparent  value 
as  indicated  by  the  circumstances  existing  at  the  time  of  the  sale.  .  .  . 
"  We  should  agree  with  the  court  below  that  the  property  was  sold 
at  more  than  its  actual  value,  if  that  value  was  to  be  determined  by 
subsequent  results  rather  than  by  prospects  as  they  appeared  at  the 
time  of  sale.  But  if  the  parties  were  mistaken  in  relation  to  its  value, 
we  do  not  see  how,  in  the  absence  of  any  averment  of  fraud  in  the 
transaction,  the  sale  can  be  disregarded  and  the  subscriptions  to  the 
capital  stock  treated  as  unpaid.  The  proofs  show  that  they  were 
paid  exactly  in  accordance  with  the  agreement  under  which  they 
were  made,  and  until  that  agreement  is  attacked  as  fraudulent,  the 
creditors  stand  in  no  better  position  than  the  corporation  itself.  The 
decree  is  reversed  so  far  as  it  requires  payment  of  the  stock  subscrip- 
tions or  any  part  thereof."  ^ 

So  much,  then,  for  the  question  as  to  the  proper  basis  for  ap- 
praising property  of  a  speculative  character  when  the  same  is 
transferred  to  the  corporation  in  exchange  for  its  capital  stock. 
Let  us  add  a  few  more  words  to  what  was  said  in  the  foregoing 
opinion  relative  to  the  question  as  to  where  the  burden  of  proof 
lies  in  such  cases,  when  the  valuation  placed  upon  the  property  is 
impeached  by  creditors  who  seek  to  enforce  an  alleged  stock- 
holder's liability  for  unpaid  stock  subscrii)iions.  Let  us  note  in 
this  connection,  first,  tlie  statement  of  the  law  made  by  the  Court 
of  Appeals  of  Maryland  in  Brandt  v.  Elilen,^  where  the  court 
observed  "  we  take  the  law  to  be  well  settled,  that  a  company 

1  See  also  Kelly  v.  Clark,  21    Mont.  2  59  jia.  1. 

291  ;    53    Pac.    959 ;    Montana    Ry.    Co. 
V.  Warren,  6  Mont.  275;  12  Pac.  641. 
134 


CHAP.  IV.]      ISSUANCE   AND    PAYMENT   OF   CAPITAL   STOCK.  §  106 

may  receive,  in  payment  of  the  shares  of  its  capital  stock,  any 
property  which  it  may  lawfully  purchase.  So  long  as  the  trans- 
action stands  unimpeached  for  fraud,  the  courts  will  treat  as 
a  payment  that  which  the  parties  shall  agree  to  be  a  payment,  and 
this  too  in  cases  where  the  rights  of  creditors  are  involved."  The 
Supreme  Court  of  Massachusetts  in  a  recent  case^  observed  that 
it  appears  to  l)e  well  settled  that  in  the  absence  of  fraud  an  agree- 
ment can  ordinarily  be  made  by  which  stockholders  can  be 
allowed  to  pay  for  their  shares  in  patents,  mines,  or  other  property 
to  which  it  is  not  easy  to  assign  a  determinate  value.  At  least, 
one  court  of  high  authority  has  adopted  the  rule  that  where  one 
becomes  a  creditor  of  a  corporation  knowing  the  manner  in  which 
its  stock  has  been  paid,  he  is  deemed  to  waive  his  right  to  assert 
that  there  has  been  an  over-valuation  of  the  property  against  which 
the  corporation  issued  its  stock.^  It  is  to  go  but  a  step  for- 
ward to  say  that  in  the  case  of  corporations  engaged  in  speculative 
enterprises  it  is  a  matter  of  common  knowledge  that  shares  are  to 
be  paid  for  in  property  appraised  at  its  potential  rather  than  its 
present  intrinsic  value,  and  that  therefore  the  rule  stated  above 
should  ol)tain,  even  in  the  absence  of  actual  knowledge  on  the  part 
of  creditors  as  to  the  manner  in  which  the  capital  stock  of  the 
corporation  liad  been  issued.  Again,  where  stock  has  been  paid  for 
by  the  conveyance  of  property  to  a  corporation  of  the  character 
known  as  "speculative"  and  u{)on  which  a  valuation  has  been 
placed,  —  not  its  present  intrinsic  value,  but  rather  its  prospective 
value  after  development  thereof,  —  then  in  such  cases  the  courts 
should  presume  that  the  valuation  was  honestly  made  and  place  the 
burden  upon  the  creditor  of  attacking  the  transfer.^ 

The  ordinary  practice,  as  has  been  observed,  is  for  corporations 
engaged  in  non-speculative  enterprises  to  issue  stock  for  property 
which  has  a  well-recognized  market  value  or  one  which  can  be 
easily  ascertained.  In  regard  to  such  corporations,  wIkm'c  the  nature 
and  condition  of  its  property  is  such  that  its  value  is  well  known  or 
understood  or  is  capable  of  being  readily  estimated  and  ascertained, 
and  the  same  is  transferred  to  the  corporation  at  a  gross  over- 
valuation ffjr  [)aid  uj)  shares,  it  would  unqucsti<uiably  be  proper 

1  N.  II.  II.  X.  Co.  V.  Company,  142  8  So.  -196;  (;..l(,iii;iii  v.  IIowc,  l.')4  111. 
Maas.  .349,  7  N.  E.  773.                       "  4r)H  ;  .T.)  N.  E.  7^2.5 ;  Carr  v.  Lc  Fcvre,  27 

2  C.allaiian  i-.  Windsor,  78  la.  193;  I'a.  St.  489 ;  Shield  i-.  Company,  94  Teun. 
42  N.  W.  r,r,2.  123 ;  28  S.  W.  668. 

3  Davis   V.   Company,    101    Ala.    127; 

1:J5 


vJlOl)    INCORPORATION  AND  ORfiANIZATION  OF  CORPORATIONS.    [PART  I. 

for  coui-ts  to  treat  such  transactions  as  presumptively  fraudulent, 
and  to  place  the  burden  of  i)roof  upon  the  stockholders  in  such 
cases  to  rebut  such  presumption  by  clear  and  satisfactory  proof. 
On  the  other  hand,  where  the  corporation  is  engaged  in  specula- 
tive enterprises  of  the  character  above  referred  to,  and  stock  is 
issued  against  property  accepted  by  the  corporation  at  a  valuation 
not  based  upon  the  present  intrinsic  value  of  the  same,  but  avow- 
edly (as  is  the  universal  custom)  at  its  potential  speculative  value 
(to  be  determined  after  development  thereof  by  the  corporation 
which  has  acquired  the  property),  then  the  practical  attitude  for 
the  courts  to  take  in  such  cases  would  be  to  adopt  what  is  termed 
here  the  "speculative  value  rule,"  and  to  attach  to  the  valuation 
placed  by  the  corporation  upon  such  property  the  presumption 
that  it  was  honestly  made,  and  place  the  burden  of  proof  in  such 
cases  upon  the  creditor  attacking  the  transaction.  In  practical 
operation  it  will  be  found  that  the  shifting  of  the  burden  of  proof 
would  be  equivalent  in  nearly  all  cases  to  making  the  valuation 
placed  upon  the  property  in  any  case,  whether  speculative  or  non- 
speculative  in  character,  conclusive  respectively  upon  the  stock- 
holders and  the  creditors.  The  reason  of  this  is  that  in  the  case  of 
non-speculative  properties  it  is  easy  to  demonstrate  that  the  same 
has  been  grossly  overvalued ;  as,  for  example, by  showing  the  market 
value  of  the  same.  Again,  in  the  case  of  speculative  enterprises 
the  same  is  true  for  the  reason  that  the  valuation  placed  upon  the 
properties  from  a  speculative  standpoint,  if  honest  and  fair,  would 
be  such  as  to  render  it  practically  impossible  as  a  matter  of  proof 
to  show  that  such  valuation  was  fraudulent  or  grossly  overvalued, 
—  this  for  the  reason  that  in  every  such  case  it  will  be  found  that 
there  exists  an  immense  margin  for  honest  difference  of  opinion, 
and  although  it  may  appear  that  there  were  serious  errors  of  judg- 
ment, nevertheless  it  will  be  found  in  practice  that  such  valu- 
ations should  not  and  will  not  be  set  aside  except  for  actual  fraud. 

It  is  the  recognition  of  the  necessity  of  shifting  the  burden  of 
proof  according  to  wdiether  the  proi)erty  against  which  stock  is 
issued  is  speculative  in  character  or  not,  which,  in  connection 
with  the  basis  of  appraisal  already  referred  to,  affords  a  practical 
basis  for  the  operation  of  the  speculative  value  rule.  Finally,  the 
following  may  be  said  : 

Upon  principle  and  in  the  interest  of  justice  both  to  the  stock- 
holders and  creditors  alike,  in  determining  the  question  whether 
13G 


CHAP.  IV.]      ISSUANCE   AND   PAYMENT   OF   CAPITAL   STOCK.  §  107 

stock  has  been  in  fact  fully  paid,  the  line  should  be  drawn  with 
the  utmost  clearness  and  distinctness  between  ordinary  corpora- 
tions such  as  trading,  mercantile,  banking,  insurance,  etc.,  whose 
capital  stock  is  formally  subscribed  for  and  ordinarily  paid  in  in 
cash  or  in  real  and  personal  property  having  a  well-recognized  or 
easily  established  market  value  on  the  one  hand,  and  those  cor- 
porations on  the  other  hand  incorporated  for  the  express  and 
avowed  purpose  of  engaging  in  speculative  enterprises  —  such,  for 
example,  as  corporations  organized  to  take  over  mining  properties, 
oil  and  gas  lands,  patent  and  patent  rights,  secret  processes,  con- 
cessions, franchises,  etc.  In  this  era  of  speculative  enterprises 
the  courts  can  no  longer  remain  blind  to  the  fact  that  the  stock  of 
such  corporations  is  not  intended  by  the  incorporators  or  under- 
stood by  the  creditors  or  the  public  generally  to  represent  any- 
thing but  certain  property  having  a  speculative  value,  which  may 
or  may  not  ultimately  prove  to  be  worth  the  par  value  of  the  stock 
against  which  the  latter  has  been  issued.  The  credit  obtained  by 
such  corporations  concerning  which  the  courts  have  in  the  past 
displayed  such  intense  solicitude  in  the  interest  of  creditors  to  the 
exclusion  of  the  interests  of  equally  meritorious  stockholders,  is 
seldom,  if  ever,  extended  to  the  corporation  without  full  knowl- 
edge on  the  |)art  of  creditors  as  to  the  nature  of  the  assets  of  the 
corporation,  or  as  to  the  manner  in  which  the  stock  has  been 
issued  in  exchange  for  property  of  a  speculative  value. 

§  107.  Effect  of  Appraisal  of  Property  by  Directors  under  Stat- 
utory Authority,  -when  taken  in  Exchange  for  Stock.  —  The  incor- 
j)oration  acts  of  Connecticut,  Delaware,  Maine,  Montana,  New 
Jersey,  New  York,  North  Carolina,  South  Carolina,  Virginia,  and 
West  Virginia  all  contain  provisions  relating  to  the  effect  of  ap- 
praisal of  property  by  directors  when  taken  by  the  corporation  in 
exchange  for  its  capital  stock.  The  provisions  of  the  New  Jersey 
act  may  be  given  as  an  example  of  such  legislation.  The  statute 
referred  to  reads  as  follows  :  ^ 

"  Any  corporation  formed  under  this  act  may  purchase  mines, 
manufactories,  or  other  property  necessary  for  its  business  or  the 
stock  of  another  company  or  companies  owning  a  mine,  manufactory, 
or  producing  mills  or  other  property  necessary  for  its  business,  and 
issue  stock  to  the  amount  of  the  value  tlicreof,  in  i)ayment  therefor, 

1  Puhlic  Laws  of  New  Jersey,  18'.»f.,  ch.ip.  85,  §  49. 

i;j7 


§107    INCORPORATION   AND  ORGANIZATION  OF  CORrORATIONS.    [PART  I. 

and  the  stock  so  issued  shall  br  fidl-jiaid  stock  mid  not  liable  to  any 
fiu'ther  call,  nor  shall  the  holder  thereof  be  liable  for  any  further  pay- 
ments under  any  of  the  provisions  of  this  act,  and  in  tlie  absence  of 
actual  fraud  in  the  transaction  the  judgment  of  the  directors  as  to 
the  value  of  the  property  purchased  shall  be  conclusive." 

In  commentingupoii  the  foregoing  section  in  the  case  of  Donald 
V.  American  Smelting tt  Refining  Co.,^  the  court  spoke  as  follows: 

"  The  distinction  between  the  contemplated  issue  of  corporate  stock 
for  property  and  its  issue  for  money  lies  not  in  the  rule  for  valuation, 
but  in  the  fact  that  different  estinaates  may  be  formed  of  the  value  of 
property.  When  such  differences  are  brought  before  judicial  tribunals, 
the  judgment  of  those  who  are  l^y  law  entrusted  with  the  power  of 
issuing  stock  to  the  amount  of  the  value  of  the  property,  and  upon 
whom  therefore  is  placed  the  first  duty  of  valuing  the  property,  may 
be  accorded  considerable  weight.    But  it  cannot  be  deemed  conclusive 
when  duly  subjected  to  judicial  scrutiny,  nor  is  it  necessary  that  con- 
scious over-valuation  or  any  form  of  fraudulent  conduct  on  the  part 
of  its  primary  valuers  should  be  shown  to  justify  judicial  interposi- 
tion.    Their  honest  judgment,  if    reached  without  due  examination 
of  the  elements  of  value,  or  if  based  in  part  upon  an  estimate  of  mat- 
ters which  really  are   not  property,  or  if  plainly  weighed  by  self- 
interest,  may  lead  to  a  violation  of  the  statutory  rule  as  surely  as  would 
corrupt  motives.     The  original  issue  of  corporate  stock  is  a  special 
function  in  the  exercise  of  which  the  legislature  has  fixed  the  stand- 
ard to  be  observed,  and  it  is  the  duty  of  the  courts,  so  far  as  their 
jurisdiction  extends,  to  see  that  this  standard  is  not  violated  either 
intentionally  or   unintentionally.      When  corporate  stock  has  once 
been  issued  for  property  purchased,  then  the  legislature  has  directed 
the  application  of  a  different  rule.     In  the  words  of  the  statute,  '  the 
stock  so  issued  shall  be  full-paid  stock,  and  not  liable  to  any  further 
call,  neither  shall  the  holder  thereof  be  liable  for  any  further  payment 
under  the  provisions  of  this  act  ;  and  in  the  absence  of  actual  fraud 
in  the  transaction  the  judgment  of  the  directors  as  to  the  value  of  the 
property  purchased  shall  be  conclusive.    Under  these  provisions,  after 
the  property  has  been  purchased  and  the  stock  issued  therefor,  noth- 
ing short  of  actual  fraud  in  the  transaction  can  impair  the  right  of  the 
holder  to  hold  his  stock  as  full-paid  stock,  free  from  further  call.'  "  ^ 

1  61  X.  .1.  Eq.  45S  ;  48  Atl.  786.  45    W.    Va.  134  ;  30  S.  E.  92 ;  Clark  v. 

2  See  also  Wetherbee  v.  Baker,  3,5  N.  .J.  Bever,  139  U.  S.  96 ;  11  S.  Ct.  468  ;  Fogg 
Eq.  501  ;  Bank  v.  Lumber  Co.,  32  W.  Va.  v.  Blair,  139  U.  S.  118;  11  S.  Ct.  496; 
357  ;  9  S.  E.  243 ;  Richardson  v.  Graham,  Liebke  v.  Knapp,  79  Mo.  22. 

138 


CHAP.  IV.]     ISSUANCE   AND   PAYMENT   OF   CAPITAL   STOCK.  §  108 

§  108.  Effect  of  Appraisal  of  Value  of  Property  by  State  Officials 
when  the  same  is  taken  by  Corporations  in  Exchange  for  their 
Capital  Stock.  —  Owing  to  the  conflicting  decisions  of  tlie  courts 
of  the  various  States  relative  to  what  does  and  what  does  not  con- 
stitute as  against  creditors  full  payment  of  the  capital  stock  of  a 
corporation,  attempts  have  been  made  by  the  legislatures  of 
a  number  of  the  States  to  remedy  this  situation  by  means  of  stat- 
utory enactments.  Such  legislative  enactments  may  be  said  to  be 
indicative  of  the  public  policy  of  the  State  in  that  regard.  The 
"  public  policy  of  the  State,"  as  the  term  is  used  in  this  connec- 
tion, frequently  varies  from  time  to  time.  In  the  absence  of 
express  statutes  of  the  character  here  referred  to,  it  has  been  said 
that  it  is  not  to  be  measured  by  the  private  combinations  or  notions 
of  the  persons  who  happen  to  be  exercising  judicial  functions,  but 
by  reference  to  the  enactments  of  the  law-making  power,  and  in 
the  absence  of  them  to  the  decisions  of  the  courts.  When,  how- 
ever, the  legislature  has  spoken  on  a  particular  subject  and  within 
the  limits  of  its  special  powers,  its  utterance  then  becomes  the 
public  policy  of  the  State. ^  In  view  of  the  fact  that  the  near 
future  is  likely  to  see  many  attempts  by  other  legislatures  to 
solve  the  question  here  referred  to  by  the  enactment  of  statutes 
governing  the  same,  the  matter  now  under  consideration  should 
receive  careful  attention. 

It  is  a  fair  supposition  to  say  that  the  passage  of  such  acts  in 
this  country  originated  doubtless  in  a  desire  to  transfer  to  this 
country  certain  sections  of  what  is  known  as  the  "  English  Com- 
pany's Act  of  18G7."  Under  the  act  just  referred  to,  corporations 
which  desired  to  accept  property  in  exchange  for  their  capital 
stock  were  required  to  register  in  a  designated  government  office 
a  description  of  the  projjcrty  against  which  any  particular  cor- 
jtoration  proposed  to  issue  its  full-paid  shares.  The  construction 
by  the  Kugiish  coui'ts  put  upon  this  section  oi  the  l'>ii,i;Tish  Com- 
j)any's  Act  docs  not  seem  to  give  to  the  legislative  provision 
referred  to  the  full  effect  which  is  claimed  for  such  statutes  in  this 
country.  In  substance  the  holding  of  the  English  courts  in 
this  regard  is  as  follows  : 

That  where  the  property  is  so  registered  under  the  act  it  is  not 
unlawful  for  tlic  vendor  to  sell  such  property  to  the  corporation  in 

1  See  MacGinniss  v.  Company  (Mont.),  75  Pac.  8'J  ;  United  Statjs  v.  Association, 
1G6  U.  S   2'JO;  17  S.  Ct.  540. 

139 


§108    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

excliaugo  lor  stock  having  a  par  value  in  excess  of  wliai  the  vendor 
paid  for  the  property.  That  ordinarily  the  court  will  not  in  the 
interests  of  stocivholders  or  creditors  go  behind  the  contract  and 
inquire  whetlier  the  consideration  represents  the  full  value  against 
which  the  shares  are  issued  unless  the  contract  itself  is  impeached 
or  tlic  consideration  on  the  face  thereof  appears  to  be  insufficient 
or  elusory.^ 

Turning  now  to  the  statutory  enactments  in  this  country  of  the 
same  character,  they  may  be  explained  as  follows  :  In  Florida 
the  incorporation  act  there  in  force  j)rovides  that  incori)orators 
may  provide  in  the  charter  that  the  caj)ital  stock,  cither  in  whole 
or  in  part,  shall  be  payable  in  property,  labor,  or  services,  at  a 
valuation  fixed  in  the  charter.  The  latter  must  also  contain 
a  general  description  of  the  property  to  be  taken  in  exchange  for 
stock.  In  Utah  the  statute  is  very  similar  to  tlie  one  in  force  in 
Florida.  In  Massachusetts  the  articles  of  organization  must  set 
forth  the  amount  of  capital  stock  to  be  issued,  the  amount  thereof 
to  be  paid  for  in  cash,  and  the  amount  thereof  to  be  paid  for  in 
property.  If  such  property  consists  of  real  estate,  its  location  and 
the  amount  of  stock  to  be  issued  therefor  must  be  stated.  If  any 
part  of  such  property  is  personal,  it  must  be  described  in  de- 
tail. The  whole  matter  is  tlien  submitted  to  and  passed  upon 
by  the  commissioners  of  corporations.  But  the  statute  makes  no 
provision  relative  to  what  the  legal  effect  thereof  shall  be  as  to 
creditors  where  the  issuance  of  stock  in  exchange  for  property  is 
approved  by  the  commissioners  of  corporations. 

Unquestionably  the  most  effective  statute  in  existence  is  to  be 
found  in  the  Michigan  act,^  whicli  in  prescribing  the  requisites  of 
articles  of  incorporation  reads  in  part  as  follows:  "The  amount 
of  capital  paid  in  at  the  time  of  executing  the  articles,  which 
shall  not  be  less  than  ten  per  cent  of  the  authorized  capital,  etc. 
Such  capital  stock  may  be  paid  in  either  cash  or  in  other  property, 
real  or  personal  ;  but  where  payment  is  made  otherwise  than  in 
cash  there  shall  be  included  in  the  articles  an  itemized  descrip- 
tion of  the  property  in  which  such  payment  is  made,  with  the 
valuation  for  which  such  item  is  taken,  which  valuation  shall  be 
conclusive  in  the  absence  of  actual  fraud." 

1  Tn  re   Wragg,  L.  R.   I    Chan.  796;  2  Session  Laws  of  1903,  §  232. 

Ooregum  Gold  Min.  Co.  v.  Ropes,  61  L.  J. 
Chan.  337. 

140 


CHAP.  IV.]      ISSUANCE   AND   PAYMENT   OF   CAPITAL   STOCK. 


109 


The  intent  of  the  legislature  would  clearly  appear  to  be  to 
establish  conclusively  that  the  property  received  and  accepted  by 
the  corporation  under  the  authority  of  the  State  in  exchange  for 
its  stock  constituted  a  fair  equivalent  of  the  amount  of  stock  so 
given.  It  would  seem  to  forbid  all  claim  of  fraud  thereafter  to  be 
made,  and  to  establish  the  valuation  as  conclusive  upon  both  stock- 
holders and  creditors.^ 

§  109.  Meaning  of  Non-Assessable  Stock.  —  In  entering  upon 
the  subject  of  non-assessable  stock  as  contrasted  with  full-paid 
stock  the  discussion  of  the  former  will  be  confined  to  ques- 
tions arising  between  the  corporation  and  its  stockholders,  while 
the  latter  will  be  discussed  from  the  standpoint  of  the  stock- 
holder in  his  relation  to  creditors.  It  is  unquestionably  within 
the  power  of  a  corporation  to  agree  with  stockholders  that  stock 
shall  be  issued  to  them  at  less  than  par,  and  that  when  so  issued 
shall  not  be  subject  to  any  further  assessments  on  the  part  of  the 
corporation.^ 

In  West  Virginia,  Nevada,  Wyoming,  and  other  States  this 
principle  has  found  recognition  in  the  incorporation  acts  in  force 
in  those  Commonwealths.  The  West  Virginia  act  will  serve  as 
a  fair  example.  The  law  there  provides  in  substance  as  follows  : 
that  upon  the  vote  of  three-fourths  of  the  stockholders  corporate 
stock  may  be  sold  or  disposed  of  at  less  than  par.  The  act  then 
goes  on  to  provide  that  nothing  therein  contained  shall  be  con- 
strued as  to  prevent  any  mining  or  manufacturing  company  from 
issuing  stock  and  negotiating  the  sale  of  the  same  in  payment  of 
real  and  personal  estate  for  the  use  of  the  corporation  at  such  price 
and  upon  such  terms  and  conditions  as  may  be  agreed  upon  by  the 
owners  and  directors  or  stockholders  of  the  corporation,  and  any 
subscriber  to  the  capital  stock  of  any  such  corporation  may  pay 
for  the  same  by  the  transfer  and  conveyance  to  such  corporation 
of  real  or  personal  property  uj)on  such  terms  as  may  1)C  nnitually 
agreed  upon.  All  stock  so  issued  shall  1)C  full  paid  and  nut  liable 
to  any  further  call  or  assessment. 

Such  a  statute  as  is  here  referred  to  un(iucstionably  has  the  effect 
of  makiug  the  stock  non-assessable  as  between  the  cori)oration 
and  the  subscribers  to  its  capital  stock,  but  it  clearly  has  not  the 
effect  of  preventing  subsequent  creditors  in  case  of  insolvency 

1  See  8tate  v.  Webb  et  al.,  110  Ala.  »  Eegen  v.  Smitb,  113  k.  25  ;  84  N.  W. 
2U;  20  So.  462.  954. 

141 


§  110    INCOKPOUATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

compelling  the  payment  of  any  nnpaid  balance  on  such  stock. ^ 
On  this  subjoot  Jiulgc  Sbowalter,  in  Northern  Trust  Co.  v.  Colum- 
bia Straw  I'aper  Co. ,2  spoke  as  follows: 

''Whatever  may  have  been  in  fact  the  value  of  the  property 
turned  over  to  the  company  for  its  stock,  the  latter  agreed  to  take 
it  for  the  stock.  The  persons  interested  were  the  stockholders,  and 
there  was  no  dissent  on  the  part  of  any  person  in  what  was  done. 
Neither  any  person  then  holding  stock,  nor  any  person  who  afterwards 
became  a  stockholder  by  assignment  from  one  who  then  held  the  stock, 
can  now  make  complaint  on  behalf  of  the  corporation  against  the  law- 
fulness of  that  transaction.  This  I  take  to  be  the  settled  law  on  that 
subject." 

In  the  absence  of  statutory  authority  conferred  upon  the  corpo- 
ration or  in  the  absence  of  unanimous  consent  of  all  the  stock- 
holders, it  is  clear  that  the  directors  of  a  corporation  have  no 
power  to  assess  shares  which  have  been  fully  paid  up.^ 

§  ]  10.  Meaning  of  Full-Paid  Stock.  — The  term  "  full-paid  stock  " 
as  here  used  may  be  defined  to  be  stock  whose  par  value  has  been 
paid  cither  in  cash  or  in  property,  the  ownership  of  which  does 
not  subject  the  holder  thereof  to  any  further  liability  either  to 
the  corporation  or  to  the  creditors.  The  mere  declaration  that 
stock  is  full  paid,  either  by  resolution  or  by  stamping  upon 
the  stock  this  statement,  does  not  make  it  so,  at  least  as  to 
creditors.* 

It  has  already  been  said  that  stock  may  be  issued  for  less  than 
its  par  value  to  subscribers  as  full  paid  and  non-assessable  and  be 
binding  as  between  the  corporation  and  the  stockholders.^  Where 
statutes  exist  declaring  that  stock  issued  in  a  particular  manner 
shall  be  full  paid  and  non-assessable,  they  are  merely  to  be  con- 
strued to  the  effect  that  stock  may  be  issued  in  this  manner,  and 
that  the  holders  thereof  shall  not  be  held  liable  to  further  calls  or 
assessments  on  the  part  of  the  corporation,  but  such  immunity 

1  The  Wyoininf^  statute  would  appear  Pacific  Fruit  Co.  v.  Coon,  107  Cal.  447; 

to  be  materially  different  from  the  West  40  Pac.  542. 

Virginia  and  Nevada  acts.  *  Upton  v.  Triblecock,  91  U.  S.  345  ;  23 

'^  75  Fed.  936.  L.  E.  203;  F.   N.  Bank  v.  Company,  42 

8  Wells  V.  Company,  90  Wis.  442  ;  64  Minn.  327 ;  44  N.  W.  198;  National  Tube 

N.  "W.  69;  Ventura,  etc.  Ry.  Co.  u.  Hart-  Works   v.   Gilfillan,    124   N.    Y.   302;  26 

man,  116  Cal.  260  ;  48  Pac.  65  ;  Handley  N.  E.  538  ;  Kroeuert  v.  John.ston,  19  Wash. 

V.  Stutz,  39  U.  S.  417  ;  11  S.  Ct.  530  ;  Gary  96  ;  25  Pac.  605. 

V.  Company,  9  Utah,  464;   35  Pac.  494*;  ^  See  Scoville  v.  Thayer,  105  U.  S.  143. 

U2 


CHAP.  IV.]      ISSUANCE   AND    PAYMENT   OF   CAPITAL   STOCK.  §  110 

will  not  be  extended  in  such  suit  so  as  to  prevent  subsequent 
creditors  enforcing  their  claims  for  the  payment  of  the  unpaid 
residue.^  Many  of  the  States  have  statutory  provisions  to  the 
effect  that  no  corporation  shall  issue  stock  except  for  money  paid, 
labor  done,  or  property  actually  received,  declaring  all  fictitious 
increase  of  stock  to  be  void.  Under  such  provisions  an  original 
issue  of  stock  as  fully  paid  at  less  than  par  will  be  held  to  be 
void. 2 

Many  cases  will  be  found  bearing  upon  the  question  as  to  the 
validity  of  so-called  "  bonus  "  or  "  promotion  stock."  In  regard  to 
the  validity  of  such  stock  the  courts  differ.  One  line  of  decisions 
is  represented  by  the  courts  of  New  York  and  Massachusetts.  In 
Christcnsen  v.  Eno^  the  New  York  Court  of  Appeals  spoke  as 
follows : 

"  It  may  be  admitted  that  the  liability  of  subscribers  on  unpaid 
stock  subscriptions  constitutes  an  asset  of  the  corporation  wliich  can- 
not be  given  up  by  the  corporation  without  consideration  on  the  part 
of  creditors.  The  unissued  shares  of  a  corporation  are  not  assets. 
When  issued,  they  represent  the  proportionate  interest  of  the  share- 
holders in  the  corporate  property,  —  an  interest,  however,  subordinate 
to  the  claims  of  creditors.  There  are  unquestionably  public  evils 
growing  out  of  the  creation  and  multiplication  of  shares  of  stock  in 
corporations  not  based  upon  corporate  property.  The  remedy  is  with 
the  legislature.  But  the  liability  of  a  shareholder  to  pay  for  the 
stock  does  not  arise  out  of  his  relation,  but  depends  upon  his  con- 
tract, express  or  implied,  or  upon  some  statute,  and  in  the  absence  of 
either  of  these  grounds  of  liability,  we  do  not  perceive  how  a  person 
to  whom  shares  have  been  issued  as  a  gratuity  has  by  accepting  them 
committed  any  wrong  upon  the  creditors  or  made  himself  liable  to 
pay  the  nominal  face  of  the  shares  as  upon  his  subscription  or 
contract."  * 

On  the  other  hand,  courts  of  almost  equal  authority  have  refused 
to  treat  such  stock  in  the  interest  of  creditors  as  full  paid  and  non- 
assessaljle,  and  have  enforced  in  their  favor  an  alleged  stockholders' 

1  Vt.  Marhle  Co.  o.  Company,  135  Cal.  Ciil,  024  ;  37  Pac.  638 ;  Kcllerman  v. 
579  ;  67  Pac.  1057.  Maier,  116  Cal.  46  ;  48  Pac.  377  ;  Garrett 

2  Williams  v.  Kvans,  87  Ala.  725;  6  v.  Company,  113  Mo.  330;  20  S.  W. 
So.  702;  Perry  v.  Mill  Co.,  93   Ala.  364;  965. 

9  So.  217  ;  P.oitman   v.  Stciner,  98  Ala.  ^  jog  N.  Y.  97  ;  12  N.  E.  648. 

241  ;  13  So.  87  ;  Stein  r.  Howard,  65  Cal.  *  Same    rule  in   N.    11.    II.  N.  Co.   v. 

616;  4  Pac.  662;  Jefferson  v.  Hewitt,  103     Company,  142  Muhh.  349;  7  N.  E.  773. 

143 


§110    INCOKPORATION   AND   ORGANIZATION   OF  CORPORATIONS.    [PARTI. 

lial)ilitv  thereon.^  It  has  been  heUl,  liowcvcr,  that  even  tliough  a 
stockhokler  has  paid  nothing  for  his  stock,  he  is  entitled  to  voto 
the  same."-^ 

1  See  Peniusula  Savings  Bank  v.  Com-  N.  W.  894  ;  Scoville  v.  Thayer,  105  U.  S. 

pany,    105    Mich.    535;    63   N.    W.   514;  143;  Garrett  v.  Company,  113  Mo.  330; 

llamllcy  !•.   Stut?;,    139  U.   S.   417;  11    S.  20  S.  W.  965. 

Ct.   530 ;    De   La   Vergne   Refrigerating  ^  Cartwright  v.   Dickinson,   88  Tenn. 

Maciiine  Co.  r.  German  Savings  Institu-  476;  12   S.    W.    1030;  W.   E.  L.   Co.   v. 

tion,  175  U.  S.  40;  20  S.  Ct.  20;  44  L.  E.  Landy,  66  Vt.  248;  29  Atl.  248;  see  also 

65 ;  Kogers  i'.  Gross,   67  Minn.   224 ;   69  Busey  v.  Hooper,  35  Md.  15. 


144 


CHAP,  v.]  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  112 


CHAPTER   V. 
LEGISLATIVE   CONTROL   OVER   DOMESTIC   CORPORATIONS. 

§  111.  Statement  of  Principal  Methods  by  which  Legislative 
Control  over  Domestic  Corporations  is  obtained.  —  Under  our 
modern  system  legislative  control  over  domestic  corporations 
ordinarily  takes  the  following  forms,  to  wit :  (1)  control  over 
amendment  of  corporate  charters ;  (2)  reservation  on  the  part 
of  the  State  of  the  right  to  repeal  all  charters ;  (3)  control 
over  dissolution  of  corporations ;  (4)  by  the  exercise  through 
State  officials  of  the  right  to  foifeit  charters  by  means  of  quo 
tvarranto  proceedings ;  (5)  by  means  of  the  exercise  of  the 
police  power ;  (6)  through  legislative  investigation  into  corpo- 
rate  affairs ;   (7)  by  requiring  annual   reports  of   corporations ; 

(8)  by  compelling  corporations  to  permit  inspection  of  their 
books  and  records  for  the  benefit  of  stockholders  and  creditors  ; 

(9)  by  means  of  anti-trust  legislation ;  (10)  by  the  enactment  of 
statutes  regulating  the  internal  affairs  of  the  corporation  ;  (11)  by 
the  imposition  of  liability  upon  stockholders  for  corporate  debts 
over  and  beyond  their  liability  for  unpaid  stock  subscriptions; 
(12)  enactment  of  statutes  imposing  liability  upon  directors  for 
misfeasance  or  non-feasance  in  office ;  (13)  by  means  of  legisla- 
tive control  over  the  extension  of  corporate  existence;  (14)  by 
the  exercise  of  the  right  of  taxation  upon  corporations  ;  (15)  by 
regulating  the  right  of  consolidation  of  corporations. 

§112.  Amendment  of  Charters.  —  A  gUuiCC  at  the  general 
business  acts  in  force  in  the  several  States  and  Territories  will 
serve  to  show  that  in  all  of  them  more  or  less  attention  has  been 
paid  by  the  legislatures  to  the  question  of  the  riglit  to  amend  — 
with  more  or  less  freedom  —  articles  of  incorporalion.  In  ;i  ma- 
jority of  these  the  power  of  amendment  will  be  found  to  be  |)rac- 
tically  unlimited.  In  nine  the  limitations  imposed  arc  not  wide  in 
scope,  while  in  eleven  the  power  referred  to  may  be  characterized 
10  145 


§  11:2    INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PARTI. 

as  being  very  narri)\v  in  its  practical  operation.^  The  practical 
questions  to  be  considered  in  this  immediate  connection  have 
reference,  iii-st,  to  ascertaining-  in  what  body  the  legislatures  have 
seen  fit  to  place  the  power  of  amendment,  and,  secondly,  an  inquiry 
whether  the  power  when  granted,  apparently  in  the  broadest 
terms,  is  in  legal  effect  without  any  limitations  whatsoever. 

As  a  general  rule,  the  directors  have  no  power  to  amend  charters 
unless  such  right  is  exj)ressly  conferred  upon  them  by  statute. 
Power  to  amend  resides  exclusively  in  the  stockholders.^  Turn- 
ing now  to  the  second  inquiry  referred  to  above,  the  following  may 
be  said.  With  respect  to  the  right  on  the  part  of  majority  stock- 
holders to  exercise  the  power  of  amendment,  there  are  two  prac- 
tical views  of  the  question  which  deserve  consideration.  The  first 
has  reference  to  the  effect,  if  any,  the  exercise  of  such  right  may 
have  upon  the  right  of  the  corporation  to  enforce  stock  subscrip- 
tions which  were  made  in  reliance  ui)on  the  corporate  purposes 
set  forth  in  the  original  charter.  The  other  relates  to  the 
binding  effect  of  such  amendments,  when  had,  upon  dissenting 
minority  stockholders  who  have  previously  paid  up  their  stock 
subscriptions. 

In  the  first  case  it  appears  to  be  the  generally  accepted  view 
that  when  a  party  makes  a  subscription  to  the  capital  stock  of  a 
corporation  he  does  it  in  reliance  upon  the  implied  understanding 
that  no  changes  shall  be  made  in  the  charter  without  his  consent 
which  produce  material  and  fundamental  changes  therein.^  The 
rule  however  can  clearly  not  apply  where  the  changes  made  were 
trifling  or  immaterial  or  were  in  furtherance  of  the  original  objects 
of  the  corporation.*  There  is  a  well-defined  tendency  at  the 
present  time  on  the  part  of  many  courts  to  take  the  view  that  in 
order  that  a  subscriber  to  the  capital  stock  may  escape  liability 
on  his  subscription  on  the  ground  that  there  has  been  a  material 
amendment  to  the  charter  since  his  subscription  was  made,  that 

1  See  Part  II.,  Synopsis-Digest  of  tlie  133;  Abbott  v.  Company,  33  Barb.  (N.  Y.) 
Corporation  Acts  of  the  Several   States,     583. 

under  the  head  "  Amendments."  ^  Mowrey  v.  Company,  4  Bissell  (U.  S.), 

2  Gill  V.  Bayless,  72  Mo.  424;  Ry.  Co.  78;  Printing  House  v.  Trustees,  104  U.  S. 
V.  Allerton,  Is'Wall.  U.  S.  233;  Olfeshei-     711. 

mer  v.  Mfg.  Co.,  44  Mo.  Ap.  172;  Clough  *  Fry's  Executors  v.  Company,  2  Met- 

r.  Company,  2.5  Col.  .520;  55  Pac.  809;  calf  (Ky.),  322 ;  Peoria  v.  Preston,  35  la. 
State  V.  Oftedal,  72  Minn.  488;  75  N.  W.  115  Milfurd,  etc.  Turnpike  Co.  v.  Brush, 
692;  Commonwealth  i;.  Cullen,  13  Pa.  St.     10   O.    St.    Ill;   Durfee   v.  Company,   5 

Allen  (Mass.),  230. 
146 


CHAP,  v.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  112 

such  amendment  must  necessarily  have  brought  about  changes 
of  the  most  radical  and  fundamental  character.^ 

Turning  now  to  the  second  question  here  referred  to,  the  fol- 
lowing may  be  said.  Important  questions  frequently  arise  as  to 
the  right  of  majority  stockholders  to  amend  the  charter  of  the 
corporation  against  the  dissent  of  minority  stockholders  so  as 
practically  to  create  an  entirely  new  corporation  with  purposes 
and  powers  wholly  different  from  those  conferred  in  the  original 
charter. 

Before  the  passage  of  the  modern  liberal  amendment  acts, 
specifically  authorizing  majority  stockholders  to  change  ad  libitum 
corporate  purposes  and  powers,  the  rule  undoubtedly  was  that 
majority  stockholders  had  no  power  to  depart,  under  the  guise  of 
an  amendment  to  the  charter,  from  the  objects  for  the  accom- 
plishment of  which  the  corporation  was  created.  At  that  time 
majority  stockholders  would  be  enjoined  on  the  application  of 
minority  stockholders  from  making  fundamental  and  radical 
changes  in  the  original  corporate  purposes,  which  had  the  effect 
of  jiractically  creating  a  new  corporation,  with  power  to  engage 
in  lines  of  business  wholly  foreign  to  that  set  forth  in  the  original 
charter.2  But  whatever  the  rule  may  have  been  in  times  past, 
changed  conditions  have  brought  about  material  modifications 
therein. 

Owing  to  the  recent  statutory  enactments  in  the  great  majority 
of  tlie  Commonwealths  relative  to  amendment  of  charters,  it  may 
be  said  that  tliis  question  has  ceased  to  be  one  of  great  practical 
importance  at  the  present  time,  however  it  may  have  been  in  the 
past.  In  view  of  these  statutory  i)rovisions  it  may  be  said  that  as 
a  general  rule  the  extent  of  the  j^ower  of  amendment  when  exercised 
by  a  majority  of  the  stockholders  according  to  the  statute  in  such 
case  made  and  provided,  depends  entirely  upon  the  terms  of  such 
statute  and  the  construction  given  by  the  courts  thereto.^    If  broad 

1  Banet  v.  Company,  13  111.  504;  Pa-  Natusch  v.  Irving,  1  Smith's  Cases.  226 ; 
cific  Uy.  Co.  V.  Rfiisiiaw,  18  Mo.  210;  I'liiuii  Locks  and  Canals  i-.Townc,  1  N.  H. 
Spr.agiie  c.  Company,  19  111.  174;  Irvine  44;  Asliton  r.  lUirbank,  2  Dill.  435;  Fed. 
f.  Turnpike  Co.,  2  Pen.  &,  W.  (i'a.)  466;  Cases  No.  582;  H.  &  N.  H.  Uy.  Co.  v. 
CroH.s  V.  Company,  90  Pa.  St.  392;  Troy,  Croswell,  5  Hill  (N.  Y.),  383. 

etc    liy.    Co.    t>. 'Kerr,    17  Barb.  (N.  Y.)  »  Day    v.   Company,   75   la.   694;    38 

607;  Worcester    i-.  Company,  109    Ma.s8.  N.  W.   113;   GoMnr  v.   Bressler,   105  111. 

103;  Del.    Ry.    Co.    v.   Tliarp,    1    Iloust.  419;  Spricp  i-.  Company,  46  Md.  67  ;  Hope 

(Del.)  149.  Mutual     Fire    Ins.    Co.    t-.    Bwkm.an,    47 

2  Zahriskie  )•.  Company,  18  N.  J.  Eq.  Mo  93;  Detroit  Chamber  of  Commerce  »>. 
178;    Stevens  i-.  Company,  29  Vt.   545;  Secretary   of   State,   109   Mich.   691;    67 

147 


§  11-    INCOIirOUATIOiV  AND  ORGANIZATION  OP  CORPOUATIONS.    [PART  I. 

in  scope,  they  unquestionably  })ermit  majority  stockholders  to 
bring  about  radical  and  even  fundamental  cliangcs  in  corporate 
purposes  and  powers  if  they  so  desire. 

The  question  here  presented  is  one  of  so  much  practical  im- 
portance that  it  deserves  more  attention  than  has  been  yet  given 
it.  The  New  York  Court  of  Appeals  in  Buffalo  &  New  York  City 
Railroad  Co.  v.  Dudley^  laid  the  foundation  for  tlie  establishment 
in  that  State  of  the  present  just  rule  that  there  obtains  with 
reference  to  the  right  of  majority  stockholders  to  materially 
change  the  corporate  purposes  against  the  dissent  of  minority 
stockholders.  In  that  case  the  court  permitted  a  change  of  name 
and  an  extension  of  the  line  of  the  railway  by  means  of  an  amend- 
ment to  the  original  charter.  In  passing  upon  this  point  the 
court  spoke  as  follows  : 

"  The  stock  subscription  having  been  valid  so  as  to  give  a  right 
of  action  in  case  of  non-payment  to  the  corporation,  did  the  altera- 
tion of  the  charter  and  the  extension  of  the  road  subsequently  absolve 
the  defendant  from  his  liability  upon  such  subscription  ?  The  right 
to  alter  was  reserved  in  tlie  charter,  and  the  subscription  must  be 
taken  to  have  been  made  subject  to  having  such  additional  powers 
conferred  as  the  legislature  might  deem  essential  and  expedient. 
The  change  is  not  fundamental.  The  new  powers  conferred  are 
identical  in  kind  with  those  originally  given.  They  are  enlarged 
merely,  the  general  objects  and  purposes  of  the  corporation  remain- 
ing still  the  same.  It  may  be  admitted  that  under  this  reserved 
power  to  alter  and  repeal  the  legislature  would  have  no  right  to 
change  the  fundamental  character  of  the  corporation  and  convert  it 
into  a  different  legal  being,  for  instance,  a  banking  corporation, 
without  absolving  those  who  did  not  clioose  to  be  bound.  But  this 
they  have  not  attempted  to  do.  The  additional  powers  are  of  the 
same  character  and  have  been  regularly  acquired  from  a  legitimate 
source  of  power,  and  if  they  had  been  fairly  exercised  the  defendant, 
although  the  change  may  have  operated  to  Ids  pecuniary  disadvan- 
tage, is  still  bound  by  his  undertaking.  The  whole  matter  is  mani- 
festly a  question  of  power ;  and  if  the  power  was  legitimately 
acquired  and  has  been  exercised  without  fraud,  the  rights  of  the 
parties  are  in  no  respect  changed  as  between  themselves  whether 
the  alteration  is  beneficial  or  injurious  to  the  defendant's  interest. 

N.  W.  897;  Mercantile  Statement  Co.  People  y.  Green,  116  Mich.  505;  74  N.  W. 
V.  Kneal,  51   Miun.  263;  53  N.  W.  632;     714. 

1  14  N.  Y.  342. 

148 


CHAP,  v.]  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.    §  112 

Whether  he  has  made  or  lost  by  the  change  in  no  respect  affects  the 
question  of  authority  in  the  plaintiff." 

Many  years  later  this  same  court,  in  discussing  the  respective 
rights  of  majority  and  minority  stockholders  or  corporations,  spoke 
as  follows : 

'•'  The  court  would  not  be  justified  in  interfering  even  in  doubtful 
cases,  where  the  action  of  the  majority  might  be  susceptible  of  dif- 
ferent constructions.  To  warrant  the  interposition  of  the  court  in 
favor  of  the  minority  shareholders  in  a  corporation  or  joint-stock 
association,  as  against  the  contemplated  action  of  the  majority,  where 
such  action  is  within  the  corporate  powers,  a  case  must  be  made  out 
which  plainly  shows  that  such  action  is  so  far  opposed  to  the  true 
interests  of  the  corporation  itself  as  to  lead  to  the  clear  inference 
that  no  one  thus  acting  could  have  been  influenced  by  any  honest 
desire  to  secure  such  interests,  but  that  he  must  have  acted  with  an 
intent  to  subserve  some  outside  purpose,  regardless  of  the  conse- 
quences to  the  Company  and  in  a  manner  inconsistent  with  its 
interests.  Otherwise  the  court  might  be  called  upon  to  balance  prob- 
abilities of  profitable  results  to  arise  from  the  carrying  out  of  the 
one  or  the  other  of  different  plans  proposed  by  or  on  behalf  of  the 
different  shareholders  in  a  corporation,  and  to  decree  the  adoption  of 
that  line  of  policy  which  seemed  to  it  to  promise  the  best  results,  or 
at  least  to  enjoin  the  carrying  out  of  the  opposite  policy.  This  is  no 
business  for  any  court  to  follow."  ^ 

It  is  difficult  to  find  a  better  presentation  of  the  more  modern 
and  better  view  taken  of  the  question  now  under  discussion  than 
that  to  be  found  in  the  opinion  of  the  Massachusetts  Supreme 
Court  in  Durfee  v.  Old  Colony  &  Fall  River  Railway  Company .^ 
While  the  case  had  special  reference  to  the  riglit  of  a  State  legis- 
lature to  exercise  its  reserved  right  to  amend  corporate  chartcr& 
80  as  to  produce  radical  changes  in  tlic  purj)osc8  named  in  the 
original  charter,  nevertheless  the  reasoning  is  equally  applicable 
to  those  cases  where  majority  stockholders  attempt  of|unlly  radical 
amendments  under  gen(;ral  acts  permitting  such  stockholders  to 
amend  charters  on  their  own  initiative. 

"  We  sup[)0sc,"  said  Chief  Justice  Bigelow  in  the  case  referred 
to,  "  it  may  be  stated  as  an  indisputable  proposition,  that  every 


»  Gamble  v.  Companv,  123  N.  Y.  91  ;         »  5  Allen,  230. 
2.')N.  E.  201. 


149 


§112   INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

person  who  becomes  a  member  of  a  corporation  aggregate  by  pur- 
chasing and  holding  shares  agrees  by  necessary  implication  that 
he  will  be  bound  by  all  acts  and  proceedings,  within  the  scope  of 
the  powers  and  authority  conferred  by  the  charter,  which  shall 
be  adopted  or  sanctioned  by  a  vote  of  the  majority  of  the  corpora- 
tion, duly  taken  and  ascertained  according  to  law.  This  is  an 
unavoidable  result  of  the  fundamental  principle  that  the  majority 
of  the  stockholders  can  regulate  and  control  the  lawful  exer- 
cise of  the  powers  conferred  on  a  corporation  by  its  charter.  A 
holder  of  shares  in  an  incorporated  body,  so  far  as  his  indi- 
vidual rights  and  interests  may  be  involved  in  the  doings  of  the 
corporation,  acting  within  the  legitimate  sphere  of  its  corporate 
power,  has  no  other  legal  control  over  them  than  that  which  he 
can  exercise  by  his  single  vote  in  the  meetings  of  the  company. 
To  this  extent  he  has  parted  with  his  personal  right  or  privilege 
to  regulate  the  disposition  of  that  portion  of  his  property  which 
he  has  invested  in  the  capital  stock  of  the  corporation,  and  sur- 
rendered it  to  the  will  of  a  majority  of  his  fellow  corporators. 
The  jus  disponendi  is  vested  in  them  so  long  as  they  keep  within 
the  hne  of  the  general  purpose  and  object  for  which  the  corpora- 
tion was  established,  although  their  action  may  be  against  the  will 
of  a  minority  however  large.  It  cannot,  therefore,  be  justly  said 
that  the  contract,  express  or  implied,  between  the  corporation 
and  the  stockholders  is  infringed  or  impaired  by  any  act  or  pro- 
ceeding of  the  former  which  is  authorized  by  a  majority,  and 
which  comes  within  the  terms  of  the  original  statute  creating  and 
establishing  their  franchise,  and  conferring  on  them  capacity  to 
exercise  control  over  the  rights  and  property  of  their  members. 
On  the  contrary,  the  fair  and  reasonable  implication  resulting 
from  the  legal  relation  of  the  stockholders  and  the  corporation  is, 
that  the  majority  may  do  any  act  either  coming  within  the  scope 
of  the  corporate  authority,  or  which  is  consistent  with  the  terms 
and  conditions  of  the  original  charter,  without  and  even  against 
the  consent  of  an  individual  member."  Again,  in  this  same  opinion 
the  court  observed  that,  "  in  creating  a  corporation,  no  contract 
is  made  by  the  legislature  with  the  individual  members  or  stock- 
holders, any  further  than  they  are  represented  by  the  artificial 
body  which  the  act  of  incorporation  calls  into  being.  They  have 
no  other  rights  except  those  which  exist  or  grow  out  of  the  con- 
stitution of  the  body  corporate  of  which  they  are  members.  To 
150 


CHAP,  v.]  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  112 

this  can  we  only  look,  in  order  to  ascertain  whether  there  has 
been  any  breach  of  contract  or  violation  of  chartered  rights.  It 
constitutes,  of  itself,  the  contract  by  which  the  rights  of  all  parties 
are  to  be  governed.  When,  therefore,  it  is  expressly  provided 
between  the  legislature  on  the  one  hand  and  the  corporation  on 
the  other,  as  part  of  the  original  contract  of  incorporation,  that 
the  former  may  change  or  modify  or  abrogate  it  or  any  portion 
of  it,  it  cannot  be  said  that  any  contract  is  broken  or  infringed 
when  the  power  thus  reserved  is  exercised  with  the  consent  of  the 
artificial  body  of  whose  original  creation  and  existence  such  reser- 
vation formed  an  essential  part.  The  stockholder  cannot  say 
that  he  became  a  member  of  the  corporation  on  the  faith  of  an 
agreement  made  by  the  legislature  with  the  corporation,  that  the 
original  act  of  incorporation  should  undergo  no  change  except 
with  his  assent.  Such  a  position  may  be  asserted  with  more 
plausiljility,  if  there  was  an  absence  of  a  clause  in  the  original 
act  of  incorporation  providing  for  an  alteration  in  its  terms.  In 
such  a  case  it  might  perhaps  be  maintained  that  there  was  a 
strong  implication  that  the  charter  should  remain  inviolate,  and 
that  the  holders  of  shares  invested  their  property  in  the  corpora- 
tion relying  upon  a  contract  entered  into  between  it  and  the 
legislature  that  the  provisions  of  the  act  creating  it  should  remain 
unchanged.  But  it  is  difficult  to  see  how  such  a  construction  can 
be  put  on  a  contract  which  contains  an  express  stipulation  that  it 
shall  be  subject  to  amendment  and  alteration.  If  it  be  asked  by 
whom  such  amendment  or  alteration  is  to  be  made,  the  answer 
is  obvious :  by  the  parties  to  the  contract,  the  legislature  on  the 
one  hand  and  the  corporation  on  the  other  ;  the  former  expressing 
its  intention  by  means  of  a  legislative  act,  and  the  latter  assenting 
thereto  bv  a  vote  of  the  majority  of  the  stockholders,  according 
to  the  provisions  of  its  charter.  It  is  nothing  more  than  the 
ordinary  case  of  a  stipulation  that  one  of  the  parties  to  a  contract 
may  vary  its  terms  with  the  assent  of  the  other  contracting  party. 
In  such  case,  all  persons  claiming  derivative  rights  or  interests 
under  the  original  contract,  with  notice  of  its  terms,  would  be 
bound  by  the  amendment  or  alteration  to  which  the  parties  should 
agree.  It  is  a  mistake,  therefore,  to  say  that  the  contract  of  a 
stockholder  with  a  corporation  established  under  our  statutes 
binds  the  latter  to  undertake  no  now  enterprise  and  engage  in  no 
business  or  operation  other  than  that  contemi»lated  by  the  original 

151 


vjll:2    INCORPORATION   AND  ORGANIZATION  OF  CORPORATIONS.    [PART  L 

charter.  This  interpretation  puts  aside  the  express  ])r()visic)n 
authorizing  an  amendment  or  alteration  of  the  act  of  incorporation, 
and  gives  it  no  effect  as  against  a  stockholder  without  his  assent, 
although  he  honght  his  stock  or  subscribed  for  his  shares  subject 
to  the  legal  effect  of  such  a  stipulation.  The  real  contract  into 
which  the  stockholder  enters  with  the  corporation  is,  that  he 
agrees  to  become  a  memljer  of  an  artificial  body  which  is  created 
and  has  its  existence  by  virtue  of  a  contract  with  the  legislature, 
which  may  be  amended  or  changed  with  the  consent  of  the  com- 
pany, ascertained  and  declared  in  the  mode  pointed  out  by  law. 
Having,  by  virtue  of  the  relation  which  subsists  between  himself 
and  the  corporation  as  a  holder  of  shares,  assented  to  the  terms 
of  the  original  act  of  incorporation,  he  cannot  be  heard  to  say 
that  he  will  not  be  bound  by  a  vote  of  the  majority  of  the  stock- 
holders accepting  an  amendment  or  alteration  of  the  charter 
made  in  pursuance  of  an  express  authority  reserved  to  the  legis- 
lature, and  which  by  such  acceptance  has  become  binding  on  the 
corporation." 

In  some  few  of  the  States,  as  for  example  Ohio,^  the  law  provides 
that  no  amendment  shall  change  substantially  the  original  pur- 
poses of  the  organization.  In  many  of  the  States  great  similarity 
is  to  be  observed  in  the  formalities  necessary  to  be  taken  in  order 
to  legally  amend  the  charter.  Usually  the  matter  is  brought  to 
the  attention  of  the  stockholders  by  a  resolution  passed  by  the 
board  of  directors  directing  the  calling  of  a  meeting  of  the  stock- 
holders for  the  purpose  of  passing  upon  certain  proposed  amend- 
ments. A  meeting  of  the  stockholders  is  then  called  in  the  manner 
prescribed  by  statute,  if  any,  or  according  to  the  method  set  forth 
in  the  by-laws.  If  the  requisite  number  of  stockholders  vote  in 
favor  of  such  amendment,  a  certificate  to  that  effect  is  usually 
made  by  the  officers  of  the  corporation  and  filed  in  the  same  offices 
as  is  required  in  the  case  of  the  original  articles  of  incorporation. 
Thereupon  the  amendment  ordinarily  becomes  effective.  If  the 
statute  does  not  prescribe  the  method  of  amending  the  charter, 
the  only  safe  plan  to  pursue  is  to  adopt  substantially  the  same 
procedure  therefor  as  is  prescribed  by  statute  in  the  case  of  original 
articles.2 

1  See   Kevised  Statutes  of  Ohio,  sec.         2  X)ay  v.   Company,   75   la.   694;    S8 
3258a  ;  also  State  v.  Taylor,  55  0.  St.  61 ;     N.  W.  113. 
Picard  v.  Hnghey,  58  O.'  St.  577. 
152 


CHAP.  Y.]  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  113 

§  113.  Reserved  Right  of  the  State  to  repeal  Charters.  —  TVithout 
exception,  under  the  system  of  incorporation  now  in  vogue,  each 
of  the  several  States  and  Territories  reserves  the  right  in  the  grant- 
ing of  corporate  charters  under  general  acts  to  alter,  amend,  or 
repeal  the  same  at  any  future  time.  The  presence  of  such  enact- 
ments is  due  to  the  decision  of  the  United  States  Supreme  Court 
in  Dartmouth  College  v.  Woodward,^  wherein  that  tribunal  an- 
nounced the  principle  that  the  charter  of  a  private  corporation 
was  entitled  to  protection  from  alteration,  amendment,  or  repeal 
on  the  part  of  State  legislatures  under  the  clause  of  the  Federal 
Constitution  forbidding  impairment  of  the  obligation  of  contracts. 
"When  this  case  was  decided,  it  became  obvious  at  once  that  "  many 
acts  of  incorporation  which  had  been  passed  as  laws  of  a  public 
character,  partaking  in  no  general  sense  of  a  bargain  between  the 
States  and  the  corporations  which  they  created,  but  which  yet  con- 
ferred private  rights,  were  no  longer  subject  to  alteration,  amend- 
ment, or  repeal  except  by  the  consent  of  tlie  cor|)orate  body,  and 
tliat  the  general  control  which  the  legislatures  creating  such 
bodies  had  previously  supposed  they  had  the  right  to  exercise,  no 
longer  existed."  It  was  no  doubt  with  a  view  to  suggesting  a 
method  by  which  the  State  legislatures  could  retain  in  a  large 
measure  this  important  power  without  violating  the  provisions  of 
the  Federal  Constitution,  that  Justice  Story,  in  his  concurring 
opinion  in  the  Dartmouth  College  Case,  suggested  that,  "  when  the 
legislature  was  enacting  a  charter  for  a  corporation,  a  provision 
in  the  statute  reserving  to  the  legislature  the  right  to  amend  or 
repeal  it  must  be  held  to  be  a  part  of  the  contract  itself,  and  the 
subsequent  exercise  of  the  right  would  be  in  accordance  with  the 
contract  and  could  not  therefore  impair  its  obligation."  ^ 

With  respect  to  the  right  to  repeal,  the  power  of  the  legislature 
in  this  regard,  when  exercised,  is  all  but  absolute,  and  the  courts 
ordinarily  will  not  iiuiuirc  into  the  legislative  motive  for  exercis- 
ing it.  Under  such  circumstances  it  will  be  ))rcsumed  that  the 
power  is  i)roperly  exercised.-'^  'i'lie  only  exception  appears  to  be 
that  the  courts  will  interfere  wliere  the  legislature  lias  exercised 
its  power  of  rejjcal  so  wantonly  and  causelessly  as  palpably  to 
violate  the  principles  of  natural  justice.'* 

1  4  Wheaton,  518,  decided  in  1819.  W.ijrnfr  Froo  Iiistitiitioii  v.  Philadelphia, 

2  Greenwood   t;.  Company,   105    U.   S.     132  I 'a.  St.  ('.11'. 

(•"i-  ■•  Lothrop  cl  al.  v.  StciJinan  ef  til.,  Fed. 

8  Greenwood  v.  Company,  105  U.  S.  13;     Case.-*,  No   8319. 

153 


§114    INCORPORATION   AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

Another  question,  however,  is  presented  when  the  legislature 
attempts  to  alter  or  amend  the  charter.  In  order  to  justify  the 
exercise  of  this  power  by  the  legislature  the  same  must  be  so 
exercised  as  not  to  defeat  or  substantially  impair  the  ol)ject  of 
the  grant  or  any  rights  vested  under  it  which  tiie  legislature  may 
deem  necessary  to  secure  either  that  object  or  some  public  right.^ 
From  the  foregoing  it  is  to  be  seen  that  the  reserved  power  to 
repeal  and  alter  is  not  unlimited.  On  this  subject  the  U.  S. 
Supreme  Court,  in  Union  Pacific  Railroad  Co.  v.  United  States,^ 
spoke  as  follows : 

"  That  the  power  to  alter  or  amend  a  charter  even  when  reserved  has 
a  limit  no  one  can  doubt.  All  agree  that  it  cannot  be  used  to  take 
away  the  property  already  acquired  under  the  operation  of  the 
charter  or  to  deprive  the  corporation  of  the  fruits  actually  reduced 
to  possession  of  contracts  lawfully  made.  It  may  safely  be  affirmed 
that  the  reserve  power  may  be  exercised  to  almost  any  extent  to  carry 
into  eifect  the  original  purposes  of  the  grant  or  to  secure  the  due 
administration  of  its  affairs  so  as  to  protect  the  rights  of  stockholders 
and  creditors,  and  for  the  proper  distribution  of  its  assets.  Also 
to  protect  the  rights  of  the  public  and  of  the  incorporators  or  to 
promote  the  due  administration  of  the  affairs  of  the  corporation. 
The  alterations  must,  however,  be  reasonable.  They  must  be  made  in 
good  faith,  and  be  consistent  with  the  object  and  scope  of  the  act  of 
incorporation.  Sheer  oppression  and  wrong  cannot  be  inflicted  under 
the  guise  of  alteration  or  amendment." 

§  114.  Legislative  Control  over  Dissolution  of  Corporations.  — 
Legislative  control  over  dissolution  of  domestic  corporations 
(omitting  any  reference  to  forfeiture  of  charters  by  State  action,) 
is  exercised  in  the  following  four  ways :  (1)  by  prescribing  the 
maximum  duration  of  corporate  charters;  (2)  by  permitting 
corporations  to  surrender  their  charters  before  organization  ; 
(3)  by  authorizing  voluntary  dissolution,  with  or  without  recourse 
to  the  courts ;  (4)  by  enacting  statutes  authorizing  involuntary 
dissolution  on  application  of  stockholders  or  creditors.  Each  of 
these  matters  will  now  be  taken  up  briefly  for  discussion. 

(1)  Legislative  limitations  upon  corporate  duration.  In  the 
absence  of  any  provision  in  the  governing  statute  or  in  the  charter 
limiting  corporate  duration,  the  corporation  is  entitled  to  perpetual 

1  N.  Y.  &  N.  E.  Railway  Co.  v.  Town         2  99  u.  g.  700. 
of  Bristol,  151  U.  S.  556. 
154 


CHAP,  v.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  ll-i 

existence.^  The  legislature  may  however,  if  it  sees  fit,  limit 
tlie  duration  of  corporate  existence  to  any  specific  number  of 
years.  This  right  has  been  exercised  in  a  majority  of  the 
States.^  Uj^on  expiration  of  the  period  of  time  limited  in  the 
charter  as  the  duration  of  corporate  life,  dissolution  results  by 
operation  of  law.^  If  the  articles  provide  for  a  longer  period 
of  duration  than  the  law  allows,  then  the  excess  is  of  no  force 
or  effect.* 

In  many  of  the  States  statutes  exist  continuing  the  existence  of 
corporations  after  the  expiration  of  the  period  limited  in  their 
charters  for  certain  periods  of  years  in  order  to  permit  them  to 
close  up  their  corporate  affairs.  Such  statutes  may  be  lawfully 
enacted  subsequent  to  the  creation  of  the  corporation,  for  the 
reason  that  they  provide  for  the  enforcement  of  rights  which 
equity  recognizes  even  in  the  absence  of  statute.^ 

(2)  Surrender  of  charter  before  organization.  Statutes  exist 
in  the  States  of  Connecticut,  Delaware,  Maine,  Massachusetts, 
Nevada,  New  Jersey,  New  York,  North  Carolina,  Virginia,  West 
Virginia,  and  Wisconsin  expressly  permitting  corporations  to 
surrender  their  charters  either  prior  to  organization  or  to  the 
commencement  of  corporate  business.  It  is  unquestionably  true 
that  in  order  to  render  such  a  surrender  valid  it  must  have  been 
made  under  authority  of  the  statutory  provision  enacted,  which 
is  of  course  equivalent  to  acceptance  by  the  State.^ 

(3)  Voluntary  dissolution  with  or  without  recourse  to  the 
courts.  "  Charters,"  it  has  been  said,  "  are  in  many  respects  com- 
pacts between  the  government  and  the  corporators.  And  as  the 
former  cannot  deprive  the  latter  of  their  franchises  in  violation  of 
the  compact,  so  the  latter  cannot  put  an  end  to  the  compact  with- 
out the  consent  of  tlie  former.  It  is  equally  obligatory  on  both 
parties.  The  surrender  of  a  charter  can  only  be  made  by  some 
formal  act  of  the  corporation,  and  will  be  of  no  avail  until  ac- 
cepted by  the  government.  There  must  be  the  same  agreement 
of  the  parties  to  dissolve  that  there  was  to  form  the  comj)act.     It 

1  F.  L.  &  S.  Co,  u.  riowcH,  3  N.  y.  470.     v.    IIutcliiiiHon,    183    111.    &0:>;    56    N.    E. 

2  See  Part  III.  Tiihle  13.  p^ge  583.  388. 

8  Mason    v.    Coinpimv,    25    Fed.    882;  6  Taylor  r.  Holmes,  14  Fed.  98 ;  Revere 

Bradley  v.  Kcpnell,  l.').')  Slo.  54.') ;  32  S.  W.  v.  Company,  15  Pick,  (Mass.)  351;  Combes, 

645.  r.    KeycH,   89   Win.    297;    02  N.    W.    89; 

*  People  V.  Cheeseman,  7   Col.  376  ;  3  Law  >:  Hirh.  47  W.  Va.  634  ;  35  S.  E.  858  ; 

p^c.  716.  Mariners  r.  Sewnll,  50  Me.  2l>0  ;  Barton  i;. 

6  Foster  v.  Bank,  16  Mass.  245  ;  Singer  Association,   114  Ind.  226;  16  N.  E.  486. 

155 


§11  I  iNcouror>.vTiox  and  orgaxization  of  coRroRATioNs.  [part  I. 

is  the  acceptance  which  gives  enicicncy  to  the  surrender.  Dis- 
sohition  of  a  corporation  extinguishes  all  its  debts.  The  power 
of  dissolving  itself  by  its  own  act  would  be  a  dangerous  power, 
and  one  which  cannot  be  supposed  to  exist."  ^ 

The  foregoing  statement  of  the  law  is  unquestionably  based 
upon  both  reason  and  authority.  Accordingly,  a  corporation  may 
dispose  of  all  its  assets,  cease  entirely  to  do  business,  and  neglect 
to  elect  officers  or  hold  meetings  of  any  kind,  yet  it  cannot  be 
legally  dissolved  by  any  action  of  its  stockholders  or  a  surrender 
of  its  charter  unless  such  surrender  is  authorized  by  some 
statute.^ 

Where  statutes  exist  authorizing  dissolution  of  corporations 
prior  to  the  termination  of  the  period  limited  in  their  charters, 
such  statutes  are  of  course  equivalent  to  an  accei)tance  by  the 
legislature  of  the  surrender  of  the  charter.  All  that  is  necessary 
is  that  the  statute  shall  be  substantially  complied  with  in  order 
that  the  dissolution  may  be  effective.^ 

It  may  be  remarked,  in  passing,  that  no  cessation  or  abandon- 
ment of  its  corporate  business,  failure  to  hold  corporate  meetings 
or  to  elect  officers,  alienation  or  loss  of  all  its  property,  has  the 
effect  iii  law  of  dissolving  the  corporation.^ 

(4)  Involuntary  dissolution  on  application  of  stockholders  and 
creditors.  ]\Iost  of  the  States  have  enacted  statutes  giving  courts 
possessing  equitable  powers  the  right  to  wind  up  corporations  for 
cause  shown  ui)on  application  of  some  stockholder  or  on  petition 
of  creditors.  But  such  proceedings,  even  when  the  corporation  is 
insolvent,  do  not  necessarily  dissolve  the  corporation,  unless  the 
statute  that  is  invoked  expressly  so  provides.^ 

It  has  been  expressly  held  that  corporations  are  not  dissolved  by 

1  Boston  Glass  Manufactory  v.  Lang-  222 ;  Boston  Glass  Manufactory  v.  Lang- 
don,  24  Pick.  49;  see  also  Olds  v.  Company  don,  24  Pick.  (Mass.)  49  ;  Kincaid  v.  Dwi- 
(Mass.),  70  N.  E.  1022.  nelle,  59  N.  Y.   548;  Jones  v.  Edson,  10 

2  Everetts  v.  Company,  20  Conn.  448  ;  Kan.  Ap.  110;  62  Pac.  249  ;  State  v.  Trus- 
Rorke  v.  Thomas,  56  N.  Y.  559  ;  People  i'.  tees,  5  Ind.  44  ;  Wilmington  &  Reading 
Ballard,  134  N.  Y.  269;  32  N.  E.  54;  Ky.  Co.  i;.  Downward  (Del.),  14  Atl.  720; 
Commonwealth?;.  Silfer,  53  Pa.  St.  71;  Muscatine  Turnverein  v.  Funck,  18  la. 
Wilson  V.  Proprietors,  etc.,  9  R.  I.  590;  469;  U.  S.  v.  Company,  1  Fed.  700;  Brad. 
State  V.  Association,  35  O.  St.  258.  ley  v.  McKee,   5  Cranch  C.  C.  298;  Fed. 

3  Commonwealth  v.  Slifer,  53  Pa.  St.  Ca.ses,  No.  1784. 

71  ;  Tn  re  Lincoln  Co.,  190  Pa.  St.  124  ;  42  ^  Spragne    Brimmer  Mfg.  Co.  v.  Com- 

Atl.  538;   Wilson    v.  Proprietors,  etc,   9  pany,  26  Fed.  572 ;  Stolzey.  Company,  100 

R.  I.  590.  Wi.s.  208 ;  75  N.  W.  987  ;  Olds  i'.  Com- 

*  People  V.  B.  &  R.  T.  Road,  23  Wend,  pany  (Mass.),  70  N.  E.  1022. 

156 


CHAP,  v.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  115 

statutory  proceedings  in  bankruptcy  or  insolvency,  or  by  appoint- 
ment of  receivers  in  equity  or  by  assignment  for  the  benefit  of 
creditors.^ 

§  115.  Forfeiture  of  Charters.  —  At  commou  law  forfeiture  of 
charters  was  accomplished  by  means  of  icire  facias^  or  by  an 
information  by  the  proper  State  officials  in  the  nature  of  a  writ 
of  quo  warranto?  "  An  information  for  the  purpose  of  dissolving 
a  corporation  or  of  seizing  its  franchises,"  it  has  been  said,  "  can- 
not be  brought  except  by  the  authority  of  the  Commonwealth, 
exercised  by  the  legislature  or  by  the  attorney  or  solicitor-general 
acting  under  its  direction  or  ex  officio  in  its  behalf.  For  the 
Commonwealth  may  waive  any  provision  of  any  condition,  express 
or  implied,  on  which  the  corporation  was  created  ;  and  courts  can- 
not give  judgment  for  the  seizure  by  the  Commonwealth  of  the 
franchises  of  any  corporation  unless  the  Commonwealth  be  a  party 
in  interest  to  the  suit  and  assents  to  the  judgment."^ 

A  corporation  cannot  within  the  meaning  of  the  law  forfeit  its 
rights  and  seal  up  the  corporation.  A  corporation  without  rights, 
without  legal  capacity  to  do  anything,  not  even  to  acquire  rights, 
is  an  impossibility.  It  has  never  been  seriously  contended  that 
mere  non-performance  of  conditions  subsequent  on  the  part  of 
a  corporation  has  the  effect  ex  jyroprio  vigore  to  put  an  end 
to  corporate  life.  By  such  non-performance  the  corporation  is 
not  ipiso  facto  dissolved  or  deprived  of  its  corporate  existence 
or  corporate  rights,  but  it  is  simply  exposed  to  proceedings  in 
behalf  of  the  State  to  establish  and  enforce  a  forfeiture.  The 
State  which  gave  the  corporate  life  may  take  it  away.  The  State 
which  imposed  the  conditions  may  waive  their  performance,  and 
the  corporate  life  may  run  on  until  the  State  by  proper  proceedings 
(ordinarily  quo  tvarranto,  or  in  the  nature  of  quo  tvarranto)  inter- 
poses and  enforces  a  forfeiture.^ 

Courts  of  equity  have  no  inherent  jurisdiction,  in  the  absence 
of  statute  conferring  the  same,  to  decree  a  dissohition  of  a  cor- 
poration or  declare  a  forfeiture  of  its  charter  on  any  grounds.^ 

1  Chaiii1.crl.iin  v.  Company,  118  Ma.ss.  N.  V.  .3f.G;  W.  &  B.  T.  Co.  v.  Marylan.l, 
532 ;  Taylor  v.  Company,  14  Allen  (Ma.S8.),      19  Md.  239. 

353;    Montf^omery   v.    Merrill,    18   Mich.  »  Conimonwealili  c  Company,  5  Mass. 

.338  ;  Bo.ston  Glass  Manufactory  v.  Lanj^-  230. 

linn,  24    I'ick.  (Ma.s.s.)  49;    Central  Nat.  ♦  Matter   of    Brooklyn    Elevated    Ky. 

Bank  V.  Company,  104  U.  S.  54.  Co.,  125  N.  Y.  434 ;  26  \.  K.  474. 

2  Rex  V.  Piwsmore.  3  Term  Beimrts,  *  Wheeler  v.  Company,  143  111.  197; 
199;  Slee  v.    Bloom,  5  Johnson's  Chan.  32   N.  E.  420;  Deuike    v.    Company,  80 

157 


^IL')    l.NCOUrOUATION  AND  ORGANIZATION  OF  CORPORATIONS.  [I'ART  I. 

The  iiriucipal  grounds  under  the  statute  upon  which  charters  will 
bo  forfeited  ni;iy  be  enumerated  as  follows:  (1)  non-user  of  cor- 
porate fi'iinchises;  (2)  mis-user  or  abuse  of  corporate  powers;  (3) 
for  non-i>erformauce  of  conditions  precedent  to  valid  existence  as 
a  corpDratit)!!  :  (4)  for  non-performance  of  conditions  subsequent 
to  valid  emitinuance  of  existence  as  a  corporation;  (5)  for  viola- 
tion of  express  statutes ;  (6)  for  non-])aynient  of  taxes ;  (7)  for 
insolvency.  These  will  now  be  taken  up  briefly  for  separate 
consideration. 

(1)  Forfeiture  for  non-user  of  corporate  franchises.  It  is  a  well- 
established  doctrine  of  the  law  that  courts  should  proceed  with 
extreme  caution  in  proceedings  which  have  for  their  object  the 
forfeiture  of  corporate  franchises;  nor  should  such  a  penalty  be 
visited  except  for  plain  abuse  of  power  by  which  the  corporation 
fails  to  fulfil  the  designs  and  purposes  of  its  organization.^  Again 
it  has  been  well  said :  "  It  is  not  every  failure  to  perform  a  duty 
imposed  that  will  work  a  forfeiture.  It  must  be  something  more 
than  accidental  negligence,  something  more  than  an  excess  of 
power,  something  more  than  a  mere  mistake  in  the  mode  of 
executing  the  acknowledged  powers ;  and  though  a  single  act 
of  simple  non-feasance  may  be  a  ground  of  forfeiture,  a  specific 
act  of  non-feasance  not  committed  wilfully  and  not  producing 
or  tending  to  produce  mischievous  consequences  to  any  one, 
and  not  being  contrary  to  formal  regulations  of  the  charter, 
will  not  be."  2 

All  these  judicial  utterances  are  little  more  than  a  declaration 
of  the  fact  that  the  policy  of  the  State,  of  its  officers  and  courts 
should  be  to  encourage  in  all  legitimate  ways  the  organization 
and  operation  of  all  corporations  organized  to  promote  any  legit- 
imate enterprise.  "  The  rights,  privileges,  and  franchises  of  such 
corporations,"  it  has  been  well  said,  "  should  not  be  declared 
forfeited,  and  they  should  not  be  ousted  and  excluded  therefrom, 
except  for  solid,  weighty,  and  cogent  reasons,  for  the  violation  of 
a  positive  or  prohibitory  statute  and  not  of  a  statute  whose  pro- 
visions are  permissive  and  apparently  directory,  and  never  upon 
mere  technical  grounds."^ 

The  terra  "  forfeiture  of  charter  for  non-user  of  corporate 
franchises,"   as   here   used,  has  a  very   broad   signification.     It 

N.Y.  599.    See  however  Miner  v.  Company,  ^  State  v.  Chemical  Bank,  lOO.  St.  535. 

93  Mich.  97  ;  Arents  v.  Comijauy,  101  Fed.  ^  State  v.  Company,  8  U.  I.  182. 

138.  3  Moore  v.  State,  71  Ind.  478. 
158 


CHAP,  v.]  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  115 

may  have  reference  to  action  taken  by  the  State  with  a  view 
to  forfeiture  of  corporate  charters  on  any  one  of  the  following 
grounds :  failure  to  organize  the  corporation  within  the  time 
prescribed  by  statute  ;i  failure  to  carry  on  the  business  enu- 
merated in  its  articles;  2  failure  to  elect  officers  ;2  failure  to 
maintain  domiciliary  office  within  the  State;*  failure  to  com- 
mence business  within  the  time  designated  by  statute.^ 

(2)  Forfeiture  for  misuse  or  abuse  of  corporate  powers.  "  To 
work  a  forfeiture  on  the  ground  of  misuser  or  abuse  of  corporate 
powers,  there  should  not  only  be  a  wrong,  but  one  arising  from 
wilful  abuse  or  improper  neglect.  The  corporate  default  must 
be  something  more  than  accidental  negligence  or  mere  mistaken 
excess  of  power,  or  mistake  in  the  mode  of  exercising  an  acknowl- 
edged power.  There  must  be  an  abuse  of  trust,  of  such  a  nature  as 
would  render  a  trustee  liable  to  forfeit  his  station  on  the  complaint 
of  his  cestui  que  trust  if  the  question  stood  on  the  relation  between 
them.  Corporations  are  political  trustees.  Have  they  fulfilled  the 
purposes  of  their  trust  or  acted  in  good  faith  with  a  view  to  fulfil- 
ment ?  is  the  question  to  be  asked  when  they  are  called  upon  to 
forfeit  their  charter,  either  for  acts  of  commission  or  omission."^ 

"  It  appears  to  be  settled,"  observed  the  New  York  Court  of 
Appeals,  "  that  the  State  as  prosecutor  must  show  on  the  part 
of  the  corporation  accused  some  act  against  the  law  of  its  being 
which  has  produced  or  tends  to  produce  injury  to  the  public.  The 
transgression  must  not  be  merely  formal  or  accidental,  but  mate- 
rial and  serious,  and  such  as  to  harm  or  menace  the  public  welfare. 
For  the  State  docs  not  concern  itself  with  the  quarrels  of  private 
litigants.  It  furnishes  for  them  sufficient  courts  and  remedies, 
but  interferes  only  where  some  public  interest  requires  its  action. 
Corjiorations  may  and  often  do  exceed  their  authority  where  only 
private  rights  are  affected.  But  when  the  transgression  has  a 
wider  scope  and  threatens  the  welfare  of  the  people,  they  may 
summon  the  offender  to  answer  for  the  abuse  of  its  franchises  or 
the  violation  of  its  corporate  duty."" 

1  State  V.  Simonton,  78  N.  C.  57.  ^  W.  F.  C.  F.  Co.  v.  Kittridgc,  .'>  Raw.  44 ; 

2  W.  C.  M.  Co.  V.  Burns,  1 14  N  C.  353  ;  People  r.  Rniik,  1-J!>  111.  018 ;  22  N.  E.  288. 
19  S.  E.  238.  "  People  v.  B.  &  K.  T.  Ji«>:i<l.  23  Wfiid. 

«  State  V.  Barron,  58  N.  II.  370.  222. 

<  State  V.  Company,  58  Minn.  330 ;  59  '  People  v.  Company,  121  N.  Y.  582  ;  24 

N.  W.  1048  ;  State  v.  Company,  50  Kan.     N.  E.  834  ;  see  al.^o  M.  O.  &  R.  R.  Co.  i;. 
151  ;  52  Pac.  422;  State  v.  Company,  45     Cross,  20  Ark.  443. 
Wis.  579. 

159 


§  111)    INCORPORATION   AND  ORCiANIZATION  OF  CORrORATIONS.    [PART  I. 

(3)  Forfeiture  for  non-performance  of  co}iditio7is  precedent. 
Evoii  a  corporation  defectively  organized  may  have  what  is 
termed  a  "  Jeftcto  existence,"  so  that  it  cannot  ordinarily  be 
impeached  by  parties  other  than  the  State.  Nevertheless  the 
rigiit  to  bring  proceedings  to  forfeit  the  charter  of  such  cor- 
poration vests  with  the  State  which  may  bring  proceedings  to 
forfeit  the  same  and  oust  it  from  the  exercise  of  corporate 
powers.^ 

(4)  Forfeiture  for  non-performance  of  conditions  subsequent.  It 
has  been  well  settled  that  charters  of  corporations  may  be  forfeited 
by  proper  action  brought  by  the  State  for  failure  to  comply  with 
conditions  subsequent  which  are  clearly  mandatory  and  not  merely 
directory  in  their  nature.^ 

(5)  Forfeiture  for  violation  of  express  statute.  This  is  one  of 
the  clearest  grounds  for  the  exercise  by  the  State  of  its  right 
to  forfeit  charters.  The  most  common  ground  for  the  exercise 
thereof  is  in  connection  with  anti-trust  legislation.^ 

(6)  Forfeiture  for  non-payment  of  taxes.  Several  of  the  States 
authorize  forfeiture  of  charters  for  non-payment  of  organization 
and  annual  franchise  taxes.  This  right  has  been  exercised  with 
great  frequency,  and  constitutes  unquestionably  a  valid  exercise 
of  the  power  of  such  legislature  over  corporations.* 

(7)  Forfeiture  for  insolvency.  In  the  absence  of  statutory  pro- 
vision to  that  effect,  insolvency  alone  will  not  authorize  the  State 
to  forfeit  corporate  charters.^  However,  it  is  unquestionably  valid 
for  a  State  to  prescribe  that  if  a  corporation  be  insolvent  for  a 
certain  length  of  time  it  shall  constitute  a  forfeiture  of  its  charter.^ 

§  116.   The  Police  Power  of  the  State.  —  The  police  power  of  the 

State  comprehends  all  those  general  laws  of  internal  regulation 
which  are  necessary  ro  secure  the  peace,  good  order,  health,  and 

1  Ilolman  v.  State,  105  Ind.  569 ;  People  bers,  42  Cal.  201  ;  Teople  ;;.  Bank,  129  111. 
V.  City  Bank,  7  Cul.  226  ;  3  Pac.  214.  618 ;  22  N.  E.  288 ;  24  N.  E.  8;J4. 

2  State  V.  Company,  1  Tenn.  Cases,  *  Ilughcsdale  Mfg.  Co.  v.  Vaiiiier,  12 
511  ;  People  v.  Company,  131  N.  Y.  140;  R.  I.  491 ;  Bank  v.  Company,  17  Aj).  Div. 
Hammond  i;.  Strauss,  53  Md.  1.  (N.  Y.)  524. 

3  Simmons  f.  Company,  113  N.  C.  147  ;  ^  People  v.  Bank,  6  Cowen  (N.  Y.), 
State  V.  Company,  24  Texas,  80;  Iluyler  211 ;  A.  &  L.  T.  Co.  v.  lloltlioii.se,  7  Ind. 
V.  Company,  40  N.  J.  Eq.  392;  People  v.  59;  State  v.  Bank,  13  Smeads&  M.  (Mi.ss.) 
Company,  60  How.  Pr.  82 ;  People  v.  Com-  569 ;  Chicago  Life  Ins.  Co.  r.  Needles, 
pany,  130  111.  268;  State  v.  Standard  Oil  113  U.  S.  574. 

Co.,  49  0.  St.   137;  People  v.  Company,  «  People  v.  Bank,  12  Mich.  526;  CM. 

121  N.  Y.  582  ;  see  also  People  v.  Cham-     L.  &  I.  Ass'n  v.  Hunt,  127  111.  257  ;  Denike 


V.  Company,  80  N.  Y.  599. 


160 


CHAP,  v.]   LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  116 

comfort  of  society,  but  the  proper  limit  in  its  bearing  upon  charter 
rights  and  privileges  of  private  corporations  for  public  uses 
would  seem  to  be  this  :  That  the  legislature  may  at  all  times  regu- 
late the  exercise  of  the  corporate  f  ranohises  by  general  laws  passed 
in  good  faith  for  the  legitimate  ends  contemplated  by  State  police 
power;  that  is,  for  peace,  good  order,  health,  comfort,  and  welfare 
of  society  ;  but  it  cannot  under  the  color  of  such  laws  destroy  or 
impair  the  franchises  itself,  or  any  of  the  rights  or  powers  which 
are  essential  to  the  exercise  of  it.^ 

After  the  decision  of  the  United  States  Supreme  Court  in  Dart- 
mouth College  V.  Woodward,^  that  court  proceeded  to  enunciate 
the  doctrine  that  in  the  exercise  of  what  is  termed  "  police  power," 
the  several  States  might  pass  laws  as  a  valid  exercise  of  such 
powers  when  otherwise  they  would  be  forbidden  to  do  so  under 
Section  10,  Article  1,  of  the  Constitution  of  the  United  States, 
which  forbids  the  impairing  of  the  obligations  of  contracts  by 
means  of  laws  enacted  by  them. 

The  police  power  arises  primarily  from  the  nature  of  the  social 
contract,  just  as  when  each  person  upon  becoming  a  member  of  a 
society  must  of  necessity  relinquish  some  of  the  rights  and  priv- 
ileges which,  as  an  individual  and  considered  alone,  he  might 
retain.  The  Supreme  Court  of  Massachusetts  in  Commonwealth 
V.  Alger  2  says :  "  All  property  is  subject  to  such  reasonable  re- 
strictions and  regulations  established  by  law  as  the  legislature 
under  the  governing  and  controlling  power  vested  in  them  by  the 
Constitution  may  think  necessary  and  expedient." 

In  Gibbons  v.  Ogden'*  the  United  States  Supreme  Court  held 
that  the  police  power  is  lodged  with  the  several  States.  In  Prov- 
idence Bank  v.  Billings''  the  court  took  another  step  forward,  and 
held  that  the  abandonment  on  the  part  of  the  State  of  its  power  of 
regulation  in  this  regard  ought  never  to  be  presumed  in  any  case 
where  the  purpose  of  the  State  to  abandon  it  does  not  clearly  api)ear. 
In  the  License  Cases  *^  the  court  held  that,  iu  (he  exercise  of  its 
police  power,  a  State  may  pass  quarantine  and  sauitary  laws  dnniag- 
ing  and  even  destroyiug  property  in  some  cases.  In  Bartcmcyer 
V.  Iowa"  the  court  held  that  a  State  law  prohibiting  the  manufac- 


1  r.  W.  B.  R.  K.  Co.  V.  Bowery,  4  IIuus-  ■•  9  Wlioat.  I. 
ton,  Del.  500.  ''  4  Peters.  ."iU. 

2  4  Wheat.  518.  *>  5  Iluwani,  404. 
«  7  Cush.  84.  '18  Wal.  133. 

11  161 


^  111)    INCORPOUATIOX   AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

tare  and  sale  of  intoxicating  liqnors  was  a  valid  exercise  of  the 
police  power.  In  JJeer  Company  v.  Massachusetts  ^  the  court  held 
that  as  a  measure  of  police  regulation,  looking  to  the  preservation 
of  public  morals,  a  State  law  prohibiting  the  manufacture  and  sale 
of  intoxicating  liquors  is  not  repugnant  to  any  clause  of  the  Con- 
stitution of  the  United  States. 

In  dingier  v.  Kansas^  it  was  held  that  a  State  may  absolutely 
prohibit  tlie  manufacture  and  sale  of  intoxicating  liquors  as  a 
beverage,  and  may  declare  places  where  such  liquors  are  manufac- 
tured or  sold  to  be  nuisances,  and  may  authorize  the  destruction  of 
such  li(iuors  found  therein,  and  of  all  property  used  in  keeping  and 
manufacturing  such  nuisances.  Such  a  statute  is  valid  as  to  such- 
liquors  lawfully  manufactured  before  the  enactment  of  the  statute, 
and  although  it  greatly  deteriorates  the  value  of  the  property  law- 
fully used  in  such  manufacture  before  the  enactment  of  the  statute. 

In  Munn  v.  Illinois  ^  it  was  held  that  when  the  owner  of  property 
devotes  it  to  a  use  in  which  the  public  has  an  interest,  he  in  effect 
grants  to  the  public  an  interest  in  such  use,  and  must  to  the 
extent  of  that  interest  submit  to  be  controlled  by  the  public  for 
the  common  good  as  long  as  he  maintains  the  use. 

In  Fertilizing  Company  v.  Hyde  Park  *  the  right  of  State 
authorities  to  compel  the  removal  of  a  bone  fertilizing  business 
from  a  location  near  the  village  to  a  ])oint  farther  removed,  was 
held  to  be  valid  as  an  exercise  of  the  police  power. 

In  the  Slaughter  House  Cases ^  the  court  held  that  the  power 
of  State  legislatures  to  make  a  contract  of  such  a  character  that 
under  the  provisions  of  the  Constitution  it  cannot  be  modified  or 
abrogated  does  not  extend  to  sul)jccts  affecting  public  health  and 
public  morals,  so  as  to  limit  the  further  exercise  of  legislative 
power  over  those  subjects,  to  the  prejudice  of  the  general  welfare. 

To  summarize  briefly  the  general  doctrine  of  the  federal 
Supreme  Court  on  this  subject,  the  same  may  be  done  by  present- 
ing the  following  abstract  propositions  : 

(1)  Laws  for  the  welfare  and  safety  of  a  community  being 
essential  to  the  existence  of  every  State,  it  cannot  be  supposed  to 
have  bf'cn  within  the  intention  of  the  original  thirteen  States  to 
limit  tliis  power  by  assenting  to  the  Federal  Constitution.^ 

1  97  U.  S.  25.  Mil  U.  S.  746. 

2  123  U.  S.  62.3.  <*  Louisville  &  N.  R.  Co.  v.  Kentucky, 

3  94  U.  S.  1 1.3.  161  U.  S.  677  ;  40  L.  E.  849. 

4  97  U.  S.  659. 

102 


CHAP,  v.]    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATION'S.   §  116 

(2)  Generally  speaking,  the  extent  to  which  a  State  can 
regulate  the  business  or  affairs  of  a  corporation  depends  upon 
the  nature  of  the  business —  whctlicr  it  affects  the  public  closely 
or  remotely.  If  it  is  of  such  a  character  or  magnitude  that  the 
public  are  directly  interested  in  its  proper  management,  then  it 
falls  within  the  proper  sphere  of  legislative  control. ^ 

(3)  Being  an  inherent  right  as  well  as  a  duty,  the  legislature 
may  pass  enactments  looking  towards  the  safety  of  life  and  prop- 
erty, and  general  laws  of  this  nature  are  a  legitimate  exercise  of 
the  "  police  power."  Thus  it  may  compel  railroads  to  fence  tracks, 
maintain  cattle  guards,  put  up  signboards  at  crossings,  construct 
viaducts,  require  all  trains  to  stop  at  intersections  of  railroads,  etc.^ 

(4)  Laws  intended  to  prevent  or  remove  nuisances  are  clearly 
within  the  "  police  power  "  of  the  State. ^ 

(5)  A  State  may  pass  laws  for  the  protection  of  its  inhabitants, 
against  the  evils  of  intemperance,  even  though  existing  contracts, 
be  affected  thereby.^ 

(6)  Laws  regulating  the  employment  of  persons  of  a  certain 
age  in  manufactories  are  a  valid  exercise  of  the  general  power  of 
the  State  to  enact  laws  to  secure  the  health  and  education  of 
the  community.^ 

(7)  A  State  may  by  statute  protect  the  interest  of  employees 
when  the  common  law  affords  no  protection ;  as  for  example, 
a  law  i)roviding  that  all  railroad  companies  sliall  be  liable  for 
wages  due  to  day  laborers  emjjloycd  by  contractors  engaged 
to  construct  the  company's  railroad  and  works  was  held  to  be 
valid.*' 

(8)  A  State  may  by  general  laws  regulate  the  use  and  dis- 
position of  property  within  its  jurisdiction,  although  existing 
incorporated  companies  be  thereby  affected.' 

(0)  A  State  may  jtass  laws  for  the  protection  of  the  morals 

1  Muiiii  V.  Illinois,  94  U.  S.  11.3  ;  24  28  L.  E.  629;  Muglcr  r.  K.iiis.is,  12.3  U.  S. 
L.  E.  77;  Pc.'ir.-all  v.  Company,  IGl  U.  S.     62.1. 

640;  40  L.  E.  838.  5  Knoxvillo  Iron  Co.  i-.  Ilarlnson,    18.3; 

2  Uehl  (-.Colorado,  187    U.  S.    1.37;  47     U.  S.  1.3;  40  L.  K.  55. 

L.  E.  108;  Smith  v.  Company,  181    U.  S.  <=  Kiioxville  Iron  Co.  i-.  Ilarhison,  18» 

248;  45  L.  E.  847.  V.  S.  1.3  ;  46  L.  E.  55  ;    Butrhers'  Union, 

•"  SlauL'litcr  House  Cases,  16  Wall.  .36;  etc.  r.  Company,  111  U.  S.  746;  28  L.  E. 

21  L.  E.  .31)4.  5H.") ;  Dent  v.  West  Virginia,  1 29  U.  S.  114  ; 

*  Hcymann    Brewing    Co.    v.    Brister,  .32  L.  E.  62.3 ;  Holden  r.  llanly,  169  U.  S. 

170  U.  S.  445;  45   L.  E.  269;    IJho.ies   v.  .366;  42  L.  E.  780. 

State  of  Iowa,  170    U.  S.  412;  42  L.   E.  ''  BikM   r.  New  York,   143  U.  S.  517; 

1088;  Foster  v.  Kansas,  112    U.  S.  201;  36  L.  E.  247. 

163 


$118    INCOUrORATION   AND  ORc; ANIZATION  OF  CORPORATIONS.    [PART  I. 

of  its  citizens,  even  though  vested  corporate  rights  be  tliereby 
an'octed.i 

vj  117.  Legislative  Investigation  into  Corporate  Affairs.  —  The 
statutes  of  California,  Michigan,  i\Iinnesota,  North  Dakota,  Okhi- 
lionia,  South  Dakota,  and  Wisconsin  contain  express  provisions 
for  the  appointment  of  legislative  connnittces  to  examine  into 
the  afTairs  of  corporations  organized  under  their  laws.  The  pro- 
visions of  the  South  Dakota  act  may  be  quoted  as  exemplifying 
the  nature  of  such  statutory  provision.     It  reads  as  follows : 

"The  legislative  assembly,  or  either  branch  thereof,  may  examine 
into  the  affairs  and  condition  of  any  corporation  in  this  State  at  all 
times  ;  and  for  that  purpose  any  committee  appointed  by  the  said 
assembly,  or  either  branch  thereof,  may  administer  all  necessary 
oaths  to  the  directors,  officers,  and  stockholders  of  such  corporation, 
and  may  examine  them  on  oath  in  relation  to  the  affairs  and  con- 
ditions thereof;  and  may  examine  the  safes,  books,  papers,  and  docu- 
ments belonging  to  such  corporation,  or  pertaining  to  its  affairs  and 
condition,  and  compel  the  production  of  all  keys,  books,  papers,  and 
documents  by  summary  process,  to  be  issued  on  application  to  any 
circuit  court  or  any  judge  thereof,  under  such  rules  and  regulations  as 
the  court  may  prescribe."  ^ 

Such  an  inquiry  as  is  authorized  by  the  statutes  just  referred  to 
has  been  held  not  to  constitute  a  judicial  act,  and  is  therefore  con- 
sidered a  valid  exercise  of  legislative  powers.^  On  this  particular 
subject  the  Supreme  Court  of  Massachusetts  spoke  as  follows : 

"The  inquiry  into  the  affairs  or  defaults  of  a  corporation  with  a 
view  to  continue  or  discontinue  it,  is  not  a  judicial  act.  No  issue  is 
framed.  No  decree  or  judgment  is  passed.  No  forfeiture  is  adjudged. 
Xo  fine  or  imprisonment  is  imposed.  But  an  inquiry  is  had  in  such 
form  as  is  deemed  most  wise  and  expedient,  with  a  view  to  ascertain- 
ing facts  upon  w^hich  to  exert  legislative  power  or  to  learn  whether 
a  contingency  has  happened  upon  which  legislative  action  is  required."^ 

§  118.  Legislative  Requirement  of  Annual  Reports  from  Corpora- 
tions. —  Statutes   exist    in    thirty-three   of   the    Commonwealths 

1  Austin  V.  Tennessee,  179  U.  S.  34.3;  2  gee.  478,  liev.  Civ.  Code;  sec.  2970, 

45  L.  E.  224  ;  Petit  v.  Minnesota,  177  U.  S.  Comp.  L. 

164;  4L.  E.  716;   Ilanninf^ton  t'.  Geor<.'ia,  "  Lothrop  v.   Stedman,  42  Conn.  583; 

161  U.    S.  299;  41  L.  E.   166;L'IIote    v.  Fed.  Cas.  No.  8519. 
New  Orleans,  77  U.  S.  587 ;  44  L.  E.  899.  *  Crease  v.  Babcock,  23  Pick.  344. 

1G4 


CHAP,  v.]    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.   §  119 

requiring  annual  reports  from  domestic  corporations.^  The  valid- 
ity of  such  statutes  was  considered  by  the  Supreme  Court  in  the 
case  of  Eagle  Insurance  Company  v.  State  of  Ohio.^  The  court 
in  its  opinion  therein  spoke  as  follows  : 

'•'  The  right  of  the  plaintiff  in  error  to  exist  as  a  corporation  and  its 
authority  in  that  capacity  to  conduct  the  particular  business  for  which 
it  was  created  were  granted  subject  to  the  condition  that  the  privileges 
and  franchises  conferred  upon  it  should  not  be  abused  or  so  employed 
as  to  defeat  the  ends  for  which  it  was  established,  and  that  wheu  so 
abused  or  misemployed  they  might  be  withdrawn  or  reclaimed  by  the 
State  in  such  way  and  by  such  modes  of  procedure  as  were  con- 
sistent with  law.  Although  no  such  condition  is  expressed  in  the 
plaintiff's  charter,  it  is  implied  in  every  grant  of  corporate  existence. 
Equally  implied  in  our  judgment  is  the  condition  that  the  corporation 
shall  be  subject  to  such  reasonable  regulations  in  respect  to  the  general 
conduct  of  its  powers  as  the  legislature  may  from  time  to  time  pre- 
scribe which  do  not  materially  interfere  with  or  obstruct  the  sub- 
stantial enjoyment  of  the  privileges  the  State  has  granted  only  to 
secure  the  ends  for  which  the  corporation  was  created.  If  this  con- 
dition be  not  implied,  tlien  the  creation  of  corporations  with  rights 
and  privileges  which  do  not  belong  to  individual  citizens  may  become 
dangerous  to  the  public  welfare  through  the  ignorance  or  misconduct  or 
fraud  of  those  to  whose  management  their  affairs  are  entrusted.  It 
would  be  extraordinary  for  the  legislative  department  of  a  govern- 
ment, charged  with  the  duty  of  enacting  such  laws  as  may  promote 
the  health  or  morals  or  prosperity  of  the  people  might  not  when 
unrestrained  by  constitutional  limitations  upon  its  authority,  provide 
by  reasonable  regulations  against  the  misuse  of  special  corporate 
privileges  which  it  has  granted,  and  which  could  not  except  by  its 
sanction,  express  or  implied,  have  been  exercised  at  all." 

The  conclusion  of  the  court  in  the  case  just  referred  to  was  that 
the  charter  of  the  corporation  did  not  cxemjit  it  from  obligations 
to  comj)ly  with  tlie  subsefiucntly  established  jtolice  reguhuions  of 
the  State,  requiring  certain  corporations  to  make  annual  state- 
ments of  their  condition. 

§119.  Inspection  of  Corporate  Books.  —  In  all  the  Common- 
wcaltlis  but  five  statutes  have  Itccn  enacted  rcfjuiring  (he  keeping 
of  certain  corporate  books  and  giving  to  stockholders,  and  some- 
times to  creditors   as   well,  the  right  to  insjK-ct  the  same.     At 

1  See  Part  III.  Table  7,  page  577.  2  153  \^_  g.  440. 

1G5 


§110    INCOUrORATION   AND  OIUJANIZATION   OF  CORPORATIONS,    [I'ART  I. 

coimiioii  law  stockholders  had  the  rij^ht  to  inspect  books  and 
pajJCi'S  of  the  coi'i)oration  at  reasonable  times  and  lor  a  proper 
jturpose.^     Creditors  had  no  such  common  law  i-ights. 

On  this  subject  the  New  York  Court  of  Aj)peals  in  the  Mutter 
of  Steinway  -  sj)oke  as  follows : 

''  The  elementary  works  unite  in  holding  that  the  incorporator  has 
the  right  in  question  and  that  uiaudamus  is  the  proper  remedy.  We 
think  that  according  to  the  decided  weight  of  authority  a  stockholder 
has  the  right  at  common  law  to  inspect  the  books  of  his  corporation 
at  a  proper  time  and  place  and  for  a  proper  purpose,  and  that  if  this 
right  is  refused  by  the  officers  iu  charge,  writ  of  mandamus  may  issue 
in  the  sound  discretion  of  the  court  with  suitable  safeguards  to 
protect  the  interests  of  all  concerned.  It  should  not  be  issued  to  aid 
a  blackmailer,  nor  withheld  simply  because  the  interest  of  the  stock- 
holder is  small,  but  the  court  should  proceed  cautiously  and  dis- 
creetly, according  to  the  facts  of  the  particular  case.  To  the  extent, 
however,  that  an  absolute  right  is  conferred  by  statute,  nothing  is 
left  to  the  discretion  of  the  court  but  the  writ  to  issue  as  a  matter 
of  course,  although  ev^en  then  doubtless  due  precautions  may  be  taken 
as  to  time  and  place  so  as  to  prevent  interruption  of  business,  or 
other  serious  inconvenience.  We  do  not  think,  however,  that  the 
statute  now  in  force  in  this  State  is  exclusive,  or  that  it  has  abridged 
the  common  law  right  of  stockholders  with  reference  to  the  examina- 
tion of  the  corporate  books.  By  enabling  tlie  stockliolder  to  get  some 
information  in  a  new  way,  it  did  not  impliedly  repeal  the  common 
law  rule,  which  enabled  him  to  get  other  information  in  another  way, 
for  the  courts  do  not  hold  the  common  law  to  be  repealed  by  impli- 
cation unless  the  intention  is  obvious.  By  simply  providing  an  addi- 
tional remedy  the  existing  remedy  was  not  taken  away.  The  statute 
merely  strengthens  the  common  law  rule  with  reference  to  one  part 
thereof,  and  left  the  remainder  intact." 

The  right  of  inspection  of  corporate  books  is  not  the  inspection 
of  the  idle,  the  impertinent,  or  the  curious,  but  an  inspection  with 
a  laudable  object  to  accomplish,  or  a  real  and  actual  interest  upon 
which  is  predicated  the  request  for  information  disclosed  by  the 
books.^ 

1  People  V.  Eadie,  63   Hun,  320;    133  2  159  N.  Y.  250. 

N.  Y.  573 ;    Burham  v.  Company,  76  Cal.  ^  State  ez  rel.  Bourdctto  v.  Company, 

24;  17  Pac.  940;  Plicenix  Iron  Co.  v.  Com-     49  La.  Ann.  1556;  22  So.  815. 
monwealth,  113  Pa.  St.  563;  Hemingway 
V.  Hemingway,  58  Coun.  443. 
lUG 


CHAP,  v.]  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  120 

The  purpose  of  requiring  a  copy  of  stock  books  and  books  of 
account  at  the  corporation's  domiciliary  office  is  to  protect  the 
rights  of  stockholders  and  to  aid  the  State  in  exercising  its  visito- 
rial  powers,  or  to  enable  creditors  or  stockholders  to  ascertain  the 
number  of  shares  standing  in  the  names  of  each  so  as  to  levy 
execution  and  attachment  thereon.  The  mere  fact  that  a  domestic 
corporation  has  kci)t  its  books  in  another  State  wlien  required  by 
law  to  keep  its  books  at  its  domiciliary  office,  is  not  a  ground  for 
dissolving  the  corporation  when  parties  entitled  to  inspection  of 
such  books  have  never  been  refused  the  right  to  inspect  the  same 
at  the  domiciliary  office.^ 

§120.  Anti-Trust  Legislation. —  The  term  "trust"  includes 
any  form  of  combination  or  combinations  between  corporations  or 
between  corporations  and  individuals  for  the  purpose  of  regulating 
production  and  repressing  competition  by  means  of  the  power 
thus  centralized.^ 

Under  the  common  law  agreements,  pools,  trusts,  or  combina- 
tions between  persons  or  corporations  looking  towards  any  absolute 
restraint  of  trade  or  to  regulate  prices  or  to  promote  monopolies, 
were  against  public  policy,  and  as  such  were  unlawful  and  void. 
But  when  the  question  of  public  policy  is  at  issue,  certain  matters 
should  be  noted. 

It  has  been  well  said  "  that  the  public  policy  of  the  State  varies 
from  time  to  time.  It  is  not  to  be  measured  by  the  private  com- 
bination or  combinations  of  the  persons  who  hajipcn  to  be  exer- 
cising judicial  functions,  but  by  reference  to  the  enactment  of  the 
law-making  power,  and  in  the  absence  of  them  to  the  decisions  of 
the  courts.  When,  however,  the  legislature  has  spoken  upon  a 
particular  subject  and  within  the  limits  of  its  constitutional 
powers,  its  utterance  is  the  puldic  policy  of  the  State."  ^ 

Congress  dealt  with  illegal  trade  combinations  in  relation  to 
interstate  commerce  as  early  as  1887,  when  it  passed  the  Inter- 
State  Commerce  Act,  and  later  on,  July  2, 1890,  it  pnssed  what  is 
known  as  tlic  "  Sherman  Anti-Trust  Act."  Since  that  lime  thirty- 
three  of  the  States  have  ])assed  more  or  less  stringent  anti-trust 
acts.*     All  tiiis  legislation  has  Ix-en  framed  with  the  same  purpose. 

1  Rililing  Stock  Co.  v.  I'eoplf',  147  111.  ^  MacGiiini8.'<  v.  Coin|).ii)y  (Afont.),  75 
234  ;  .3.')  N.  K.  COS.                                             Pac.  8'J ;  Unitod  States  v.  Association,  166 

2  MacGiiiiiis.s  v.  Company  (Mont.),  75     U.  S.  2!)0 ;  41  L.  K.  1007. 

Pac.  8'J.  ■•  See  Part  III.  Table  3,  page  573. 

107 


v?  1:21    INCORl'OUATION  AND  0R(! ANIZATION   OF  COUPORATIONS.    [PART  I. 


In  some  of  these  acts  an  arbitrary  distinction  is  made  between 
dealers  and  producers.  Sucli  provisions  have  under  certain  cir- 
cumstances been  declared  to  bo  "  class  legislation,"  and  as  such 
are  invalid  under  the  Fourteenth  Amendment  to  the  Federal 
Constitution. 

Under  this  princijile  the  anti-trust  acts  of  Illinois  and  Texas 
have  recently  been  declared  to  be  unconstitutional. ^ 

In  the  note  below  will  l)e  found  the  dates  of  the  passage  of  the 
earlier  anti-trust  acts  in  the  several  States.^ 

§  121.  Regulation  of  Internal  Affairs. — In  many  of  the  States 
the  regulation  of  the  internal  affairs  of  corporations  has  been 
largely  delegated  hy  statute  to  the  corporations  themselves.  Such 
is  the  case  in  Alabama,  Connecticut,  Delaware,  Iowa,  Maryland, 
Massachusetts,  New  Jersey,  Nebraska,  New  York,  North  Carolina, 
South  Carolina,  Tennessee,  Utah,  Virginia,  West  Virginia,  and 
Wisconsin. 

In  other  of  the  Commonwealths,  without  express  provision  of 
law  permitting  the  same.  State  officials  allow  clauses  for  the 
regulation  of  the  internal  affairs  of  the  corporation  to  be  in- 
corporated in  articles  of  incorporation  filed  with  them.     As  an 


1  Couuolly  V.  Union  S.  P.  Co.,  184 
U.  S.  540;  46  L.  E.  679  ;  State  v.  Shippers 
&  Compress  Warehouse  Co.,  95'rexas,  60.'5; 
69  S.  W.  5S;  Ford  v.  Association,  1.55  111. 
166;  39  N.  E.  651  ;  Harding  v.  Company, 
182  111.  551  ;  55  N.  E.  577.  Sec  al.so 
Northern  Securities  Co.  v.  United  States, 
193  U.  S.  197. 

2  The  Federal  Anti-Trust  Act  commonly 
known  as  "the  Sherman  Act"  was  ap- 
proved July  2,  1890.  The  following  is  a 
list  of  tlie  States  wherein  antitrust  legis- 
lation of  a  more  or  less  comprehensive 
character  wa.s  passed,  together  with  the 
date  the  same  went  into  effect : 

Alabama,  Insurance  Act.  Feb  18,  1897; 
Arkansa.s,  Anti-Tru.';t  Act,  Mar.  16,  1897  ; 
California,  Cattle  Trust  Act,  Feb.  27, 1893  ; 
Delaware,  Life  Insurance  Act,  Feb.  15, 
1891;  Florida,  Traile  in  Cattle,  June  11, 
1897;  Georgia,  A nti-.Monopoly  Act,  Dec.  23, 
1896  ;  Illinois,  Prohibitory  l^ols,  Tru.sts, 
and  Combinations,  Original  Act,  July  11, 
1891,  amended  June  10,  1897;  Indiana, 
Mar.  5,  1897,  General  Anti-Trust;  Iowa, 
General  Anti-Trust,  May  6,  1890;  Kansas. 
Mar.  8,  1897,  defines  a  trust  in  five  aec- 
1G8 


tious  ;  Kentucky,  General,  May  20,  1890; 
Louisiana,  General  went  into  effect  July  7, 
1892  ;  Maine,  General,  Mar.  7,  1889  ;  Mich- 
igan, became  a  law  July  1,  1889;  Minne- 
sota, April  20,  1891  ;  Mississippi,  Part  of 
the  Code  of  the  General  St.  Laws  of  Mis- 
sissippi adopted  in  1892,  and  amended 
March  11,  1896;  Missouri,  Original  Act, 
April  2,  1891,  revised  under  Act  of 
April  1 1 ,  1895,  and  revised  again  March  24, 
1897;  Montana,  Annotated  Code  of  189.5, 
sees.  321-325  ;  Nebraska,  Act  of  April  8, 
1897;  New  Mexico,  Feb.  4,  1891;  New- 
York,  May  7,  1897;  North  Carolina, 
March  11,1889;  North  Dakota,  March  9, 
1897;  Oklahoma,  Dec.  25,  1890;  South 
Carolina,  Feb.  25,  1897;  South  Dakota, 
March,  1,  1897  ;  Tennes.seo,  April  6,  1889 
amended  March  ."30.  1891  ;  Texas,  Origi- 
nal Act,  .March  30,  1889,  amended  April  30, 
1895;  Utah,  March  9,  189G;  Washington, 
Con.,  Art.  XII.  .sec.  22,  and  al.so  Act  of 
March  21,  1895,  Session  Laws,  1895, 
chap,  cxlviii. ;  Wisconsin,  April  27,  1897. 
(See  "  Biography  of  Commercial  Trusts," 
by  Wm.  II.  Winters,  Librarian  of  the 
N.  Y.  Law  Institute  in  1890.) 


CHAP,  v.]    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.   §  122 

example  oi'  the  statutes  above  referred  to,  attention  is  called  to  the 
provisions  of  the  New  Jersey  Act,  which  reads  as  follows : 

"  The  certificate  of  incorporation  may  also  contain  any  provision 
which  the  incorporators  may  choose  to  insert  for  the  regulation  of  the 
business  and  for  the  conduct  of  the  affairs  of  the  corporation,  and  any 
provision  creating,  defining,  limiting,  and  regulating  the  powers  of  the 
corporation,  the  directors,  and  the  stockholders  or  any  class  or  classes 
of  stockholders."  ^ 

"Without  such  statutory  authority  State  officials  are  unquestion- 
ably justified  in  refusing  to  allow  articles  of  incorporation  to  be 
filed  containing  such  clauses  as  are  here  referred  to.^ 

The  Court  of  Appeals  of  New  York  in  an  early  case,  commenting 
upon  the  legal  effect  of  the  insertion  of  provisions  in  the  articles 
not  authorized  by  the  incorporation  act,  spoke  as  follows : 

"  The  want  of  autliority  for  this  provision  would  not  affect  the 
validity  of  the  corporation.  The  articles  must  contain  the  statements 
affirmatively  required  by  the  act,  because  those  statements  constitute 
tlie  conditions  precedent  to  the  right  of  the  company  to  become 
incorporated.  If  unauthorized  provisions  are  added,  all  the  acts  done 
pursuant  to  such  provisions  will  be  void,  but  until  the  company  is 
proceeded  against  for  abuse  of  its  franchises  its  rights  as  a  corporation 
will  not  be  affected  by  such  unauthorized  provisions."  ^ 

The  more  modern  view  in  regard  to  such  matters  is  that  where 
State  officials  arc  either  expressly  or  im{)licdly  empowered  to  pass 
upon  tlic  validity  of  articles  of  incorporation  submitted  to  them 
witli  a  view  to  filing  in  their  office,  the  approval  of  such  State 
ofiicial  once  obtained  renders  such  clauses  as  are  here  referred  to 
valid  as  against  all  but  the  State,  even  when  their  insertion  in  the 
articles  is  not  cxpi'essly  authofi/.cd.* 

S  122.  Liability  of  Stockholders  for  Debts  of  the  Corporation.  — 
The  general  subject  of  stockholders'  liability  iimy  be  best  dis- 
cussed under  three  heads:  (a)  Lialiility  for  unpaid  stock  subscrip- 
tions; (Jj)  Double   liability  as   established    by  statute  in  certain 

1  New  Jersey  Session  Laws  of  189C,  '  Kastoni  Plank  Ivoad  Co.  i'.  Vaughan, 
chap.  185,  sec.  H,  suhdi vision  7.  14  N.  V.  .')51. 

2  In   re    Stevedore.s'   IJencficial   Ass'n,  *  Sec  ante,  sec.  C. 
14  Phila.  Pa.  130;  see  anlt,  sec.  5. 

IGO 


§  '['2-2    INCOliPORATIOX  AND   ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

Statos;  (f)  Special  liability  as  established  by  statute  in  certain 
States. 

{(()  Liability  for  unpaid  stock  subscrii)tion.  The  statutes  which 
exist  in  nearly  every  Comuiouwealth  in  the  Union  makinji;  stock- 
liolders  liable  for  unpaid  stock  subscriptions  are  merely  declaratory 
of  the  common  law.^  The  liability  of  stockholders  of  corporations 
for  unpaid  stock  subscriptions  with  reference  to  creditors  is  often- 
times confused  with  their  liability  to  the  corporation  itself.  Tlie 
latter  liability  is  directory  and  the  right  to  enforce  it  may  be 
waived  by  the  corporation.  In  the  absence  of  such  waiver  the 
subscribing  stockholders  arc  bound  by  the  contract  of  subscription 
to  pay  the  full  value  of  their  shares  in  such  instalments  and  in 
such  manner  as  may  be  prescribed  by  the  laws  of  the  State  or  by- 
laws of  the  cor[)oration.  In  such  cases  the  liability  may  be  enforced 
by  the  ordinary  remedies.  The  corporation  usually  has  a  lien 
upon  the  stock,  and  may  sell  the  same  in  satisfaction  of  the  debt, 
and  may  collect  the  deficiency,  if  any,  by  action  against  the  delin- 
quent stockholders. 

On  the  other  hand,  as  the  corporation  is  a  legal  entity  distinct 
from  the  stockholders  who  constitute  it,  no  debts  or  obligations 
incurred  by  it  can,  in  the  absence  of  a  direct  statutory  provision, 
impose  any  lawful  liability  upon  the  stockholders.  But  in  equity, 
under  what  is  termed  the  "  trust  fund  doctrine,"  the  debts  of  the 
stockholders  to  the  corporation  are  regarded  as  equitable  assets  of 
the  corporation  and  may  be  reached  by  the  creditors  if  the  legal 
assets  prove  insufficient.  This  trust  fund  doctrine  derives  its  main 
support  at  the  present  time  from  the  Supreme  Court  of  the  United 
States,  but  it  has  secured  recognition  in  many  jurisdictions. 

As  stated  in  Sanger  v.  Upton,'-^  "  The  capital  stock  of  an  incor- 
porated company  is  a  fund  set  apart  for  payment  of  its  debts.  It 
is  publicly  pledged  to  those  who  deal  with  the  coi-poration  for  their 
security.  Unpaid  stock  is  as  much  a  part  of  this  pledge,  and  as 
much  a  part  of  the  assets  of  the  company  as  the  cash  which  has 
been  paid  in. 

"  The  stockholders  thus  become  individually  liable  for  the  debts 
of  the  corporation,  to  the  extent  of  the  unpaid  balance  on  their 
stock.  They  are  also  in  some  States  subject  to  other  statutory 
liabilities  hereinafter  set  forth.  The  statutory  remedy  is  usually 
by  equitable   action,  but  in  some  States    by  an  action  at  law. 

1  Taylor  v.  Cummiugs,  127  Fed.  108.  2  91  u.  S.  60. 

170 


CHAP.  V.J  LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  122 

Under  nearly  all  such  statutory  provisions,  the  liability  of  stock- 
holders is  intended  merely  as  a  secondary  security  for  creditors 
in  case  the  assets  of  the  corporation  are  insufficient  to  meet  its 
debts,  but  in  special  cases  stockholders  may  be  made  parties 
defendant  in  an  original  action,  and  if  they  are  obliged  to  pay  any 
debt  of  the  corporation  they  may  bring  an  action  against  the  cor- 
poration for  the  amount  so  paid,  and  are  usually  entitled  also 
to  exact  contribution  from  the  other  stockholders." 

The  only  other  questions  which  are  of  practical  importance  in 
connection  with  the  present  subject  may  be  restricted  to  two  classes  : 
one  relates  to  the  liability  for  unpaid  stock  subscriptions  to  cred- 
itors as  between  the  transferor  and  the  transferee,  and  the  other  re- 
lates to  the  liability  to  creditors  of  pledgees  and  trustees  of  stock. 

With  reference  to  the  first  question  it  may  be  said  that  the 
question  depends  upon  the  law  of  the  State  in  which  the  stock- 
holder may  reside  and  in  which  action  maybe  brought.^  In  most 
States  transferors  of  stock  are  not  subject  to  stockholders'  liabiUty, 
and  are  thereafter  released  from  liability  for  assessments  made  by 
the  corporation. 2 

In  the  absence  of  statutory  provision  to  the  contrary,  a  bona  fide 
transfer  of  stock  perfected  on  the  books  of  the  corporation,  dis- 
charges the  transferor  from  any  further  liability  either  to  the 
corporation  or  to  creditors  for  calls  made  after  the  transfer  and  for 
calls  made  prior  thereto,  and  tlie  transferee  takes  his  place  and 
becomes  liable  for  calls  made  after  the  transfer  but  not  for  calls 
made  before,^  The  distinction  which  clearly  obtains  between  one 
who  holds  his  stock  by  transfer  and  one  who  is  an  original  sub- 
scriber to  the  stock  of  the  cor[)oration,  must  be  carefully  noted. 
The  former  may  in  good  faith  discharge  himself  from  liability  for 
unpaid  instalments  by  due  transfer  of  his  shares,  while  the  latter 
cannot  oi)tain  immunity  in  this  way.  The  subscriptions  for  stock 
and  the  acceptance  of  a  certificate  foi-  the  shares  constitute  a  con- 
tract between  the  subscriber  and  the  corporation  by  wliich  he 
engages  to  pay  the  remaining  instalments  on  demand  from  the 
corporation.  From  this  agreement  the  subscriber  cannot  recede 
without  the  consent  of  the  corporation.'*     In  some  of  the  States 

1  Glrnn  v.  Hunt,  120  Mo.  330;  25  also  SiK»a  Iron  Co.  «;.  IJrowii,  171  N.  Y. 
S.  W.  181.  488;  C4  N.  E.  194. 

2  M    L.  T.  Co.  V.  Ward,  13  Ohio,  120.  *  I1'>..(1  v.  IMcNauglitoii,  .'J4  N.  J.  Law, 
8  ruUman  v.  Upton,  96  U.  S.  328;  see    425;  24  All.  497. 

171 


§  I'll    INCOUrORATIOX   AND  OIK! AMZATION  OP  COUrORATIONS.     [PAIIT  I. 

this  matter  is  rciriilated  by  statute.  In  Maine,  Massachusetts, 
North  Carolina,  West  Virginia,  the  original  subscriber  alone  is 
liable.  In  Illinois,  Iowa,  Nebraska,  New  Hampshire,  Rhode 
Island,  and  Vii'ginia  the  original  subscriber  remains  liable  as  well 
as  the  transferee.^  In  Georgia,  Ohio,  Tennessee,  and  Oregon  the 
original  subscriber  is  liable  upon  default  in  payment  by  the  trans- 
feree. In  Mississippi  and  Wisconsin  the  original  subscriber 
remains  liable  for  the  debts  contracted  before  his  ownership  or 
those  contracted  thereafter.  In  California,  Indiana,  Kentucky, 
Maryland,  Michigan,  Minnesota,  New  York,  and  Tennessee  the 
original  subscriber  remains  liable  for  the  debts  of  the  corporation 
contracted  during  his  ownership  and  not  for  debts  contracted  after 
such  transfer.  In  Alabama,  Anzona,  Arkansas,  Colorado,  Con- 
necticut, Delaware,  District  of  Columbia,  Florida,  Idaho,  Kansas, 
Louisiana,  Massachusetts,  Minnesota,  Missouri,  Montana,  New 
Jersey,  North  Dakota,  Oklahoma,  Pennsylvania,  South  Carolina, 
South  Dakota,  Texas,  Utah,  Vermont,  Washington,  and  Wyoming 
upon  the  transfer  of  stock  the  transferee  becomes  liable  for  all 
debts  contracted  both  before  and  after  transfer,  and  the  transferor 
is  discharged  in  all  these  States  as  to  debts  contracted  after  such 
transfer,  and  in  some  of  these  States  from  liability  for  debts  con- 
tracted before  such  transfer  as  well.^ 

Turning  now  to  the  question  of  liability  of  pledgees  and  trustees 
of  stock,  it  may  be  said  that  unless  protected  by  statute,  as  is  the 
case  in  New  York,  Missouri,  California,  and  Michigan,  the  pre- 
vailing rule  seems  to  be  that  pledgees  and  trustees  of  stock  are 
liable  thereon  to  the  extent  of  the  unpaid  portion  of  the  stock  held 
by  thcm.3 

On  the  other  hand  the  Supreme  Court  of  the  United  States  has 
enunciated  a  dilTerent  doctrine  to  the  effect  that  a  pledgee  of  stock 
taken  as  collateral  security  or  as  a  loan  is  not  subject  to  personal 
liability  for  the  debts  of  the  corporation  imposed  on  other  share- 
holders unless  he  has  either  become  the  owner  of  the  shares  in  fact 
or  has  held  himself  out  to  be  the  owner,  and  thereby  estopped  him- 
self from  denying  his  personal  liability  as  such.'* 

1  White  V.  Greene  (Iowa),  70  N.  W.  65  S.  W.  C30 ;  Germania  National  Bank 
182;  Sprague  v.  Bank,  172  111.  149;  50  v.  Case,  99  U.  S.  628;  McMahon  v.  Macv, 
N-  E.  190.  51  N.  Y.  155. 

2  Viin  Cott «.  Van  Brunt,  82  N.  Y.  .535.  *  Rankiu  v.  F.   I.    T.   &   D.  Co.,    189 

3  Hole  f.   Walker,  31   la    344;  Union  U.  S.  242. 
Savings  A.ss'a  v.  Seligman,  92  Mo.  635; 

172 


CHAP,  v.]   LEGISLATIVE  CON'TEOL  OVER  DOMESTIC  CORPORATIONS.  §  122 

(b)  Double  liability  as  established  by  statute  in  certain  States. 
What  is  known  as  the  "  double  liability  "  of  stockholders  for  debts 
of  the  corporation  which  existed  formerly  in  a  large  number  of 
States,  has  now  been  so  far  removed  by  statute  that  it  exists  at 
the  present  time  in  the  case  of  ordinary  business  corporations  in 
only  two  States,  to  wit,  California  and  Minnesota.^  In  the  last- 
mentioned  State  it  does  not  exist  in  the  case  of  corporations 
organized  exclusively  for  the  purpose  of  carrying  on  a  manufac- 
turing, mining,  or  mechanical  business.^ 

(c)  Special  liability  as  established  by  statute  in  certain  States. 
Stockholders  at  common  law  were  not  liable  for  debts  of  the 
corporation  beyond  their  liability  for  unpaid  stock  subscriptions.^ 
Personal  responsibility  of  stockholders  is  inconsistent  with  the 
conception  of  corporate  liability  at  common  law,  and  for  this 
reason,  if  it  exists  at  all,  must  rest  upon  some  positive  statute.* 

The  particular  liability  under  consideration  here  arises  by 
reason  of  the  existence  of  statutory  provisions  that  may  be  stated 
as  follows :  Liability  of  incorporators  as  partners  through  failure 
to  legally  organize  the  corporation.  In  Florida,  Iowa,  Minnesota, 
Nebraska,  and  Wisconsin  stockholders  are  individually  liable  by 
statute  for  failure  to  comply  with  certain  prescribed  regulations  in 
regard  to  organization  and  publicity. °  In  a  few  of  the  States  the 
courts  construe  the  liability  of  incorporators  where  they  have  failed 
to  legally  organize  the  corporation,  not  as  partners  at  all.  This 
on  the  ground  that  no  such  relationship  or  liability  is  contemi)lated 
by  the  incorporators,  and  that  the  creditors'  only  remedy  is  against 
the  officers  and  agents  who  actually  made  the  contract.^ 

In  Indiana,  Massachusetts,  Michigan,  New  York,  North  Dakota, 

^  The  liability  may  possibly  still  exist  N.  J.  Law,  52 ;  Ciar  i'.  Ij,'lehart,  3  O.  St. 

in  Iii'liaiia  ami  Kansas  ;  see  pages  2.57, 205.  457. 

2  Sacramento   Bank    v.    Pacific  Rank,  ^  Kaiser  ?;.  Bank,  5G  Iowa,  104;  8  N.  W. 

124  Cal.  147;    56  Pac.  787  ;   Daniolson  ?'.  772;  Fuller  u.  Uowe,  57  N.  Y.  23  ;  Connor 

Yoakum,  1 16  Cal.  382  ;  48  Pac.  322  ;  N.  II.  v.  Abbot,  35  Ark.  366 ;  John.son  v.  Corser, 

II.  N.  Co.  V.  Company,   142   Mass.  349;  7  34    Minn.   355;    25  N.    W.   79'J  ;   Hurt  v. 

N.  E.  773  ;  Bates  r.  Dav,  198  Pa.  St.  513  ;  Salisbury,  55  Mo.  310  ;  Bergeron  v.  llobbs, 

48  At).  407  ;  WliitrnanV.  Bank,  176  U.  S.  96   Wis.'  641  ;   71   N.  W.  1056;  Clegg  v. 

559;    Willis    i-.    Mabon,    48    .Minn.    140;  Company,  61    Iowa,   121  ;   15  N.   W.  365; 

50  X.  W.  1110  ;  Marsliall  v.  Slierman,  148  Slocum  v.  Head,  105  Wis.  4.31  ;  81  N.  W. 

N.  Y.  9  ;  42  N.  E.  419  ;  Tattle  v.  National  673. 
Bank,  161  111.  497;  44  N.  E.  984.  o  War.l    r.    Brif,rbani,    127    Ma.ss.    24; 

8  Toner  i'.  Faulkcrson.   125  Ind.  224;  Rutherford  r.  Hill,  22  Ore.  218;  25  Pac 

25  N.  E.  218;  Hood  v.  McNaughton,  54  546;  Canfield  v.  Gregory,  66  Conn.  9 ;  33 

N.  J.  L.  425;  24  Atl.  497.  Atl.  536  ;  Bank  r.  Hall,  35  O.  St.  158. 

♦  S.  L.  C  N.  Bank  v.  Ilendrickson,  40 

it;3 


§  123    INCOin'OKATlON  AND  0R(-: ANIZATION  OF  CORPORATIONS.     [PART  I. 

Oklahoma,  Ponnsylvania,  Soutli  Dakota,  Tennessee,  antl  Wiscon- 
sin they  arc  liable  for  the  wages  of  employees  of  the  corporation. 
In  New  York,  in  what  is  known  as  fnll  liability  corporations, 
stockholders  arc  liable  for  debts  of  the  corporation  in  full.  In 
Arkansas,  Delaware,  Iowa,  Maine,  IMichigan,  Minnesota,  New 
llami)s]iire,  New  Jersey,  North  Carolina,  Vermont,  and  West 
Virginia  stockholders  arc  individnally  liable  to  the  extent  of 
any  i>art  of  tlic  corporate  assets  refunded  to  them  respectively. 
In  Idaho,  ^linncsota,  North  Carolina,  and  South  Carolina  stock- 
holders ai-o  individually  liable  for  any  fraud  or  misconduct  on 
their  j)art.  In  Arizona,  Delaware,  Iowa,  and  Nebraska  stock- 
holders are  personally  lial)le  for  the  debts  of  the  corporation, 
unless  they  limit  this  liability  by  provision  therefor  in  the 
charter.! 

§  123.  statutory  Liability  of  Directors. —  With  the  exception 
of  Alabama,  Arizona,  Louisiana,  and  Utah,  all  of  the  Common- 
wealths have  statutes,  either  civil  or  penal,  imposing  liability 
upon  directors  for  certain  designated  acts  of  misfeasance  or 
nonfeasance.  These  statutes  are  diverse  both  in  scope  and  char- 
acter. It  will  only  be  possible  in  this  connection  to  enumerate 
without  discussion  the  several  liabilities  thus  imposed  upon 
directors. 

(1)  For  illegal  declaration  of  dividends.^ 

(2)  For  illegal  withdrawal  of  capital  stock.^ 

(3)  For  making  false  reports,  or  keeping  false  books  of 
account,  or  making  false  representations.* 

1  Van  Pelt  v.  Gardner,  54  Neb.  701  ;  Pittsburg,  etc  R.  R.  Co.  v.  Allegheny  Co., 
75  N.  W.  974.  63  Pa.  St.  1 20. 

2  Such  lial)ility  exi.sts  in  Alaska,  Ar-  "^  Such  liability  exists  in  Alaska,  Cali- 
kansas,  California,  Colorado,  Connecticut,  fornia,  Connecticut,  Georgia,  Idaho,  Iowa, 
Delaware,  District  of  Columbia,  Florida,  Mississippi,  Montana,  Nevada,  New  Jersey, 
Georgia,  Idaho,  Illinois,  Indiana,  Iowa,  New  Mexico,  North  Carolina,  Oklahoma, 
Kansas,  Kentucky,  Maine,  Maryland,  Mas-  Oregon,  South  Dakota,  Washington,  and 
sachusetts.   Michigan,  Minnesota,   Missi.s-  West  Virginia. 

.sippi,      Missouri,      Montana,     Nebraska,  *  Such    liability   exists    in    Delaware, 

Nevada,   New   Hampshire,  New   Mexico,  District  of  Columbia,  Indiana,  Kentucky, 

New  Jer.-ey,  New  York,  North  Carolina,  Montana,  Nevada,  New  Hampshire,  New 

North    Dakota,    Ohio,    Oklahoma,    Ore-  York,  Rhode  Island,  South  Carolina,  Ten- 

gon,  Pennsylvania,   Rhode  Island,  South  nessee,  and  Virginia.     See  Huntington  v. 

Dakota,  Tennessee,  Texas,  Vermont,  Vir-  Attrill,    118   N.    Y.  365;    23  N.   E.  544; 

ginia,  Washington.  West  Virginia,   Wi.s-  Gidding  ?'.  Ilolter,  19  Mont.  263;  48  Pac. 

con.sin,  and   Wvoming.     See  Dykman  v.  8;  Felker  i'.  Company,  148  Mass.  226 ;  19 

Keenev,  160  N.  Y.  677;  54  N.'e.  1090;  N.  E.  225;  Cithers  u.  Clarke,  158  Pa.  St. 

Chamberlain  f.  Company,  118  Mass.  552;  616;   28    Atl.    232;    Thompson    Houston 

174 


CHAP.  V.J    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  123 

(4)  For  failure  to  file  annual  reports.^ 

(5)  For  violation  of  express  statutes.^ 

(6)  For  authorizing  the  contraction  of  debts  in  excess  of  the 
amount  limited  by  law.^ 

(7)  For  contracting  debts  before  statutory  requirements,  such 
as  subscriptions  for  stock,  either  in  whole  or  in  part,  publication 
of  articles,  etc.,  have  been  complied  with.* 

(8)  For  failure  to  file  certificates  as  to  reduction  of  capital 
stock.° 

(9)  For  false  oaths  to  articles  of  incorporation.^ 

(10)  For  making  loans  to  directors.^ 

(11)  For  making  loans  to  stockholders.^ 

(12)  For  loss  of  funds  through  negligence.^ 

(13)  For   failure   to    display   name    or   itemized    accounts  at 
domiciliary  office. ^^ 

(14)  For  failure  to  allow  inspection  of  books.^i 


Electric  Co.  i'.  Murray,  60  N.  J.  L.  20; 
37  Atl.  443. 

1  Such  liability  exists  in  Colorado, 
Michigan,  Montana,  New  Hampshire,  New 
York,  ami  Oklahoma.  See  Garrison  v. 
Howe,  17  N.  Y.  458;  Van  Etten  v.  Eaton, 
19  Mich.  187;  Shanklin  y.  Gray,  111  Cal. 
88  ;  43  Pac.  .399  ;  Cincinnati  Cooperage  Co. 
I'.  O'Keeffe,  1:20  N.  Y.  603;  24  N.  E.  993  ; 
Wallace  v.  Walsh,  12.5  N.  Y.  26  ;  23  N.  E. 
1076  ;  Glenn  ?\alls  Paper  Co.  v.  White,  18 
Hun  (N.  Y.),  214;  Bolen  v.  Crosl)y,  49 
N.  Y.  183  ;  Tabor  i\  Bank,  62  Fed.  383  ;  10 
C.  C.  A.  429 

2  Such  liability  exists  in  Arkansas, 
Idaho,  Indiana,  Kentucky,  Michigan, 
North  Dakota,  and  South  Dakota.  See 
I'attenson  i;.  Stewart,  41  Minn.  84;  42 
N.  W.  926;  Loverin  v.  McLaughlin,  161 
111.  417  ;  44  N.  E.  99;  Clow  v.  Brown,  l.'iO 
Ind.  185;  48  N.  E.  10'',4;  49  N.  E.  10.'}7  ; 
Gunther  v.  Company,  21  Ky.  L.  Hep.  6.").') ; 
52  S.  W.  931. 

'  Such  liability  exists  in  California, 
Illinois,  Idaho,  Mississippi,  Montana,  Now 
Hampshire,  Now  Mexico,  North  Dakota, 
Oklahoma,  Rhode  Island.  TennesHee,  Ver- 
mont, and  Wyoming.  See  Tradesmen 
Pub.  Co.  /•.  Company,  95  Tenn.  634;  32 
S.  W.  1097;  Lewis  v.  Montgomery,  145 
111. 30;  33  N.  E.  880;  Ilomor  i'.  lleuuing, 
93  U.  S.  228. 


*  Such  liability  exi.sts  in  Illinois,  Ohio, 
Vermont,  and  Wisconsiu.  See  Kent  v. 
Clark,  181  111.  237  ;  .54  N.  E.  967;  Clow  v. 
Browu,  150  Ind.  185  ;  48  N.  E.  1034;  49 
N.  E.   1057  ;    Hequembourg  v.   Edward.s, 

155  Mo.  514;  55  S.  W.  490;  Loverin  v. 
McL.aughlin,  161  111.  417  ;  44  N.  E.  99. 

^  Such  liability  exists  in  Indiana,  New 
Jersey,  and  North  Carolina. 

•5  Such  lialiility  exists  in  Massachusetts. 

'^  Such  liability  exists  in  Massachusetts 
and   New  York.     See  Thacher   v.   King, 

156  Mass.  490;  31  N.  E.  648;  Connecticut 
Kiver  Bank  i'.  Eiske,  62  N.  II.  178;  Wit- 
ters v.  Sowles,  31  Fed.  1. 

'  Such  liability  exists  in  District  of 
Columbia,  Mississippi,  Missouri,  New 
Hampshire,  New  York,  Oklahoma,  I\hode 
Island,  and  Tennessee.  Sec  Working- 
men's  Banking  Co.  i'.  Hautonherg,  103 
111.  400;  Bank  f^ommissioncrs  v.  Bank  of 
Buffalo,  0  Paige  (N.  Y.),  497. 

'■'  Sn(di  lialiility  exists  in  Minnesota. 
See  Horn  Silver  Mining  ('o.  v.  liyan,  42 
.Minn.  196;  44  N.  W.  56;  M.  K.  N.  P.ank 
r.  Harper,  61  Minn.  375  ;  63  N.  \V.  1079. 

1"  Sncdi  liability  exists  in  California 
and  New  Jer-icy.  Sec  Eyre  v.  Harmon, 
92  Cal.  580;  28  Pac.  779  ;  Ball  /;.  Toman, 
119  Cal.  35;  51  Pac.  546. 

n  .Such  liability  exists  in  New  Jersey. 


17, 


v^lJl  iNconroivvTiox  and  organization  of  corporations,  [parti. 

(^15)  P\)r  embezzlement  of  ofliccrs.^ 

(IC))  For  failure  to  make  certifieatc  of  payment  of  capital 
stock.- 

(17)  For  making  false  appraisal  as  to  value  of  property  taken 
in  exchange  for  corporate  stock.-^ 

(18)  For  not  producing  list  of  stockholders  at  the  annual 
election  of  directors.'* 

(19)  For  permitting  an  illegal  issue  of  stock  or  bonds.^ 

(20)  For  making  prohibited  transfers  of  property.^ 

(21)  For  issuing  stock  as  full  paid  when  less  than  its  par 
value  is  paid  thereon.'' 

§  124.  Extension  of  Corporate  Existence.  —  In  order  to  extend 
corporate  existence  special  legislative  action  is  necessary.^  In 
nearly  all  of  the  States  statutes  exist  ])roviding  that  for  a  period 
of  three  years  after  the  term  of  existence  limited  by  its  charter 
has  expired,  the  corporation  shall  continue  to  exist  for  the  pur- 
pose of  winding  up  its  affairs.  Express  power  to  extend  cor- 
porate existence  is  granted  in  twenty-five  of  the  Commonwealths.^ 

Where  corporations  arc  permitted  under  their  charter  to  make 
their  term  of  existence  perpetual,  this  right  to  extend  corporate 
existence  is  of  very  little  practical  importance.  As,  however, 
perpetual  existence  is  permitted  in  only  twenty-seven  of  the 
States,  it  is  a  question  of  much  practical  importance  in  the  re- 
mainder. It  has  been  held  by  at  least  one  court  of  excellent 
repute  that  where  the  power  of  amendment  of  the  charter  is 
unlimited,  even  though  it  does  not  refer  specifically  to  the  right 
to  extend  corporate  existence,  it  may  nevertheless  be  used  for 
that  purpose. ^° 

When  so  extended,  it  must  ])ay  an  organization  tax  if  the  law 

1  Such  liability  exists  iu  Colorado,  New  ^  Such  liability  exists  in  North  Dakota 
Mexico,  and  Pennsylvania.  See  Scott  v.  and  New  York.  See  Clow  v.  Brown,  150 
Depeyster,    1    Edw.    Ch.    (N.    Y.)    513;     Ind.  185 ;  48  N.  E.  1034. 

"Wallace  v.  Bank,  89  Tenn.  630 ;  13  S.  W.  <>  Such  liability  exists  in  New  York. 

48  ;  Ouderkirk  v.  Bank,  119  N.  Y.  263  ;  23  "^  Such  liability  exists  in  North  Dakota. 

N.  E.  875.  See  Schley  v.  Dixon,  24  Ga.  273. 

2  Such  liability  exists  in  Colorado,  ^  People  v.  I'fister,  57  Cal.  532 ;  Attor- 
Delaware,  Maryland,  New  Hampshire,  ney-General  v.  I^crkin,  73  Mich.  303; 
North  Carolina,  and  Rliude  Island.  Smith    v.   Company,  58    N.  J.   Eq.   331  ; 

'  Such  liability  exi.sts  in  Connecticut.  43  All.  567;  People  v.  Greene,  116  Mich. 

See  Hequembourg  v.  Edwards,  155   Mo.  505  ;  74  N.  W.  714  ;  Frostberg  Mining  Co. 

514;  56  S.  W.  490;  F.  C.  T.  Co.  v.  Floyd,  v.  Company,  81  Md.  28;  31  Atl.  698. 

47  0.  St.  525;  26  N.  E.  110.  ^  See  Part  III.  Table  8,  page  576. 

*  Such  liability  exists  in  Delaware  and  ^"  Peojde   v.   Greene,    116    Mich.    505; 

New  Jersey.  74  N.  W.  714. 

176 


CHAP,  v.]    LEGISLATIVE  CONTROL  OVER  DOMESTIC  CORPORATIONS.  §  125 

SO  provides,  even  though  existence  is  extended  under  guise  of  an 
amendment. 1 

§  125.  Taxation  of  Domestic  Corporations.  —  Legislative  control 
over  domestic  corporations  is  exercised  by  means  of  the  un- 
questioned right  of  such  legislatures  to  impose  a  tax  upon 
their  organization  and  annually  thereafter  in  the  form  of  a  fran- 
chise tax.  The  latter  may  be  defined  to  be  a  tax  levied  by  the 
State  upon  the  capital  of  a  corporation  in  return  for  the  privilege 
of  exercising  its  corporate  powers  within  the  limits  of  the  State 
levving  such  tax.  On  the  general  subject  of  franchise  tax  the 
New  York  Court  of  Appeals  in  a  recent  case^  spoke  as  follows : 

"The  system  of  taxation  in  this  State  is  so  complicated  as  to 
invite  mistakes  on  the  part  of  those  who  are  called  upon  to  enforce 
the  law.  In  some  instances  the  tax  is  laid  upon  property  and  in 
others  upon  rights  and  privileges  connected  with  the  property. 
There  is  direct  taxation  of  real  estate  and  of  some  personal  property, 
indirect  taxation  of  other  personal  property,  taxation  of  the  capital 
stock  of  corporations  and  of  their  franchises,  taxation  upon  the  riglit 
of  succession  to  the  property  left  by  decedents,  and  the  like.   .  .  . 

"There  is,  first,  an  organization  tax,  payable  to  the  State,  which  is 
imposed  but  once,  and  is  exacted  for  the  privilege  of  becoming  a  cor- 
poration. Next,  there  is  a  tax  upon  the  real  estate  owned  by  the 
corporation  in  this  State,  which  is  assessed  the  same  as  if  it  were 
owned  by  an  individual.  The  personal  property  of  the  corporation 
is  not  directly  taxed,  but  its  capital  stock  and  surplus  after  deduct- 
ing the  assessed  value  of  its  real  estate  and  making  some  other 
deductions,  is  assessed  at  its  actual  value.  Finally,  there  is  a  fran- 
chise tax  on  corporations  which  is  payable  annually  to  the  State, 
'  computed  upon  tlie  basis  of  the  amount  of  its  capital  stock  employed 
witliin  this  State.'  This  is  not  a  tax  upon  property,  although  it  is 
measured  by  the  value  of  property,  but  upon  the  right  of  a  corpora- 
tion to  exist  and  exercise  the  powers  granted  by  its  charter.  These 
forms  of  taxation  do  not  all  rest  upon  the  same  principle.  The 
organization  tax  is  in  the  nature  of  a  license  fee  for  the  right  to 
become  a  corporation.  The  tax  upon  real  estate  is  a  direct  tax  upon 
real  property,  while  the  franchise  tax  is  not  laid  ujuju  property  at 
all,  but  is  imposed  upon  the  corporation  for  the  i)riviU'ge  of  carrying 
on  business  in  this  State  and  exercising  tlie  corporate  franchises 
granted  by  the  State.     The  distinction  between  a  tax  upon  tlie  prop- 

1  Nl.  Lead   Co.  v.  Dickinsou    (X.  J.),  -  Tcoplcrr  nV.  etc.  y.  Kiiif,'lit,  174  N.  Y. 

57  All.  138.  475;  07  N.  E.  05. 

12  ITT 


^  VJl!    INCOPvPORATION  AND  OllGANIZATION   OF  COIirOIlATlOXS.    [PART  I. 

crty  of  a  corporation  and  a  franchise  tax,  although  well  established 
and  of  great  inii)ortauce,  is  easily  overlooked,  as  we  find  from  our 
own  experience." 

With  reference  to  organization  taxes  there  can  be  no  question 
raised  as  to  the  constitutionality  of  such  taxation.^ 

The  constitutionality  of  franchise  taxes  being  inij)()sed  upon 
the  franchise  as  a  species  of  property  is  clearly  within  the  con- 
stitutional powers  of  State  legislatures.^  In  all  of  the  States  and 
Territories,  with  tlic  exception  of  Alaska,  Arkansas,  District  of 
Columbia,  Georgia,  Indian  Territory,  and  Oklahoma,  graduated 
organization  taxes  are  imposed  upon  domestic  corporations. 

With  respect  to  annual  franchise  taxes  these  are  imposed  only 
in  the  States  of  Alabama,  Colorado,  Delaware,  Maine,  Massachu- 
setts, New  Jersey,  New  York,  North  Carolina,  Ohio,  Oregon, 
Pennsylvania,  South  Carolina,  Texas,  Vermont,  Washington,  and 
West  Virginia.  In  Alabama,  Colorado,  ]\Iaine,  North  Carolina, 
Oregon,  South  Carolina,  Texas,  Vermont,  Virginia,  Washington, 
and  West  Virginia  the  tax  is  levied  upon  the  total  amount  of 
authorized  capital  stock,  irrespective  of  the  amount  that  may 
have  been  issued  and  outstanding. 

In  Delawai'C,  jNIassachusetts.  New  Jersey,  and  Ohio  the  tax 
is  graded  according  to  the  amount  of  capital  stock  issued  and 
outstanding.  In  New  York  the  tax  is  determined  largely  by  the 
dividends  on  the  par  value  of  the  amount  of  capital  stock 
authorized.  It  is  also  graded  on  the  amount  of  capital  stock 
employed  within  the  State. 

§  126.  Regulation  of  the  Right  of  Consolidation.  —  To  accomplish 
a  valid  consolidation  of  two  corporations  that  are  organized  under 
the  laws  of  the  same  or  of  different  States,  legislative  authority  is 
necessary.  It  is  not  over-stating  the  matter  to  say  that  legisla- 
tive authority  is  as  necessary  for  the  accomplishment  of  a  valid 
consolidation  of  existing  corporations  as  it  is  to  the  creation  of  a 
corporation  in  the  first  instance.^     Any  attempt,  thercfoi-e,  on  the 

1  United    Horseslioe  Works  v.  Lewis,  ^  Society  for  Savings  v.  Coit,  6  Wall. 

1  Abb.  (U.  S.)  .518;  Fed.  Cas.  No.  14365;  (U.  S.)  594;  Tidewater  Pipe  Line  Co.  v. 

Combined  Saw  &  Planer  Co.  i-.  Flournoy,  Berry,   5.3    N.   J.    L.   212;   21    Atl.    490; 

83  Va.  1029  ;  14  S.  E.  976  ;  State  v.  Rot-  Attorney-General   v.    Hay    State    Mining 

witt,  17  Mont.  41 ;  41  Pac.  1004;  Hughes-  Co.,  99  Mass.  148. 

dale  Mfg.  Co.  v.  Vanner,  12  R.  I.  491  ;  »  Pearce  v.  Company,  22  How.  (U.  S.) 

Jones  V.  Company,  21  Col.  26.3;  40  Pac.  441 ;  A.  L.  &  T.  Co.  v.  Company,  157  111. 

457.                         "  641 ;  42  N.  E.  1.5.3  ;  Cole  v.  Company,  133 


178 


N.  Y.  164;  .30  N.  E.  847. 


CHAP,  v.]  LEGISLATIVE  CONTROL  OVER  DOxMESTIC  CORPORATIONS.  §  126 

part  of  corporations  to  consolidate  in  the  absence  of  any  statute 
permitting  consolidation  will  not  be  recognized  by  the  courts.^ 
Where  power  is  granted  to  corporations  to  consolidate  it  is  usually 
done  by  means  of  a  general  statute.  Such  statutes  exist  in  a 
comparatively  small  number  of  the  Commonwealths,  the  legis- 
latures of  the  remaining  States  evidently  looking  upon  consolida- 
tion as  a  form  of  a  trust  and  therefore  to  be  restricted.^  Some  of 
tlie  statutes  limit  the  right  of  consolidation  to  corporations  of  the 
same  character  or  engaged  in  tiie  same  line  of  business.^  Where 
the  right  to  consolidate  existed  at  the  time  the  corporation  was 
created  it  can  ordinarily  be  affected  by  vote  of  a  majority  of  the 
stockholders  against  the  dissent  of  the  minority.*  However,  in 
the  absence  of  such  authority  conferred  prior  to  the  incorporation 
of  a  company,  it  has  been  held  that  consolidation  cannot  be 
affected  against  the  dissent  of  the  minority  stockholders.^ 

When  it  comes  to  the  matter  of  consolidation,  creditors  have  no 
right  to  intervene  for  the  purpose  of  preventing  such  a  consolida- 
tion providing  the  same  is  undertaken  under  legislative  authority. 
The  remedy  of  creditors  in  such  cases  is  to  proceed  in  equity  with 
a  view  to  subjecting  the  property  of  the  consolidated  corpora- 
tion to  the  payment  of  their  claims.*^  Sometimes,  though  not 
always,  when  a  new  corporation  is  formed  by  the  consolidation 
of  a  domestic  corporation  with  a  foreign  corporation,  it  is  required 
to  pay  an  organization  tax,  at  least  upon  so  much  of  the  capital 
stock  as  is  represented  by  the  capitalization  of  that  of  the  consoli- 
dated domestic  corporation.' 

1  Greenville   Warehouse  Press  Co.  v.  Wis.  13;  Mowrey  v.  Company,  4  Bissell, 

Company,  70  Miss.  069;   13  So.  879.  78;  Fed.  Cas.  No.  9891. 

■•^  See  Part  IIL  Tal)le  9,  paj^e  579.  «  People  r.  Company,  92   N.   Y.   105. 

»  See    In   re    Prospect   Park  &  Coney  See  K.  I.  Hy.  Co.  v.  Moffatt,  75  111.  524; 

Island  Railway  Co.,  07  N.  Y.  371.  N.  I).  Ry.  Co.  r.  Company,  120  Mass.  397. 

*  Sporo    ;;.     Company,    7     Ind.    309;  "^  State  v.  Sherman,  22  O.  St.  411  ;  P. 

Sprague  v.  Company,  90111    174.  Co.  v.  Company,  113  U.  S.  290  ;  A.  &  R. 

<>  Clearwater    v.     Mcredilli,     1     Wall.  A.   L.  Co.  v.  State,  03  Ga.  2183;  rmitra, 

(U.  S.)25;  K.  &  R.  L  Ry.  Co.  r.  Marsli,  17  I'eople  v.  Company,   129    N.  Y.  474;    29 

N.  E.  951. 


170 


^lllT    INCOPvrOUATlON  AND  Oi^GA^^IZATION  OF  CORPORATIONS.    [I'ART  I. 


CHAPTER    VI. 
LEGISLATIVE   CONTROL   OVER  FOREIGN   CORPORATIONS. 

§  127.  Extent  of  Legislative  Power  of  the  various  Commonwealths 
over  Foreign  Corporations.  — A  foreign  corporation  may  bc  defined 
as  one  created  under  the  laws  of  a  State,  Territory,  government, 
or  country  other  than  that  wlicrein  it  seeks  to  do  business.^ 
AVith  some  few  exceptions  nearly  all  of  the  Commonwealths  have 
enacted  statutes  prescribing  the  terms  and  conditions  upon  which 
foreign  corporations  may  carry  on  business  within  their  borders.^ 
Most  of  tlicse  statutes  closely  resemble  each  other  in  character, 
and  generally  look  to  the  attainment  of  the  same  end.  Thus,  for 
example,  in  order  to  give  courts  of  the  foreign  State  jurisdiction 
over  the  foreign  corporation  and  to  secure  proper  protection 
for  such  of  its  citizens  as  may  transact  business  with  the  latter, 
the  statutes  prescribe  that  foreign  corporations  shall  designate 
an  agent  residing  within  the  State  upon  whom  service  of  process 
upon  the  corporation  may  be  served,  and  also  designate  a  place 
of  business  where  it  may  be  found.  Such  provisions  are  unques- 
tionably valid  .2 

Again,  most  of  the  acts  require  that  a  certified  or  sworn  copy 
of  the  charter  of  the  foreign  corporation  shall  be  filed  in  certain 
designated  offices,  usually  witli  the  Secretary  of  State  and  in  the 
local  recording  office  of  the  county  where  its  principal  place  of 
business  is  to  be  located.  The  object  of  sucli  enactment  is  to  fur- 
nish easily  accessible  evidence  of  the  existence  of  the  corporation, 
and  to  protect  parties  dealing  with  it  from  fraud  and  imposition.* 

Still  other  States  require  the  filing  of  reports  enumerating  the 
officers,  giving  information  relative  to  the  business  to  be  trans- 
acted within  the  foreign  State  and  as  to  the  financial  condition 

1  Daly  V.  Company,  G4  In(3.  1.  •*  Evans  r.  Lee,  11  Nev.  194 ;  D  F.  Co. 

2  See'Part  III.  Table  13,  page  583.  v.   Augustine,   5   Wash.  67;  31  Pac.  327; 
«  St.    Clair  v.    Cox,    106    U.    S.   3.56;     Huffman  r.  Company,  13  Tex.    Civ.  Ap. 

Lafayette   Ins.    Co.   v.   French,  18  How.     169;  36  S.  W.  306. 
(U.  S.)  404. 

180 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.    §  127 

of  the  corporation.!  The  right  to  transact  business  in  a  foreign 
State  is  a  matter  of  State  comity,  pure  and  simple.  Tlie  recog- 
nition of  a  foreign  corporation  and  enforcement  of  its  contracts 
in  States  other  than  that  of  its  creation  rests  only  on  comity,  and 
any  conditions  governing  the  right  to  transact  business  outside  of 
the  domiciliary  State  of  the  corporation  may  be  imposed  upon  them 
or  they  may  be  entirely  excluded.^  But  the  conditions  imposed 
must  not  be  repugnant  to  the  Constitution  of  tlie  United  States 
or  to  the  public  policy  of  the  foreign  State  as  evidenced  by  its 
statutory  enactments  and  judicial  decisions,  nor  can  they  be  re- 
pugnant to  rules  of  public  law.^ 

In  this  connection  it  may  be  observed  that  foreign  corporations 
cannot  claim  the  protection  of  the  prohibition  of  the  United  States 
Constitution  against  denying  to  citizens  of  any  State  the  privileges 
and  immunities  of  citizens  of  the  several  States.*  Nor  can  they 
claim  the  benefit  of  the  clause  against  denying  to  any  person  equal 
protection  of  the  law.^ 

A  State  may  preclude  all  foreign  corporations  not  engaged  in- 
interstate  commerce  or  in  the  employ  of  the  general  government 
from  transacting  business  within  its  limits,  and  the  courts  cannot 
in(iuire  into  its  reasons  for  so  doing.^  A  State  may  discriminate 
jjetwecn  foreign  and  domestic  corporations.'^  In  short,  the  power 
of  States  over  foreign  corporations  with  respect  to  imposing  con- 
ditions for  doing  business  are  as  broad  as  those  exercised  over 
domestic  corporations.^  Wherever  a  corporation  transacts  its 
business  it  carries  its  charter  with  it,  and  that  becomes  the  law 
of  its  existence  in  the  foreign  State,  for  the  charter  is  the  same 
abroad  as  it  is  at  home.  Whatever  disabilities  are  placed  uj)on 
the  corporation  at  home  are  ordinarily  equally  binding  upon  it 
abroad,  and  whatever  proper  legislative  control  it  is  subject  to 
must  in  general  be  recognized  and  submitted  to  by  those  who 
deal  with  it  elsewhere.^     The  foregoing  rule  should  be  qualified 

»  Wasliiiiffton  County  Mnt.  Ins.  Co.  r.  «  Doylo    v.   Company,   94    IT.  S.  .541- 

Dawes,  C  Grnv,  .Mass.  376.  Horn  Silver  Mining  Co.  v.  New  York,  14.T 

2  I'anl  V.  Virginia,  8  W.-ill.  (U.  S.)  Ifil.  U.  S.  .314. 

8  Lafavettehm.  Co. »;.  French,  IS  How.  ''  Dncatr.  Chicago,  10  Wall.  (U.S.)  41.5. 

407;  S,  V.  l?y.  Co.  v.  Denton,   146  U.  S.  »  Oriont  In.^.  C...  ;•.   Dnggs,  173  U.  S. 

201  ;  Am.,  etc.  Christian  Union  v.  Yonnt,  566. 

101  U   S.  3.56.  ^  Canada,  otc  Ky.i-.  C.chlicnl,  100  U.  S. 

*  rani  V.  Virpinia,  «  Wall.  (U.  S  )  16«.  .-iOT ;  Isle  Koyalo  L.and  C.rjH.ration  r.  Sec. 

6  V.  C.  S.  M.  &  C.  Co.  V.  I'enn.tylvania,  of  State,  70  Mich.   102 ;  43  N.  W.  14. 
125  U.  S.  181. 

181 


^1-27    INCORPORATION  AND  ORGANIZATION   OF  CORPORATIONS.    [PARTI. 

hv  tlic  statement  tliat  a  foreiiz-n  corj)oration  can  do  no  act  in  a 
foreign  State  whicli  cannot  be  done  through  the  intervention  of. 
a  mere  agent  and  which  is  not  in  contemplation  of  law  the 
direct  act  of  the  corporation  iiself.^ 

Comity  between  States  authorizes  a  corporation  to  exercise  iis 
cliarter  powers  within  any  State,  but  it  does  not  permit  the  exer- 
cise of  a  power  where  the  policy  of  that  State  distinctly  n^arked 
by  legislative  enactments  or  constitutional  provisions  forbids  it.'-^ 
It  has  been  well  said  that  "  no  rule  of  comity  will  allow  one 
State  to  charter  corporations  to  operate  in  another  State  unless 
there  is  willingness  on  the  part  of  the  foreign  State  that  it  should 
be  so.  To  hold  otherwise  would  be  to  say  that  the  right  of  one 
State  by  comity  is  superior  to  the  sovereign  will  of  the  other. 
This  involves  tlic  surrender  of  sovereignty  to  a  rule  of  comity 
and  to  a  matter  of  international  etiquette,  which  no  sovereign 
State  should  for  a  moment  think  of."  ^ 

A  great  deal  of  litigation  has  arisen  through  the  question 
whether  or  not  foreign  corporations  may  exercise  the  same 
powers  in  a  foreign  State  that  their  charter  authorizes  them  to 
exercise  in  the  domestic  State.  It  has  been  held  that  foreign  cor- 
porations cannot  exercise  outside  of  the  domicile  State  powers 
which  their  own  charters  do  not  permit  them  to  exercise  within 
the  State  of  their  origin,  nor  can  they  exercise  powers  in  a  foreign 
State  not  permitted  to  corporations  organized  under  the  laws 
thereof.*  They  cannot,  however,  do  any  acts  which  are  contrary 
to  the  public  policy  of  the  foreign  State.^  Nor  can  they  transact 
business  for  which  domestic  corporations  cannot  be  formed  on 
account  of  statutory  prohibition  thereof.^ 

h\  some  jurisdictions  what  are  termed  ".retaliatory  statutes" 
have  been  enacted.  The  purpose  of  these  statutes  is  to  put  cor- 
l)orations  coming  from  otlier  States  upon  the  same  plane  as 
domestic  corporations  of  that  State  are  placed  wdien  they  seek 
in  turn  to  transact  business  in  the  States  referred  to.'^  Some- 
times the  laws  of  the  foreign  State  expressly  provide  that  foreign 

1  Duke  V.  Taylor,  37  Fla.  641  ;  Dema-  Mich.  U.t;  Clarke  v.  R.  R.  Co.,  50  Fed. 
restr.  Flack,  128  N.Y.  20.5  ;  28N.  E.  64.5;  3.38;  State  v.  Water  Co.,  61  Kau.  563; 
Colwell  V.  Company,  100  U.  S.  55.  People  v.  Howard,  50  Mich.  239. 

2  McDonongh  v.  Murdoch,  15  IIow.  ^  L.  G.  R.  T.  Co.  v.  Commissioners,  6 
(U.  S.)  413.  Kan.  245. 

3  Empire  Mills  v.  Company  (Tex.  Ap.),  «  Empire  Mills  v.  Company  (Tex.  Ap.), 
15  S.  W.  506.                             ■  15  S.  W.  200. 

*  Diamond   Match   Co.  v.  Powers,  51  '  Talbot  v.  Company,  74  Mo.  544. 

182 


CHAP.  YI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS,    §  127 

corporations  shall  have  no  rights  or  privileges  other  than  those 
possessed  by  domestic  corporations  of  the  same  character.  A  fair 
interpretation  of  such  statutes  would  seem  to  be  that  such  foreign 
corporations  shall  have  equal  powers  with  domestic  corporations  of 
a  character  similar  to  their  own.^ 

In  a  recent  case  an  interesting  question  arose  as  to  the  legal 
effect  of  inserting  powers  in  a  charter  to  be  exercised  only  outside 
of  the  State,  such  powers  being  forbidden  by  the  laws  of  the  State 
in  which  the  corporation  was  organized.^  In  this  case  the  Fed- 
eral Court  of  the  State  of  Washington  spoke  as  follows : 

"  It  has  become  a  habit  of  business  men  in  this  country  to  organize 
corporations  in  one  State  to  operate  in  another,  and  presumably 
there  is  some  adv'antage  to  be  gained  thereby,  otherwise  the  practice 
would  not  be  continued.  But  no  sound  reason  has  been  advanced, 
and  none  occurs  to  my  mind,  for  giving  additional  encouragement  to 
the  practice  by  judicially  expanding  the  powers  of  such  corporations 
so  as  to  include  additional  rights  and  powers  to  be  exercised  abroad 
but  not  at  home.  Corporations  organized  under  legislative  statutes 
are  not  endowed  with  the  rights  of  natural  persons  to  do  as  they 
please  except  when  restrained  by  prohibitive  laws.  On  the  contrary, 
the  rule  is  that  they  have  only  such  powers  and  rights  as  the  statutes 
confer,  and  the  enumeration  of  their  powers  implies  the  exclusion  of 
all  others  except  such  subordinate  and  incidental  rights  and  powers 
as  are  essential  to  their  existence  and  the  exercise  of  the  rights  and 
powers  conferred  in  express  terms,  and  the  corporation  can  anake  no 
contracts  and  do  no  acts  other  tlian  permitted  by  the  State  which 
created  it  except  such  as  are  authorized  by  its  charter." 

The  general  rule  is  that  foreign  courts  will  not  interfere  in 
the  internal  management  of  foreign  corporations ;  that  is,  except 
in  the  presence  of  extraordinary  circumstances.''^  In  this  con- 
nection a  distinction  obtains  where  tlie  act  comi)lained  of  affects 
the  party  solely  in  his  capacity  as  stockholder,  for  there  he  must 
seek  redress  of  his  grievance  in  the  courts  of  the  domiciliai-y 
State  of  the  corporation.     I'ut  wlicre  the  act  affects  liis  individual 

1  Pco  sec.  15,  Art.  Xlf.  California  Ton-  =  Seattle  Ga.s  &  Electric  Co.  v.  Citizens' 

stitutirm  ;  ace.  11,  Art.  XV.  Montana  Con-  Light  &  Power  Co.,  12.'i  Fed.  588  ;  125  Feil. 

Btitution.s;  I.  &  M.    B.  Co.  r.  Stone,   174  1001. 

Mo.  1  ;  7;J  S.  VV.  4.5.3  ;  MacGinnis.s  y.  ("oni-  ^  Sidway  v.  Coninany,   101  Frd.  4S1  ; 

pany  (Mont.),  75  Pac.  89  ;  Lowe  i'.  Coin-  Kimball    v.    Company,    157    Mass.    7;    31 

pany,  52  Cal.  60.  N.  E.  C'J7. 

183 


sj  12S   INCOUPORATION  AND  ORGANIZATION  OF  CORPORATIONS.  [PART  I. 

riirlits  he  may  seek  redress  in  any  tribunal  where  jurisdiction 
may  properly  be  acquired.^  Foreign  courts  have  not  the  ])o\ver 
to  forfeit  charters  of  foreign  corporations.^ 

Quo  tvarrauto  is  the  proper  proceeding  to  try  the  right  of  a 
foreign  corporation  to  carry  on  corporate  business  in  a  foreign 
StatL\3 

The  certificate  of  the  Secretary  of  State  authorizing  a  foreign 
corporation  to  transact  business  within  the  State  is  a  franchise 
emanating  from  the  State,  and  cannot  be  gone  behind  or  revoked 
by  any  authority  but  the  State.* 

§  128.  Doctrine  of  State  Comity.  —  What  is  known  as  the 
"  doctrine  of  State  comity  "  is  nothing  more  nor  less  than  a 
recognition  of  the  principle  that  the  right  of  foreign  corporations 
to  engage  in  business  in  a  State  other  than  that  of  their  creation 
depends  solely  on  the  will  of  such  other  State.^ 

AVhile  there  are  exceptions  to  this  rule  they  only  exist  where 
the  corporation  created  by  one  State  rests  its  right  to  enter 
another  and  engage  in  business  therein  upon  the  nature  of  its 
business.  As,  for  instance,  where  it  is  necessarily  an  instrumen- 
tality of  interstate  commerce,  and  its  business  constitutes  such 
commerce,  it  is  therefore  wholly  within  the  paramount  authority 
of  Congress.  In  this  case  the  exceptional  business  is  protected 
against  interference  by  such  authority. 

If  the  power  to  regulate  applies  to  all  the  instances  to  which 
such  commerce  gives  rise,  and  to  all  contracts  which  might  be 
made  in  the  course  of  its  transactions,  that  power  would  embrace 
the  entire  sphere  of  mercantile  activity  in  any  way  connected 
with  the  trade  between  the  States,  and  would  exclude  State  con- 
trol over  many  contracts  purely  domestic  in  their  nature.  The 
power  to  exclude  where  it  exists,  embraces  the  power  as  well  to 
regulate  and  to  enforce  all  legislation  in  regard  to  things  done 
within  the  State  which  may  be  directly  or  incidentally  requisite  in 
order  to  render  the  enforcement  of  the  State  powers  eflficacious 
to  the  fullest  extent,  subject  always  of  course  to  the  paramount 
authority  of  the  United  States.^     Let  us  now  turn  our  attention 

1  N.  S.  C.,  etc.  Co.  V.  Field,  64  Fed.  151 ;  *  State  ex  rel.  v.  Ackerman,  51  O.  St. 

M.  13.    r.   Co.  V.   n.  G.  N.  Co.,  81  N.  Y.  163;  37  N.  E.  828. 

Sup.  302.  5  Hooper  v.  State   of   California,  155 

'■^  Fritts  V.  Palmer,  132  U.  S.  289.  U.  S.  148. 

3  State  V.  Ins.  Co.,  39  Minn.  538;  41  •"'  W.  U.  Tel.  Co.  v.  Mayer,  28  0.  St. 

N.  W.  108.  521. 

184 


CHAP.  YI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  128 

to  the  attitude  maintained  by  the  State  courts  towards  foreign 
corporations. 

One  of  the  familiar  features  of  the  present  day  is  the  organi- 
zation of  corporations  under  the  laws  of  one  State  whose  statutes 
are  particularly  favorable  with  the  intention  of  carrying  on  no 
business  in  the  State  of  its  organization  and  with  the  avowed 
purpose  of  carrying  on  business  in  other  States.  Long  ago 
these  corporations  were  nominated  as  "  tramp  corporations,"  and 
there  was  at  the  outset  some  effort  made  on  the  part  of  the 
courts  to  limit  the  powers  and  question  the  legal  status  of  such 
corporations.  There  was  an  attempt  made  to  induce  the  courts 
to  refuse  to  judicially  recognize  such  corporations,  and  to  hold  their 
stockholders  liable  upon  their  contracts  as  partners  and  upon 
their  torts  as  joint  tortfeasors.^ 

But  the  liberal  policy  of  the  American  States  in  extending 
hospitality  to  foreign  corporations  and  the  powerful  infiucuce  of 
interstate  comity  has  completely  overcome  the  tendency  here 
referred  to,  so  that  at  the  present  day  the  doctrine  is  establisbed 
in  practically  every  State  in  the  Union,  that  each  of  these  States 
will  recognize  as  valid  a  corporation  formed  under  the  laws  of 
another  State  for  the  express  purpose  of  doing  business  outside 
of  the  State  of  its  origin.^ 

The  broader  view  taken  by  the  courts  on  this  question  is  well 
set  forth  by  the  decision  of  the  New  York  Court  of  Appeals  in 
Merrick  v.  Van  Sanvoort.-^  In  this  case  attemj)t  was  made  to 
establish  the  doctrine  that  where  a  Connecticut  corj)oration 
conducts  all  its  business  in  the  State  of  New  York,  it  must 
thereby  be  deemed  to  have  migrated  to  New  York  and  to  have 
forfeited  its  charter,  thus  permitting  creditors  of  the  corjioration 
to  hold  the  members,  olliccrs,  and  agents  of  the  corporation  per- 
sonallv  iiul)lc  for  the  deljts  and  torts  of  the  corporation.  In 
refusing  io  recognize  this  doctrine  the  coni-t  spoke  as  follows: 

"  Hitherto  corporate  enterprise  liris  not  been  trainmollod  by  un- 
friendly legislation.  Xo  jealousy  or  competition  or  rivalry  of  adverse 
interest   has    been    permitted    to  convert    State   lines    into   barriers 

1  Soe  Hill  I.'.  IJc.'icli,   12  N.  J.   Erj.  -'il  ;  2  Seo    Morrick    v.     V.iii    Saiivnort,    3t 

Landgrniit,  etc.  Co.  v.  Coffey  Co.,  6  Kan.     N.  Y.  UOS;  Dem.'ircHt  c.  Fltick,  128  N.  V. 
245;    U'lUt'^omory  V.   Forties,    148   M.i.s.s.     20.')  ;  State  rx  r^/.  w.  Cook  (Mo.),  80  S.  W. 
240;  19   N.  K.  342;  Atterlierry  v.   Kiiox,     929. 
4  B.  Monroe  (Ky,),  90.  ^  34  N.  Y.  208. 

185 


ij  VJS    INTOKPOKATIOX   AND  OUGANIZATIOX  OF  CORPORATIONS.    [PART  I. 

of  obstruction  to  tlio  free  course  of  general  commerce.  Its  avenues 
have  been  open  to  all. 

"  In  this  country  our  individual  interests  arc  so  interwoven  that 
the  union  of  the  States  is  due,  in  its  continuance,  if  not  in  its  origin^ 
as  nuich  to  commercial  as  to  political  necessity.  The  citizens  of  each 
claim  a  birthright  in  the  advantages  and  resources  of  all.  They 
demand  from  their  local  authorities  such  facilities  as  the  law-making 
power  can  afford  in  the  employment  of  labor  and  capital.  They 
claim  such  corporate  franchises  and  immunities  as  may  enable  them 
to  compete  on  equal  terms  with  the  citizens  of  other  States.  For 
these,  with  the  structure  of  our  institutions,  they  naturally  look  to 
their  own  government.  They  acknowledge  a  double  allegiance  in 
their  local  and  federal  relations,  which,  by  general  consent,  carries 
with  it  a  correlative  community  of  rights.  They  may  live  in  an 
inland  State,  but  they  are  none  the  less  citizens  of  a  maritime  nation, 
and  they  may  lawfully  organize  companies  at  home  for  traffic  on 
ocean  highways. 

"A  corporate  charter  is  in  the  nature  of  a  commission  from  the 
State  to  its  citizens,  and  their  successors  in  interest,  whether  at  home 
or  abroad.  Each  government,  in  the  exercise  of  its  own  discretion, 
determines  the  conditions  of  its  grant.  It  is  free  to  impose  or  omit 
territorial  restrictions,  but  it  can  confer  general  powers  to  be  exer- 
cised within  its  bounds  or  without  them,  wherever  the  comity  of 
nations  is  respected.  For  the  purpose  of  commerce  such  a  com- 
mission is  regarded  like  a  government  flag,  as  a  symbol  of  allegiance 
and  authority  ;  and  it  is  entitled  to  recognition  abroad  until  it  forfeits 
a  recognition  at  home.  .  .  . 

".  .  .  We  think  the  policy  of  this  State  is  in  harmony  with  that 
of  the  country,  and  that  it  would  be  neither  provident  nor  just  to 
inaugurate  a  rule  which  would  unsettle  tlie  security  of  corporate 
property  and  rights  and  exclude  others  from  the  enjoyment  here  of 
privileges  which  have  always  been  accorded  abroad.  Our  national 
commerce  is  but  the  aggregate  of  that  of  the  States,  and  every 
needless  restriction  by  the  operation  of  local  laws  is  unjust  and 
calamitous  to  all.  We  suppose  the  rules  of  comity  on  which  we  have 
hitherto  acted  to  be  generally  accepted  and  approved.  We  see  no 
reason  why  a  Southern  State  may  not  grant  to  a  corporation  of  its 
planters  the  right  to  erect  mills  for  the  manufacture  of  their  cotton 
in  New  England ;  nor  why  the  legislature  of  Massachusetts  may  not 
authorize  a  company  of  Lowell  millers  to  raise  cotton  in  South 
America  or  the  Sea  Islands.  The  State  of  Illinois  touches  neither 
the  Atlantic  nor  the  Pacific;  but  if  it  should  organize  a  company 
of  its  citizens  on  the  ocean  with  its  office  in  the  City  of  New  York 
18G 


CHAP.  YI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  128 

and  its  business  conducted  by  managers  elected  annually  in  Chicago, 
the  rights  of  the  corporation  would  be  recognized  wherever  the 
obligations  of  national  law  are  respected." 

Through  the  operation  of  interstate  comity  corporations  or- 
ganized under  the  laws  of  one  State  may  exercise  their  corporate 
powers  outside  of  the  geographical  limits  of  the  State  from  which 
they  have  obtained  their  charter.  The  doctrine  of  the  courts  on 
this  subject  is  well  set  forth  by  the  United  States  Supreme  Court 
in  Cowell  v.  Colorado  Springs  Co.^  as  follows : 

"By  the  general  comity  which,  in  the  absence  of  positive  direction 
to  the  contrary,  obtains  through  the  States  and  Territories  of  the 
United  States,  corporations  created  in  one  State  or  Territory  are  per- 
mitted to  carry  on  any  lawful  business  in  another  State  and  Territory, 
and  to  acquire,  hold,  and  transfer  property  there  equally  as  indi- 
viduals. If  the  policy  of  the  State  or  Territory  does  not  permit  the 
business  of  the  foreign  corporations  in  its  limits  or  allow  the  cor- 
poration to  acquire  or  hold  real  property,  it  must  be  expressed  in 
some  affirmative  way;  it  cannot  be  inferred  from  the  fact  that  its 
legislature  has  made  no  provision  for  the  formation  of  similar  corpo- 
rations or  allows  corporations  to  be  formed  only  by  general  law." 

A  most  instructive  case  in  this  immediate  connection  is  that  of 
Demarest  v.  Flack,'  wherein  the  New  York  Court  of  xVppcals 
observed  that : 

"  The  courts  of  every  State  and  country  recognize  foreign  corpora- 
tions through  what  is  termed  national  or  State  comity.  lUit  whether 
such  recognition  shall  be  given  must  be  decided  by  the  courts  of  the 
country  where  the  corporation  seeks  to  do  business.  In  our  State,  as 
in  others,  it  is  a  question  of  domestic  policy,  and  what  that  policy  is 
must  be  determined  by  an  examination  of  our  own  legislation.  If  we 
find  any  direct  enactment  upon  the  subject,  it  is  our  duty  to  obey  it, 
and  in  its  absence  we  must  determine  the  question  with  reference  to 
our  general  legislation  and  to  the  circumstances  which  surround  us 
as  a  great  and  growing  commercial  community,  having  need  of  and 
employing  large  amouTits  of  combined  capital,  and  for  whose  ])rospority 
and  growtli  it  is  of  the  utmost  importance  that  such  capital  should 
have  the  greatest  facilities  extended  it  for  useful  employment,  with 
reasonable  and  proper  ])ersonal  exemptions  from  liability.  We  can 
find  no  reason  for  a  domestic  policy  that  should  exclude  from  recog- 

1  100  U.  S.  55.  ^  128  N.  Y.  205;  28  N.  E.  645. 

187 


§1-8   INCOUrOUATION   AND  OUliANIZATION  OP  CORPORATIONS.   [I'ART  I. 

nitioii  by  onr  courts  foreign  corporations  generally.  It  may  safely 
be  said  there  can  be  no  such  domestic  policy  at  the  present  day  in 
a  civilized  State.  .  .  . 

"  An  examination  of  our  laws  shows  that  it  is,  and  for  many  years 
has  been,  the  policy  of  this  State  to  enlarge  the  facilities  for  the 
formation  of  corporations.  General  laws  are  on  our  statute  book  for 
the  formation  of  corporations  of  almost  every  conceivable  kind,  and 
under  some  one  of  them  a  corporation  of  the  kind  mentioned  in 
the  case  could  readily  be  formed.  The  freedom  from  personal  liability 
"would  be  as  great  and  could  be  as  easily  attained  under  our  own  as 
under  the  laws  of  West  Virginia.  The  security  of  tlie  creditor  would 
not  be  substantially  greater  in  the  case  of  the  domestic  than  in  that 
of  the  foreign  corporation.  In  the  latter  the  creditor  has  the  remedy 
by  attachment,  and  he  can  obtain  about  as  easy  access  to  its  property 
as  if  it  were  domestic  instead  of  foreign. 

"  There  is  really  nothing  to  evade  by  incorporating  under  a  foreign 
law.  Xo  harmful  results  flow  to  a  creditor  or  to  the  community 
here  by  such  incorporation.  Where  the  corporation  formed  under 
another  jurisdiction  comes  here  to  do  business  of  a  kind  which  we 
permit  to  be  done  by  corporations,  and  where  our  laws  provide  for 
incorporating  individuals  for  the  purpose  of  doing  that  business,  it 
is  difficult  to  see  how  the  terms  '  evasion  '  and  '  fraud'  can  be  ])rop- 
erly  a])plied  to  acts  of  our  citizens  whereby  they  obtain  incorpora- 
tion in  another  State.  When  they  come  in  our  State  to  do  business 
they  must  conform  to  our  laws  relating  to  foreign  corporations  and 
comply  with  the  terms  laid  down  by  us  as  conditions  of  allowing 
them  to  transact  business  here.  In  the  case  of  many  kinds  of  cor- 
porations such  conditions  have  already  been  imposed  by  our  laws, 
and  if  there  be  any  kind  where  none  is  imposed  it  is  conclusive 
evidence  that  up  to  this  time  the  legislature  has  not  thouglit  it 
conducive  to  the  true  interests  of  the  State  and  its  citizens  to  impose 
them.  I  do  not  intimate  that  it  is  necessary  for  a  State  to  expressly 
by  statute  exclude  foreign  corporations  from  acting  within  its  juris- 
diction. The  policy  of  the  State  may  exclude  them,  and  that  policy 
may  be  clearly  established  by  a  reference  to  the  general  legislation 
of  a  State.     I  find  none  such  in  the  laws  of  this  State. 

"It  has  been  urged  that  the  easy  way  which  our  laws  provide  for 
forming  corporations  is  itself  a  reason  why  we  should  not  recognize 
as  a  corporation  those  of  our  own  citizens  who  have  gone  to  another 
State  for  the  purpose  of  incorporating  themselves  under  the  laws 
thereof,  to  do  business  in  onr  own  State  as  such  corporation. 

"  We  think  there  is  very  little  force  in  the  argument.  The  public 
policy  which  we  see  in  our  own  State,  as  evidenced  by  her  laws  upon 
1S8 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS,    §  128 

the  subject  of  the  formation  of  corporations,  is  one  which  looks  to 
their  ready  and  easy  formation  as  a  means  of  transacting  business 
with  an  accumulation  of  capital  and  an  exemption  from  personal 
liability  to  the  largest  extent  consistent  with  reasonable  supervision 
by  the  State.  The  facilities  for  incorporation  offered  by  this  State 
are  not  the  result  of  any  desire  to  promote  the  formation  of  corpora- 
tions here  as  against  their  formation  in  other  States.  They  are 
offered  because  of  a  policy  on  our  part  which  urges  upon  the  State 
the  propriety  of  furnishing  them  as  one  means  of  controlling  the 
business  done  by  them  and  keeping  it  within  our  borders.  If  in  any 
particular  case  it  is  thought  by  those  interested  in  the  matter  that 
the  business  can  be  done  in  our  own  State  and  by  our  own  citizens 
with  greater  facility  under  the  form  of  a  foreign  corporation  tlian 
under  that  of  a  domestic  one,  there  is  no  public  policy  which  forbids 
its  transaction  under  such  form.  The  supervision  of  a  foreign  cor- 
poration by  this  State  may  easily  be  exercised  by  imposing  terms  as 
a  condition  of  permitting  it  to  do  business  here.  The  absence  of 
any  such  terms  in  our  legislation  forms  no  reason  for  refusing  to 
recognize  the  corporation.  The  power  rests  with  the  legislature  to 
say  whether  any,  and  if  so  what,  terms  shall  be  imposed  upon  such 
corporations  as  a  condition  of  granting  them  permission  to  do  business 
here.  Those  terms  can  only  be  imposed  by  the  legislature,  and  in 
their  absence  our  courts  ought  not,  merely  on  that  account,  to  refuse 
to  recognize  a  foreign  corporation.  In  the  absence  of  legislation,  our"- 
courts  must  either  refuse  absolutely,  or  else  they  must  recognize  the 
right  of  such  corporations  to  come  to  this  State  and  do  business  here. 
The  courts  cannot  themselves  impose  terms  or  conditions.  ... 

"  The  truth  is,  foreign  corporations  are  not  properly  to  be  regarded 
with  suspicion,  nor  sliould  unnecessary  restraints  be  imposed  upon 
their  doing  business  in  our  midst.  They  carry  no  black  flag,  and  the 
policy  of  all  civilized  nations  is  to  grant  them  recognition  in  their 
courts.  It  seems  to  me  that  every  reason  which  urges  upon  us  the 
recognition  of  foreign  corporations  organized  with  power  to  do 
business  in  our  State  and  composed  of  citizens  of  the  foreign  State, 
is  equally  potent  when  the  foreign  corporation  is  composed  of  our 
own  citizens.  It  has  always  been  supposed  that  a  State  sliould  at 
least  deal  as  liberally  with  its  own  citizens  as  with  those  of  foreign 
States.  If,  therefore,  we  permit  foreign  citizens  to  come  within  our 
limits  in  the  form  of  a  foreign  corporation  organized  with  power  to 
do  business  here  and  recognized  by  us,  why  should  we  not  permit 
our  own  citizens  to  avail  themselves  of  the  like,  privilege?  If  wo 
impose  terms  and  conditions  upon  foreign  corporations,  as  such, 
doin^'   business  here,   those   same   terms   and    conditions   still   and 

189 


§  120   INCOUrOUATION   AND  OKCANIZATION  OP  CORPOllATIONS.    [PAUT  I. 

equiilly  apph'  to  a  foreign  corporation  wlien  composed  of  our  own 
citizout!.  ^Vlly  should  they  not  be  placed  at  least  upon  an  equality 
with  the  foreign  citizen?"^ 

^  1'20.  What  constitutes  doing  Business  on  the  Part  of  a  Foreign 
Corporation  within  the  State.  —  There  is  perhaps  no  subject  of 
corporation  law  wherein  will  be  found  greater  diversity  in  the 
opinions  of  the  courts  of  the  several  Commonwealths  than  that 
relating-  to  the  rights  of  foreign  corporations.  The  growth  of 
corporate  organization  as  well  as  the  vast  extension  of  the  busi- 
ness of  corporations  outside  of  the  State  of  their  origin  has  made 
the  question  of  determining  what  in  legal  effect  constitutes  doing 
business  on  the  part  of  a  foreign  corporation  in  States  other  than 
that  of  its  domicile  one  of  great  practical  importance.  As  has 
already  been  observed,  parties  may  incorporate  in  one  State  at 
the  ])resent  time  for  the  purpose  of  transacting  their  business  in 
another  Commonwealth.^ 

In  some  of  the  States,  notably  South  Carolina,  the  legislatures 
have  attempted  to  give  a  statutory  definition  as  to  what  constitutes 
doing  business  on  the  part  of  a  foreign  corporation  within  the 
Commonwealth.  In  most  of  the  States,  liowever,  the  question  is 
left  for  judicial  determination.  A  fair  example  of  such  statutes 
is  to  be  found  in  the  New  York  statute  ^  which  provides  that  "  no 
foreign  corporation,  other  than  a  moneyed  corporation,  shall  do 
business  in  the  State  without  having  first  procured"  a  proper 
certificate  from  the  Secretary  of  State  that  it  has  complied  with 
the  statutes  in  such  case  made  and  provided.  From  the  foregoing 
it  will  appear  that  the  whole  question  centres  upon  the  meaning 
of  the  word  "  business  "  as  used  in  the  statutes,  of  wliich  the  fore- 
going is  a  fair  example.  It  will  be  impossible  within  the  limits 
of  this  work  to  discuss  at  any  length  the  conflicting  decisions  of 
the  courts  on  the  point  here  i-eferred  to.  All  that  it  is  proposed 
to  do  is  to  present  certain  rules  which  a  careful  reading  of  the 
authorities  have  shown  to  represent  the  prevailing  and  better 
considered  opinions  of  the  various  courts  on  the  questions  pre- 
sented.    These  rules  may  be  enumerated  as  follows : 

1  See  also  Lancaster  v.  Amsterdam  484;  28  At).  973;  Ilanna  v.  Company, 
Improvement  Co.,  140  N.  Y.  .576 ;  3.5  N.  E.     23  O.  St.  622. 

964.  3  Xew    York    Session   Laws  of    1890, 

2  State  ex  rel.  v.  Cook  (Mo.),  80  S.  W.  chap.  .503,  sec.  1.50;  amended  by  Laws  of 
929;  Oakhill  Mfg.  Co.  c.  Garst,  18  R.  L     1901,  chaps.  96,  538. 


CHAP.  XL]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  129 

(1)  In  order  to  constitute  the  transaction  of  business  by  a 
foreign  corporation  within  the  foreign  State,  it  is  not  indispensa- 
ble that  it  should  do  tlie  greater  part  of  its  business  therein.  If 
it  does  any  part  of  its  ordinary  business  therein  and  the  same 
cannot  properly  be  styled  purely  interstate  commerce,  the  same 
constitutes  the  transaction  of  business  therein  within  the  meaning 
of  the  statute.^ 

(2)  Generally  speaking,  the  making  of  a  single  contract  within 
the  foreign  State  does  not  constitute  the  transaction  of  business 
therein.2    There  must  be  more  or  less  continuity  in  the  matter.    , 

(3)  The  institution  and  prosecution  of  actions  not  arising  out 
of  previous  transactions  had  within  the  foreign  State  does  not 
constitute  the  transaction  of  business  within  the  meaning  of  the 
statute.^ 

(4)  Sales  of  merchandise  by  foreign  trading  corporations  made 
by  means  of  non-resident  travelling  salesmen,  or  by  correspondence 
had  between  the  foreign  corporation  at  the  domiciliary  office  and 
customers  in  the  foreign  State,  or  upon  unsolicited  orders  from 
customers  in  the  foreign  State,  do  not  constitute  transaction  of 
business  within  the  meaning  of  the  statute  regulating  the  trans- 
action of  business  by  foreign  corporations.* 

Aside  from  the  question  of  the  nature  of  the  act,  there  are 
constitutional  grounds  upon  which  it  would  be  held  that  corpora- 
tions were  not,  under  the  circumstances  here  referred  to,  subject 
to  the  statutes  in  such  foreign  State  compelling  foreign  corpora- 
tions to  obtain  a  permit  to  do  business  therein.     The  constitu- 

1  Lamb  v.  Lamb,  G  Diss.  420;  Fed.  Co.,  72  Miss.  809;  17  So.  769;  Kilgore  v. 
Caa.  No.  8018.  Smith,  122  Pa.  St.  48 ;  15  Atl.  698;  Uuited 

2  Cooper   .Mf<r.    Co.  v.  Ferguson,    113     States  c.  Company,  29  Fed.  17. 

U.S.  727;  Gilchrist  V.Helena  II.  S.&  S.  II.  »  Mandel    i'.    Company,    154   lU.   177; 

Co.,  47  Fed.  b'J3  ;   Colorado  Iron  Works  40  N.  E.  462;  Smith  r.  Little,  67  Ind.  549. 

Co.'»^.  Company.   15    Col.  499;    25  Pac.  *  T.  L.   Co.   v.   Holbert,  5  N.   Y.  Ap. 

325  ;  Common wealtli  v.  Standard  Oil  Co.,  Div.  559  ;  Novelty  Mfg.  (^o.  v.  Connell,  88 

101  Pa.  St.  1 19  ;  Florsheim  Co.  r.  Lester,  60  Hun,  254 ;  M.  L  W.  C.  &  S.  Co.  v.  Mosher, 

Ark.  120;  29  S.  W. 34;  Miller !•.  Williams  114  Mich.  64;   72   N.   W.   117;    F.  &  J. 

(Col),  59  Pac.  740  ;   Tabor  v.   Company,  M.  Co.  r.  Foster.  4  Dak.  329  ;  .L  S.  L.  Co. 

II  Col.  419  •  18  Pac.  .537  ;  Creteau  v.  Footo  r.  Chappell,  184  111.  539  ;  56  N.   E.  .539  ; 

Co.,  40  Ap.  Div.  (N.  Y.)  215  ;  Sec.  Co.  i-.  Gale    Mfg.   Co.  v.    Finkelstein,  22    Tex. 

I'anhan.ile    Nat     Bank.    03    Texas,   575  ;  Civ.  Ap.  241  ;  54  S.  W.  619  ;  Toledo  Com- 

57  S.  W.  22  ■  Mi.ssouri  Coal  Mining  Co.  mercial  Co.  v.  Company,  55  ().  St.  21,  ; 

V.   Ladd,  100    Mo.  435;   61   S.   W.    101  ;  Wolff  Dryer  Co.  «.  Higler.  192  Pa.  St.  466  ; 

Paysonf.  Withers,  5  Biss  209;  Fed.  Ca.s.  43   Atl     1002;  Droego  v.  Company,   163 

No.  10S64;   Hope   Mut.  Life  In.s.   Co.   v.  N.  Y.  466  ;  57  N.  L.  747. 
Perkins,  38  N.  Y.  404  :  Hart  v.  Livcrmoro 

191 


^  1-0    INCOUrOKATlON    AND  ORGANIZATION   OF  CORPORATIONS.   [I'ART  I. 

tional  grounds  here  referred  to  have  reference  to  those  trading 
or  quasi-public  cor[)orations  engaged  wholly  in  interstate  trade 
and  oonuneree  and  therefore  not  subject  to  regulatiuu  by  State 
enactments.^  The  same  rule  applies  where  the  corporation  is  in 
the  employ  of  the  general  government.^ 

(5)  Foreign  corporations  may  take  mortgages  by  way  of  in- 
vestment or  as  security,  or  may  take  real  estate  as  security  or 
otherwise  without  coming  within  the  prohibition  of  the  statute, 
provided  such  acts  are  not  within  the  express  purposes  for  which 
such  corporations  were  created,  as  for  example  where  they  are  en- 
gaged in  the  mortgage  loan  or  real  estate  business.^ 

(6)  Foreign  corporations  may  take  property  by  devise  in  for- 
eign jurisdictions,  if  their  charter  authorizes  it,  either  expressly  or 
by  implication,  without  coming  within  the  purview  of  the  statute.* 

(7)  The  mere  fact  that  a  cor[)oration  pays  rent  for  offices  for 
its  agent  employed  to  solicit  orders  in  the  foreign  State  does  not 
in  itself  prove  that  the  corporation  is  transacting  business  witliin 
the  foreign  State.^  The  question  in  all  such  cases  is  whether  it  is 
actually  transacting  business  within  the  foreign  State,  and  not 
whether  some  incident  preliminary  to  the  transaction  of  such 
business  is  to  be  performed  there.^  The  maintenance  of  an  office 
within  the  State  may  be  considered  as  a  circumstance  done  in 
connection  with  others  to  show  that  a  foreign  corporation  is 
transacting  business  in  the  State,  but  it  is  by  no  means  conclu- 
sive of  the  question.'' 

(8)  Where  a  foreign  corporation  consigns  goods  to  persons  in 
a  foreign  State  to  sell,  and  sales  are  made  there  by  the  factor  in 
his  own  name  and  the  proceeds  collected  by  him,  this  does  not 

1  Robbins  v.  Shelby  County  Tax  Dis-  L.  E.  1137;  F.  B.  D.  G.  Co.  v.  Le.ster,  60 
trict,  120    U.  S.  489;'Brennan  v.  Titus-    Ark.  120;  29  S.  W.  34. 

ville,  153  U.  S.  289.  "^  Am.,  etc.  Christian  Union  v.  Yount, 

2  Horn  Silver  Mining  Co.  v.  New  York,  101  U.  S.  352  ;  Santa  Clara  Female  Acad- 
143  U.  S.  305.  emy  i:  Sullivan,  116  111.  375 ;  6  N.  E.  183  ; 

3  C.  U.  A.  Co.  V.  Scammon,  102  111.  46;  Lewi.sburg  Baptist  University  v.  Tucker, 
Bard  i-.  Poole,  12  N.  Y.  495;  A.  M.  L.  I.  Co.  31  W.  Va.  621  ;  8  S.  E.  410 ;  Chamberlain 
r.  Owen,  15  Gray  (Mass.),  491 ;  Black  v.  v.  Chamberlain,  43  N.  Y.  444. 

Colwell,  83  Fed.  880 ;  C.  O.  L.  I.  Co.  v.  ^  reople  ex  rel.  Brewing  Co.  v.  Itoberts, 

Sawyer,  44  Wis.  387;  Fritts  v.  Palmer,  22  N.  Y.  Ap.  Div.  284. 

132  U.  S.  288;  Bank  v.  Sherman,  28  Ore.  ^  Tallapoo.sa  Lumber  Co.  v.  Ilolbert, 

577  ;  43  Pac.  658  ;  Simplex  Dairy  Co.  v.  5  N.  Y.  Ap.  Div.  516. 

Cole,  86  Fed.  739;  Gilchrist  i-.  Company,  ^  People  v.   Comp.any,   175  N.  Y.  76; 

47  Fed.  593 ;  C.  P.  E.  Co.  i-.  Company,  American  Broom  &  Brush  Co.  v.  Addicks, 

152   Mass.  432;    28   N.  E.  300;   Cooper  19  N.  Y.  Misc.  Rep.  36. 
Mfg.  Co.  V.  Ferguson,  113  U.  S.  727;  28 
102 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.    §  129 

constitute  doing  business  within  the  foreign  State  within  the 
meaning  of  the  statute.^ 

(9)  The  renting  of  an  office  in  a  foreign  jurisdiction  in 
charge  of  a  selling  agent  who  distributes  therefrom  samples  to 
customers  and  to  travelling  agents  whose  salaries  are  paid  there- 
from, together  with  the  keeping  of  a  bank  account  in  such  juris- 
diction, does  not  necessarily  constitute  doing  business  within  the 
foreign  State  within  the  meaning  of  the  statute.^ 

Finally,  in  addition  to  the  foregoing  rules,  it  may  not  be  without 
value  in  this  connection  to  call  particular  attention  to  a  few  cases 
which  seem  to  throw  considerable  light  upon  the  general  subject  of 
what  constitutes  the  transaction  of  business  within  a  foreign  State 
within  the  meaning  of  the  Statutes  already  referred  to.  Attention 
is  first  called  to  the  case  of  People  ex  rel.  Kellogg  Paper  Co.  v. 
Roberts.^  Here  an  Illinois  corporation  furnished  printed  matter 
to  local  publishers  in  the  State  of  New  York.  It  kept  solicitors 
in  the  State  of  Xew  York  to  secure  advertising  patronage  for  a 
newspaper  published  by  it  in  Chicago.  For  this  purpose  it  had  an 
office  in  the  State  of  New  York  with  a  manager  and  five  clerks. 
It  also  kept  a  New  York  bank  deposit  from  which  rent  and  sal- 
aries were  paid  amounting  to  an  annual  expense  of  $13,000.  It 
had  office  furniture  in  the  State  of  New  York  valued  at  $700.  It 
was  held  that  the  corporation  had  no  capital  employed  in  the 
State  of  New  York  which  rendered  its  capital  stock  liable  to 
assessment  for  taxation.     The  court  in  its  opinion  stated  : 

"  Office  conveniences  are  permitted  here  to  a  foreign  corporation 
doing  business  in  another  State  to  solicit  orders  to  be  executed  in  the 
other  States  without  liability  to  our  franchise  tax.  In  People  ex  rel. 
Smith  Co.  V.  Roberts,*  the  court  held  that  office  leases,  bank  accounts, 
and  the  keeping  of  samples  within  the  State  by  foreign  corporations 
were  nominally  incidental  to  the  business  of  soliciting  orders  and 
making  sales  whicli  tlie  relator  could  carry  on  in  the  foreign  State  with- 
out being  liable  to  taxation.  It  also  observed  that  the  machinery 
with  which  an  interstate  business  is  carried  on  is  to  some  extent 
erected  within  the  State  and  does  not  make  sucli  business  taxable 
there." 

1  Bertha  Zinc  &  Mining  Co.  v.  Chire,  Ap.  Div.  1.3;  People  ex  rel.  v.  Roberts, 
7  N.  v.  Misc.  Hep.  128.  29  N.  Y.  Ap.  Div.  585. 

2  WashiiiKton  MiU.s  Co.  i;.  Roberts,  8  »  30  N.  Y.  Ap.  I)iv.J50. 
N.  Y.  Ap.  Div.  201  ;  affirmed  in  151  N.  Y.  ■•  27  N.  Y.  Ap.  Div.  455. 
619;  People  ex  Tel.  v.  Roberts,  25  N.  Y. 

1-3  103 


^  129   INCOHPOHATION   AND   ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

In  Yauizhan  ^rachine  Co.  v.  Lighthouso,^  tlic  testimony  showed 
tliat  a  foreign  corporation  had  sold  merchandise  in  New  York 
both  by  agents  and  by  correspondence,  and  in  this  case  it  had  no 
office  within  the  State.  Upon  the  question  whether  this  constituted 
the  transaction  of  business  within  the  State,  the  court  spoke  as 
follows : 

"  The  statute  does  not  intend  to  relate  to  business  conducted  in  the 
manner  just  referred  to.  It  contemplates  a  location,  a  domicile, 
having  an  office  and  the  investment  of  some  part  of  its  capital  within 
the  State.  Orders  can  then  be  transmitted  and  dealings  had  with  it 
at  this  office  and  the  conduct  of  its  business  is  thus  transferred,  in  a 
measure  at  least,  to  the  headquarters  establislied  within  the  territorial 
limits  of  this  State.  It  thus  settles  within  the  State,  and  enjoys  the 
benefits  incident  to  a  domestic  corporation,  and  the  legislature  im- 
poses requirements  and  obligations  upon  it  by  reason  of  the  privi- 
lege conferred  of  doing  business  like  a  body  corporate  organized  in 
this  State.  It  was  never  intended  to  hamper  trade  and  restrict 
interstate  commerce  by  bringing  within  its  ban  every  corporation 
which  happens  to  cross  the  State  boundary  with  its  wares  to  supply 
customers  who  have  ordered  them  from  the  home  office. 

"...  It  must  be  kept  in  mind  that  it  was  not  designed  to  fetter  or 
exclude  business  from  the  State.  Its  aim  was  to  require  a  foreign 
corporation,  which  was  on  a  level  in  its  privileges  with  one  organ- 
ized here,  to  bear  the  burdens  and  be  equally  accessible  to  process 
with  State  corporations.  To  give  it  the  construction  contended  for 
by  the  defendant  would  interfere  with  that  comity  between  the  States 
in  their  trade  relations  which  has  been  potential  in  the  development 
of  our  commercial  and  industrial  business," 

In  Cummer  Lumber  Company  v.  Insurance  Company,^  the  court 

spoke  as  follows ; 

"This statute  —  relative  to  foreign  corporations  obtaining  a  permit 
to  do  business  in  this  State  —  was  siraj^ly  declaratory  of  the  policy  of 
the  State  that  foreign  stock  corporations  should  not  carry  on  any  busi- 
ness in  this  State  which  similar  corporations  organized  under  its  laws 
could  nf)t  lawfully  conduct.  Its  purpose  was  not  to  avoid  contracts, 
but  to  provide  an  effective  supervision  and  control  of  the  business 
proposed  to  be  carried  on  here  by  foreign  corporations,  and  it  is 
absurd  to  contend  that  it  had  no  reference  to  the  facts  established  by 
the  evidence  in  the  case  at  bar." 

1  64  N.  Y.  Ap.  Div.  138.  2  67  N.  Y.  Ap.  Div.  151. 

104 


CHAP.  YI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  130 

Again,  the  court  said: 

"  The  scope  of  the  law  here  under  consideration  is  that  of  merely- 
undertaking  to  rej^ulate  the  business  of  foreign  corporations  so  that 
they  shall  not  do  business  under  more  advantageous  terms  than  those 
allowed  to  corporations  of  this  State.  It  has  no  relation  whatever  to 
the  incidental  contracts  of  a  foreign  corporation  made  with  a  domestic 
corporation,  such  as  the  insurance  of  the  property  of  a  lumber  com- 
pany organized  under  the  laws  of  Florida  and  doing  business  in  that 
State." 

Finally,  attention  is  called  to  People  ex  rel.  Dives  Pelican  Com- 
pany V.  Feitner.i  In  this  case  a  corporation  organized  under  the 
laws  of  the  State  of  Colorado  had  its  principal  place  of  business 
in  the  State  of  New  York  and  had  an  office  in  tlie  City  of  New 
York.  The  New  York  office  was  maintained  for  the  sole  purpose 
of  enabling  the  directors  of  the  corporation  to  meet  in  it  and 
declare  dividends  on  its  stock.  No  goods  of  the  corporation  were 
sent  to  or  sold  in  New  York.  It  had  no  bills  receivable  in  New 
York,  andthe  only  assets  which  it  had  in  that  State  were  office 
furniture  and  money  on  hand  and  in  bank  which  had  been  sent 
from  its  principal  office  to  its  New  York  office  for  the  purpose 
of  paying  dividends.  It  was  held  that  the  corporation  was  not 
doing  business  in  the  State  of  New  York  within  the  meaning  of 
the  statute. 

§  130.  Penalty  for  transacting  Businesa  In  a  Foreign  State 
without  obtaining  a  Permit.  —  The  statutes  of  the  various  States 
differ  materially  with  respect  to  the  penalty  that  attaches  to  the 
transaction  of  business  by  a  foreign  corporation  without  having 
first  complied  with  the  statute  relative  to  obtaining  a  iicrmit  to 
transact  the  same.  The  form  of  penalty  prescribed  usually  takes- 
one  of  five  forms,  to  wit: 

(1)  Suspending  the  right  to  maintain  suits  in  the  courts  of  the 
foreign  State  until  the  statute  has  been  complied  with.  (2)  Stat- 
utes absolutely  prohibiting  the  right  to  bring  suit  on  contracts 
entered  into  in  tlie  foreign  State  before  the  obtaining  of  a  permit 
to  do  business  therein.  (3)  Statutes  providing  that  all  contracts 
made  by  a  foreign  corporation  before  obtaining  a  permit  to  do 
business  in  a  foreign  State  shall  be  absolutely  void.  (4)  Statutes 
providing  penalties  in  certain  designated  amount  for  failure  to 

1  77  N.  Y.  A]>   Div.  189. 

195 


^  130    INCOKrORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

obtain  a  permit  in  a  foreign  State  before  transacting  business 
therein.  (^5)  Statutes  merely  giving  the  right  to  the  State  to 
bring  proceedings  to  oust  or  exclude  foreign  corporations  from 
doing  business  within  the  foreign  State  without  having  first 
obtained  a  permit  so  to  do.  Each  of  the  foregoing  will  now  be 
taken  up  briefly  for  separate  consideration. 

(1)  Sxsjjejiding  the  right  to  maintain  suits  in  the  courts  of  the 
foreign  State  until  the  statute  has  been  complied  ivith.  Such  stat- 
utes do  not  affect  the  validity  of  contracts  previously  made  in  the 
foreign  State  by  a  foreign  corporation,  but  merely  prevent  it 
from  enforcing  the  same  therein  until  it  has  obtained  a  permit  to 
do  business  in  such  State.^ 

(2)  Statutes  absolutely  prohibiting  the  right  to  bring  suit  on 
contracts  entered  into  in  the  foreign  State  before  the  obtaining  of 
a  permit  to  do  business  therein.  Such  statutes  exist  in  New  York 
and  read  as  follows: 

"  No  foreign  corporation  now  doing  business  in  this  State  shall  do 
business  herein  after  December  31st,  1892,  without  having  procured 
such  certificate  from  the  Secretary  of  State  ;  but  any  contract 
previously  made  by  the  corporation  may  be  permitted  and  enforced 
within  the  State  subsequent  to  such  date.  No  foreign  stock  corpora- 
tion doing  business  in  this  State  shall  maintain  any  action  in  this 
State  upon  any  contract  made  by  it  in  this  State  unless  prior  to  the 
making  of  such  contract  it  shall  have  procured  a  certificate." 

In  interpreting  this  provision  of  the  statutes  the  Supreme 
Court,  in  Dunbarton  Flax  Spinning  Co.  v.  Greenwich  and  John- 
sonville  Railway  Company ,2  spoke  as  follows : 

"  Unless  prohibited  by  law,  a  foreign  corporation,  duly  organized, 
can  come  into  this  State  and  exercise  the  legitimate  powers  conferred 
upon  it  and  carry  on  any  business  not  prohibited  by  our  laws  or 
against  public  policy.  The  State  has  the  power,  however,  to  compel 
compliance  with  its  laws  or  to  punish  the  corporation  if  it  does  not 
do  so.  And  the  legislature  can  deny  to  such  corporation  failing  to 
comply  with  its  laws  by  procuring  a  certificate  and  paying  the  license 
fee,  all  recourse  to  its  courts  to  enforce  its  rights  or  to  redress  its 
wrongs.     These    statutes   are,  however,    mere   revenue   regulations, 

1  Goddard  v.  Crefields  Mills,  .75  Fed.  v.  Fowler  Bros.,  163  N.  Y.  580;  57  N.  E, 
818 ;  21  C.  C.  A.  530  ;  Davis  Trovision  Co.     1 108. 

2  87  Ap.  Div.(N.  Y.)  21. 

196 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  130 

compliance  ^vith  which  is  made  necessary  in  order  to  acquire  tlie 
right  to  do  business  here  and  to  enforce  causes  of  action  in  our 
courts. 

"In  Lancaster  v.  A.  I.  Co.^  it  is  said  to  be  the  policy  of  the  State 
to  encourage  foreign  corporations  to  enter  its  boundaries  for  the 
transaction  of  lawful  business,  and  it  is  manifestly  for  the  interest 
of  the  State  that  foreign  capital  should  be  actively  employed  within 
its  borders." 

(3)  Statutes  providing  that  all  contracts  made  hy  a  -foreign  cor- 
poration  before  obtaining  a  jjermit  to  do  business  in  a  foreign  State 
shall  be  absolutely  void.  To  have  the  effect  stated  above  the 
statute  must  in  express  terms  declare  that  contracts  made  by  cor- 
porations which  have  not  complied  with  tlie  statute  relative  to 
obtainin<2:  a  permit  to  do  business  within  a  foreign  State,  shall  be 
absolutely  void.  Where  such  is  the  case,  it  is  entirely  clear  that 
no  action  can  be  maintained  by  the  corporation  thereon  in  such 
foreign  State.^  Such  statutes,  however,  have  no  extra-territorial 
effect. 

In  an  Illinois  case  ^  the  court  spoke  as  follows : 

"To  permit  the  company,  when  they  admit  that  they  have  dis- 
regarded all  these  requirements,  to  recover,  would  be  for  the  courts 
to  disregard  the  clearly  expressed  will  of  the  general  assembly,  and 
to  say  what  it  has  said  shall  be  unlawful  is  and  shall  be  lawful  and 
binding.  To  enforce  the  payment  of  this  note  would  be,  virtually? 
to  repeal  a  plain  enactment  of  the  legislature.  When  the  legislature 
prohibits  an  act,  or  declares  that  it  shall  be  unlawful  to  perform  it, 
every  rule  of  interpretation  must  say  that  the  legislature  intended 
to  interpose  its  power  to  prevent  the  act,  and,  as  one  of  the  means 
of  its  prevention,  that  the  court  shall  hold  it  void.  This  is  as  mani- 
fest as  if  the  statute  had  declared  that  it  should  be  void.  To  hold 
otherwise  would  be  to  give  the  person,  or  corporation,  or  individual 
the  same  rights  in  enforcing  prohibited  contracts  as  the  good  citizen 
who  respects  and  conforms  to  the  law.  To  permit  such  contracts  to 
be  enforced,  if  not  offering  a  premium  to  violate  law,  certainly 
withdraws  a  large  portion  of  the  fear  that  deters  men  from  defying 
the  law.  To  do  so  places  the  person  who  violates  the  law  on  an  equal 
footing  with  those  who  strictly  observe  its  requirements.  That  this 
contract  is  absolutely  void,  as  to  appellee,  we  entertain  no  doubt."* 

1  140  N.  Y.  576,  ."iOl  ;  35  N.  t..  904.  »  C.  M.  II.  A.  Co.  r.  Rosenthal,  55  111.85. 

2  Bunk  of  Louisville  v.  Young,  37  Mo.  *  Soe  .al.^o   McCanna  &  Fra.ser   Co.  v. 
398                                                                       Corapauv,  74  Fed.  597. 

197 


§  131  INTORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

(4)  Statutes  j)rovidi)}g  penaUies  in  certain  dcsif/nated  amounts 
for  failure  to  obtain  a  permit  in  a  foreign  State  before  transacting 
business  therein.  In  this  connection  two  opposing  lines  of  ;iulhor- 
ity  are  to  be  met  with,  one  holding  that  where  a  penalty  is 
imposed,  this  is  exclusive,  but  docs  not  render  the  contract  made 
by  the  foreign  corporation,  out  of  which  the  imposition  of  the 
})enalty  arose,  invalid.^  The  other,  and  what  appears  to  us  the 
better,  view  is  that  although  a  specific  penalty  is  provided,  this  in 
itself  operates  to  render  the  contract,  out  of  which  the  imposition 
of  the  penalty  arose,  illegal  and  unenforceable  in  the  courts  of 
such  foreign  State.^ 

(5)  Statutes  merely  giving  the  right  to  the  State  to  bring  pro- 
ceedings to  oust  or  exclude  foreign  corporations  from  doing  business 
loithin  the  foreign  State  without  having  first  obtained  a  permit  so 
to  do.  Unless  some  other  remedy  is  prescribed  by  statute,  the 
proper  remedy,  in  case  foreign  corporations  engage  unlawfully  in 
business  in  a  foreign  State,  is  for  the  State  to  bring  quo  warranto 
proceedings  to  oust  or  exclude  such  foreign  corporation  from 
doing  business  within  the  foreign  jurisdiction. ^  In  such  proceed- 
ings the  courts  have  the  right  to  review,  if  they  see  fit,  the  action 
of  the  Secretary  of  State  in  issuing  a  permit  to  such  foreign 
corporation  to  do  business  within  the  State.* 

§  131.  License  Tax  on  Foreign  Corporations.  —  There  is  a  clear 
distinction  to  be  observed  of  course  between  the  creation  of  a  cor- 
poration under  State  authority  and  the  licensing  of  a  corporation 
already  existing,  to  do  business  within  the  jurisdiction  of  such 
State.5  Sometimes  the  statute  provides  that  after  foreign  cor- 
porations have  complied  with  certain  formalities  relative  to  obtain- 
ing a  permit  to  do  business  within  a  foreign  State,  they  shall 
thereby  ipso  facto  become  domestic  corporations.  Under  such  a 
statute  it  has  been  held  that  they  thereby  become  for  all  pur- 
poses, except  for  such  matters  as  pertain  to  federal  affairs, 
domestic  corporations  and  not  mere  licensed  corporations.^     It 

1  Clarke  v.  Middleton,  19  Mo.  .54  ;  Gar-  517  ;  60  N.  W.  121 ;  State  v.  Company,  39 
rett  Ford  Co.  v.  Company,  20  R.  I.  189;     Minn.  538;  41  N.  W.  108. 

J.  C.  M.  T.  Co.  V.  Willlioit,  84  Fed.  514.  *  State  v.  Company,  49  0.  St.  440  ;  31 

2  Dudley  y.  Collier,  87  Ala.  431  ;  16  So.  N.  E.  658;  State  v.  Company,  91  Iowa, 
304;  C.  M.'h.  a.  Co.  l:  I{o.senthal,  55  111.     517 ;  60  N.  W.  121. 

85 ;  State  v.  Briggs,  1 1 6  Ind.  55  ;  1 8  N.  E.  *  C.  B.  &  Q.  Ry.  Co.  v.  Ilarri.s,  1 2  Wall. 

395 ;    Buxton  v.   Hamblen,  32    Me.   448 ;  U.  S.  65. 

Stewart  v.  Company,  38  N.  J.  Law,  436.  ^  Debnam  v.  Company,  126  N.  C.  831 ; 

3  State  V.  Company,  47  0.  St.  167  ;  24  36  S.  E.  269. 
N.  E.  392;   State  v.  Company,  91  Iowa, 

108 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  132 

has  been  repeatedly  held  by  the  United  States  Supreme  Court 
that  State  legislatures  may  impose  license  taxes  to  any  amount 
upon  foreign  corporations  as  a  condition  to  the  granting  of  the 
right  of  such  foreign  corporations  to  transact  business  in  a 
foreign  State. ^ 

In  addition  to  the  payment  of  a  tax,  there  are  a  number  of 
other  requirements  in  force  in  the  various  States  differing  one 
from  the  other,  such,  for  example,  as  requiring  the  filing  of  a  copy 
of  the  articles  of  incorporation,  appointing  an  agent  within  the 
State  to  accept  and  receive  service  of  process,  etc.  Such  require- 
ments if  reasonable  are  valid.^ 

The  State  may,  if  it  choose,  tax  without  restriction  as  to  amount 
or  entirely  prohibit  a  foreign  corporation  from  doing  business 
within  the  State,  provided,  however,  it  is  not  engaged  in  interstate 
commerce  or  is  in  the  employ  of  the  general  government.^  Some 
States,  such  for  example  as  Ohio,  New  Jersey,  and  Nevada,  adopt 
what  are  known  as  retaliatory  statutes.  The  purpose  of  such 
statutes  is  to  place  foreign  corporations  which  do  business  in  for- 
eign States  under  the  same  regulations  as  are  imposed  by  the 
domiciliary  State  upon  foreign  corporations  seeking  to  do  business 
within  such  State.* 

The  power  of  a  State  to  exclude  foreign  corporations  from 
transacting  business  within  its  borders  cannot  be  questioned, 
neither  can  its  motives  in  so  doing.^ 

Thirty-three  of  the  States  have  imposed  the  payment  of  license 
taxes  upon  foreign  corporations  desiring  to  do  business  within  the 
foreign  State.*' 

§  132.  Annual  License  Tax  on  Foreign  Corporations.  —  The  right 
of  a  State  to  impose  an  annual  license  tax  on  foreign  corporations 
transacting  business  within  its  borders  is  uuequivocally  estab- 
lished l>y  the  decision  of  the  Supreme  Court  of  the  United  States 

1  Paul  V.  Virginia,  8  Wall.  168;  P.  C.  »  Horn  Silver  Mining  Co.  v.  N.  Y.,  143 
R.  M.  &  N.  Co.  V.  I'ennsylvania,  125  U.  S.  U.  S.  305;  rierce  v.  Peo])le,  lOG  111.  11  ; 
181  ;  Liverpool  Ins.  Vo.  v.  Massachusetts,  State  v.  Phipps,  50  Kan.  G09  ;  31  Pac.  1097. 
10  Wall.  570;  I'cml>ina  Miu.  Co.  y.  Penn-  ■•  State  v.  Keinniund,  45  O.  St.  214; 
B>lvaiiia,  125  U.  S.  184.  13  N.  10.  30  ;  Miles  r.  Wuo.lward,  115  C:il. 

2  Huffman  v.  Company,  13  Tex.  Civ.  .308;  46  Pac.  1076;  State  v.  Company,  39 
Ap.  169  ;  36  S.  W.  .306  ;  k"  &  S.  A.  M.  &  I.  Minn.  538  ;  41  N.  W.  108. 

Co.  I'.    Hardy,  93  Texas,  289;    55  S.   W.  '  Doyle    i-.    Company,   94   U.   S.   535; 

169;  Utley  i;.  Company,  4  Col.  369;  Green     Hartford   Fire  Ins.  Co.  i;.   Kayniond,  70 

V.  Association,  105   Iowa,  628;  15  N.  W.     Mich.  4H5  ;  38  N.  W.  474. 

935  ;    Hamme-   i;     Company,   130    U.    S.  »  See  Part  III.  Table  13,  jingo  583. 

291, 

199 


§  lo2    INCOKPOHATION  AND    ORGANIZATION    OF   CORPORATIONS.   [PARTI. 

ill  Horn  Silver  Mining  Co.  v.  State  of  Now  York.^     Upon  the  sub- 
ject just  reierred  to,  that  court  spoke  as  follows : 

"•  The  right  and  privilege,  or  the  franchise,  as  it  may  be  termed, 
of  being  a  corporation,  is  of  great  value  to  its  members,  and  is  con- 
sidered as  property,  separate  and  distinct  from  the  property  which 
the  corporation  itself  may  acquire.  According  to  the  law  of  most 
States  this  franchise  or  privilege  of  being  a  corporation  is  deemed 
personal  property  and  is  subject  to  separate  taxation.  The  right  of 
the  States  to  thus  tax  it  has  been  recognized  by  this  court  and  the 
State  courts  in  instances  without  number.  It  was  said,  in  Delaware 
Railroad  Tax,'^  that  'the  State  may  impose  taxes  upon  the  cori)oration 
as  an  entity  existing  under  its  laws,  as  well  as  upon  the  capital  stock 
of  the  corporation  or  its  separate  corporate  property.  And  the 
manner  in  which  its  value  shall  be  assessed,  and  the  rate  of  taxation, 
however  arbitrary  or  capricious,  are  mere  matters  of  legislative  dis- 
cretion,' except,  we  may  add,  as  that  discretion  is  controlled  by  the 
Organic  Law  of  the  State.  And,  as  we  there  said  also,  'it  is 
not  for  us  to  suggest  in  any  case  that  a  more  equitable  mode  of 
assessment  or  rate  of  taxation  might  be  adopted  than  the  one  pre- 
scribed by  the  Legislature  of  the  State ;  our  only  concern  is  with 
the  validity  of  the  tax;  all  else  lies  beyond  the  domain  of  our 
jurisdiction.' 

"  The  granting  of  the  rights  and  privileges  which  constitute  the 
franchises  of  a  corporation  being  a  matter  resting  entirely  within  the 
control  of  the  legislature,  to  be  exercised  in  its  good  pleasure,  it  may 
be  accompanied  with  any  such  conditions  as  the  legislature  may 
deem  most  suitable  to  the  public  interests  and  policy.  It  may  impose 
as  a  condition  of  the  grant,  as  well  as,  also,  of  its  continued  exercise, 
the  payment  of  a  specific  sum  to  the  State  each  year,  or  a  portion  of 
the  profits  or  gross  receipts  of  the  corporation,  and  may  prescribe 
such  mode  in  which  the  sum  shall  be  ascertained  as  may  be  deemed 
convenient  and  just.  There  is  no  constitutional  inhibition  against 
the  legislature  adopting  any  mode  to  arrive  at  the  sum  which  it  will 
exact  as  a  condition  of  the  creation  of  the  corporation  or  of  its  con- 
tinued existence.  There  can  be,  therefore,  no  possible  objection  to 
the  validity  of  the  tax  prescribed  by  the  statute  of  New  York,  as  far 
as  it  relates  to  its  own  corporations.  Nor  can  there  be  any  greater 
objection  to  a  similar  tax  upon  a  foreign  corporation  doing  business 
by  its  permission  within  the  State.  As  to  a  foreign  corporation  — 
and  all  corporations  in  States  other  than  the  State  of  its  creation  are 

1  143  U.  S.  305.  2  85  U.  S.  (18  Wall.)  206. 

200 


CHAP.  VI.]   LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.    §132 

deemed  to  be  foreign  corporations  —  it  can  claim  a  right  to  do  business 
in  another  State  to  any  extent,  only  subject  to  the  conditions  imposed 
by  the  laws. 

"This  doctrine  has  been  so  frequently  declared  by  this  court  that  it 
must  be  deemed  no  longer  a  matter  of  discussion,  if  any  question  can 
ever  be  considered  at  rest. 

"  Only  two  exceptions  or  qualifications  have  been  attached  to  it  in 
all  tlie  numerous  adjudications  in  which  the  subject  has  been  con- 
sidered, since  the  judgment  of  this  court  was  announced  more  than 
half  a  century  ago  in  Bank  of  Agusta  v.  Earle.^  One  of  these 
qualifications  is  that  the  State  cannot  exclude  from  its  limits  a 
corporation  engaged  in  interstate  or  foreign  commerce,  established 
by  the  decision  in  Pensacola  Teleg.  Co.  v.  Western  U.  Teleg.  Co.^ 
The  other  limitation  upon  the  power  of  the  State  is,  where  the 
corporation  is  in  the  employ  of  the  general  government,  an  obvious 
exception,  first  stated  we  think  by  the  late  Mr.  Justice  Bradley  iu 
Stockton  V.  Baltimore  &  N".  Y.  R.  Co.^  As  that  learned  justice  said, 
<  If  Congress  should  employ  a  corporation  of  ship-builders  to  con- 
struct a  man  of  war,  they  should  have  the  right  to  purchase  the 
necessary  timber  and  iron  in  any  State  in  the  Union.'  •  And  this 
court,  in  citing  this  passage,  added,  'without  the  permission  and 
against  the  prohibition  of  the  State.'  * 

"  Having  the  absolute  power  of  excluding  the  foreign  corporation, 
the  State  may,  of  course,  impose  such  c(jnditions  upon  permitting  the 
corporation  to  do  business  within  its  limits  as  it  may  judge  expedi- 
ent ;  and  it  may  make  the  grant  or  privilege  dependent  upon  tlie 
payment  of  a  specific  license  tax,  or  a  sum  proportioned  to  the  amount 
of  its  capital.  No  individual  member  of  the  corporation  or  the  cor- 
poration itself  can  call  in  question  the  validity  of  any  exaction  which 
the  State  may  require  for  the  grant  of  its  privileges.  It  does  not 
lie  in  any  foreign  corporation  to  complain  that  it  is  subjected  to  the 
same  law  with  the  domestic  corporation.  The  counsel  for  the  ap- 
pellant objects  that  the  statute  of  New  York  is  to  be  treated  as  a 
tax  law,  and  not  as  a  license  to  the  corporation  for  permission  to  do 
business  in  the  State.  Conceding  such  to  be  the  case,  we  do  not 
perceive  how  it  in  any  respect  affects  the  validity  of  the  tax.  How- 
ever it  may  be  regarded,  it  is  the  condition  upon  which  a  foreign  cor- 
poration can  do  business  in  the  State,  and  in  doing  such  business 
it  puts  itself  und<!r  the  law  of  tlie  State,  however  that  may  be 
cliaracterizeil." 

1  13  Peters  (U.  S.),  519.  ^   IVmt,iii:i  C.n.  S.  Min.  &  Mill.  Co.  v. 

2  r,f,  \]   s.  1.  I'eiin.sylv.'uiia,  1*25  U.  S.  181. 
8  32  i'cd.  Rep.  9. 

201 


§133    INCORPORATION  AND    ORGANIZATION    OP    CORPORATIONS.   [PART  I. 

From  tlie  foregoiiiii"  opinion  it  is  clear  that  it  is  unquestionably 
wiihin  (he  power  of  the  various  State  legislatnres  to  inii)ose  an 
annual  license  tax  upon  foreign  corporations  transacting  business 
within  their  limit.  However,  but  few  of  the  States  have  chosen  thus 
far  to  exercise  this  power.  Alabama,  Colorado,  Massachusetts. 
New  York,  Ohio,  Oregon,  Texas,  Vermont,  Virginia,  Washington, 
and  West  Virginia  are  the  only  States  which  imi)ose  an  annual 
license  tax  upon  foreign  corporations.  In  each  of  these  States  the 
tax  is  a  graduated  one,  the  amount  thereof  depending  either  upon 
the  authorized  capitalization  of  the  corporation,  or  the  amount  of 
the  capital  stock  represented  by  capital  invested  in  the  foreign 
State  where  such  annual  license  tax  is  imposed. 

§  133.  To  what  Extent  is  the  Taxing  Povvrer  of  the  State  vrith 
Reference  to  Domestic  and  Foreign  Corporations  Engaged  in  Inter- 
state Commerce  Limited  by  the  "  Commerce  Clause  "  of  the  Federal 
Constitution  ?  —  The  question  as  to  the  extent  of  the  legislative 
power  of  the  various  State  legislatures  with  reference  to  taxing 
domestic  and  foreign  corporations  must  always  be  arrived  at  by 
giving  due  consideration  to  the  limitations  imposed  upon  this 
power  by  the  provisions  of  what  is  known  as  the  "  Interstate 
Commerce  Clause  of  the  Federal  Constitution."  ^ 

Again,  this  question,  in  order  to  permit  of  intelligent  consider- 
ation, must  be  viewed  from  four  standpoints,  to  wit :  (1)  What 
effect,  if  any,  has  the  Interstate  Commerce  Clause  of  the  Fed- 
eral Constitution  upon  the  right  of  the  several  States  to  impose 
organization  taxes  upon  corporations  engaged  in  interstate  com- 
merce ?  (2)  What  effect,  if  any,  has  the  Interstate  Commerce 
Clause  of  the  Federal  Constitution  upon  the  right  of  the  several 
States  to  impose  franchise  taxes  upon  corporations  engaged  in 
interstate  commerce  ?  (3)  What  effect,  if  any,  has  the  Interstate 
Commerce  Clause  of  the  Federal  Constitution  upon  the  right  of 
the  several  States  to  impose  license  taxes  upon  corporations 
engaged  in  interstate  commerce  ?  (4)  What  effect,  if  any,  has  the 
Interstate  Commerce  Clause  of  the  Federal  Constitution  upon  the 
right  of  the  several  States  to  impose  property  taxes  upon  corpora- 
tions engaged  in  interstate  commerce  ?  Each  of  these  will  now 
be  taken  up  for  separate  consideration. 

(1)  What  effect,  if  any,  has  the  Interstate  Commerce  Clause 
of  the  Federal  Constitution  upon  the  right  of  the  several  States 

^  See  Constitution  of  the  United  States,  Art.  I.  sec.  8,  clause  3. 
202 


CHAP.  VI.J    LEGISLATIVE  CONTROL  OYER  FOREIGN  CORPORATIONS.   §  lo3 

to  impose  organization  taxes  npon  corporations  engaged  in  inter- 
state commerce  ?  The  State  is  said  to  possess  inherent  power  to 
tax  its  corporations.  So  the  State  has  undoubted  power  to  exact 
a  bonus  for  the  granting  of  a  franchise,  payable  in  advance  or  in 
futuro}  A  round  sum  or  an  annual  charge,  with  or  without  ref- 
erence to  capital  stock,  may  be  asked  by  the  legislature  for  such 
a  franchise.^  In  discussing  the  question  of  the  right  of  a  State  to 
impose  a  fee,  a  license  or  a  tax  upon  corporations,  the  Supreme 
Court  of  the  United  States  in  Ashley  v.  Ryan,^  spoke  as  follows : 

"At  the  time  the  articles  were  presented  for  filing,  the  statute 
law  of  the  State  charged  the  parties  with  notice  that  the  benefits 
which  it  was  sought  to  procure  could  not  be  obtained  without  pay- 
ment of  the  tax  for  consolidation  which  the  Secretary  of  State 
exacted.  As  it  was  within  the  discretion  of  the  State  to  withhold  or 
grant  the  privilege  of  exercising  corporate  existence,  it  was  as  a  neces- 
sary resultant  also  within  its  power  to  impose  whatever  conditions 
it  might  deem  fit  as  prerequisite  to  corporate  life.  The  act  of  filing, 
constituting,  as  it  did,  a  claim  of  a  right  to  the  franchise  granted  by 
the  State  law,  carried  with  it  a  voluntary  assumption  of  any  bur-i 
den  with  which  the  privilege  was  accompanied,  and  withoiit  which 
the  right  of  corporate  existence  could  not  have  been  procured. 
Having  thus  accepted  the  act  of  grace  of  the  State  and  taken  the 
advantages  which  sprang  from  it,  the  corporation  cannot  be  per- 
mitted to  hold  on  to  the  privilege  or  right  granted  and  at  the  same 
time  repudiate  the  condition  by  the  performance  of  which  it  could 
alone  obtain  the  privilege  which  it  sought.  That  the  right  to  be  a 
State  corporation  depends  solely  upon  the  grace  of  the  State  and  is 
not  a  right  inherent  in  the  parties,  is  settled. 

"...  It  follows  from  these  principles  that  a  State  in  granting  a 
corporate  privilege  to  its  own  citizens,  or,  what  is  equivalent  thereto, 
in  permitting  a  foreign  corporation  to  become  one  of  the  constituent 
elements  of  a  consolidated  corporation  organized  under  its  laws,  may 
impose  such  conditions  as  it  deems  proper,  and  that  the  accoptance 
of  the  franchise  in  either  case  implies  a  submission  to  tlie  conditions 
without  which  the  franchise  could  not  have  been  obtained." 

TIk;  li^dit  of  the  State  to  impose  such  taxes  u|iiiii  tho  organiza- 
tion of  a  corporation  is  in  no  wise  affected  by  the  Intei'statc  Com- 
merce Clause  of  the  Federal  Constitution  ;  this,  too,  even  wlien 

1  B.  &  O.  R.  R.  Co.  V.  Maryland,  88  *  Gordon  i>.  Apjical  Tax  Court,  3  IIow. 

U.  S.  456.  (U.  S.)  1.14. 

8  153  U.  S.  436 

203 


§l:">o    INCOUrORATION  AND    ORGANIZATION    OF    CORPORATIONS.    [ PART  I. 

tlic  corporation  is  formed  for  the  express  ])iir})osc  of  engaging  in 
interstate  coniniercc.  In  the  words  of  the  United  States  Supreme 
Court,  '"  the  right  and  privilege  of  being  a  corporation  is  of  great 
value  to  its  members,  as  it  is  considered  as  property  separate  and 
distinct  from  the  property  which  the  corporation  may  acquire. 
According  to  the  law  of  most  States  this  franchise,  or  privilege  of 
being  a  corporation,  is  deemed  personal  property  and  is  subject  to 
separate  taxation.  The  right  of  the  State  to  thus  tax  it  has  been 
recognized  by  this  court  and  the  State  courts  in  instances  without 
number."  ^ 

(2)  What  effect,  if  any,  has  the  Interstate  Commerce  Clause 
of  the  Federal  Constitution  upon  the  right  of  the  several  States 
to  impose  francliise  taxes  upon  corporations  engaged  in  interstate 
commerce  ?  Again,  attention  is  here  called  to  the  decisions  of 
the  United  States  Supreme  Court  relative  to  the  exercise  of  the 
power  in  (]uestion.  "  The  granting  of  the  rights  and  privileges," 
observes  that  tribunal,  "  which  constitute  the  franchises  of  a  cor- 
poration, being  a  matter  resting  entirely  within  the  control  of  the 
legislature,  to  be  exercised  in  its  good  pleasure,  it  may  be  accom- 
panied with  any  such  conditions  as  the  legislature  may  deem  most 
suitable  to  the  public  interests  and  policy.  It  may  impose  as  a 
condition  of  the  grant  as  well  as  also  of  its  continued  exercise, 
the  payment  of  a  specific  sum  to  the  State  each  year,  or  a  portion 
of  the  profits  or  gross  receipts  of  the  corporation,  and  may  pre- 
scribe such  mode  in  which  the  sum  shall  be  ascertained  as  may 
be  deemed  convenient  and  just.  There  is  no  constitutional  inhi- 
bition against  the  legislature  adopting  any  mode  to  arrive  at  the 
sum  which  it  will  exact  as  a  condition  of  the  creation  of  the 
corporation  or  of  its  continued  existence.  There  can  be,  there- 
fore, no  possible  objection  to  the  validity  of  the  tax  prescribed 
by  the  statutes  of  any  State  so  far  as  it  relates  to  its  own  corpora- 
tions, nor  can  there  be  any  greater  objection  to  a  similar  tax 
upon  a  foreign  corporation  doing  business  by  its  pei-mission 
within  the  State.  As  to  a  foreign  corporation,  it  can  claim  a 
right  to  do  business  in  another  State  to  any  extent  only  subject  to 
the  conditions  imposed  by  its  statutes.  Only  two  exceptions  or 
qualifications  have  been  attached  to  the  foregoing,  to  wit:  One  is 
that  the  State  cannot  exclude  from  its  limits  a  corporation  en- 

1  Horn  Silver  Mining  Co. !;.  New  York,  York,  134  U.  S.  594;  Delaware  R.  R. 
143  U.  S.  305 ;    Home  Ins.  Co.  v.  New     Tax,  85  U.  S.  206. 

204 


CHAP.  YI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  133 

gaged  in  interstate  or  foreign  commerce.  The  other  limitation  is 
that  where  the  corporation  is  in  the  employ  of  the  government. 
Having  the  absolute  power  to  exclude  the  foreign  corporation,  the 
State  may  of  course  impose  such  conditions  upon  permitting  the 
corporation  to  do  business  within  its  limits  as  it  may  judge  expe- 
dient ;  and  it  may  make  the  grant  or  privilege  dependent  upon 
the  payment  of  a  specific  license  tax  or  a  sum  proportioned  to  the 
amount  of  its  capital.  No  individual  member  of  the  corporation 
or  the  corporation  itself  can  call  in  question  the  validity  of  any 
exaction  which  the  State  may  require  for  the  grant  of  its  priv- 
ileges. It  does  not  lie  in  any  foreign  corporation  to  complain  that 
it  is  subjected  to  the  same  law  with  the  domestic  corporation."  ^ 

In  a  certain  sense  the  imposition  of  an  organization  tax  is  as 
much  the  levying  of  a  franchise  tax  as  the  imposition  by  a  State 
of  annual  taxes  upon  corporations  in  return  for  the  right  to  exer- 
cise their  corporate  powers  within  the  jurisdiction  of  the  State. 
The  one  has  been  defined  to  be  a  "franchise  to  be,''  and  the  other 
as  a  "  franchise  to  do."  ^ 

(3)  What  effect,  if  any,  has  the  Interstate  Commerce  Clause 
of  the  Federal  Constitution  upon  the  right  of  the  several  States 
to  impose  license  taxes  upon  corporations  engaged  in  interstate 
commerce?  Strictly  speaking,  the  imposition  of  a  franchise  tax 
has  reference  only  to  domestic  corporations,  while  license  taxes, 
when  applied  to  corporations,  have  reference  not  only  to  domestic 
corporations,  but  to  foreign  corporations  as  well.  Foreign  cor- 
porations, as  such,  can  be  taxed  by  foreign  States  only  upon 
corporate  property  situated  within  such  foreign  State,  or  upon  the 
business  done  there.  They  cannot  be  taxed  in  a  foreign  State  on 
account  of  their  corporate  franchises,  as  that  was  not  given  by 
the  laws  of  the  foreign  State  but  was  dci)endent  upon  the  laws  of 
the  State  of  its  creation  and  had  an  existence  separate  therefrom. 
A  corporation  may,  through  its  agents,  extend  its  operations  into 
other  States,  and  thus,  metaphorically  speaking,  go  there;  but  it 
never  really  travels,  and  its  franchises  exist  only  at  the  place  of 
its  domicile  and  residence.^ 

1  Horn  Silver  Mining  Co.  f.  New  York,  Tax  Cases,  92  U.  S.  603;  California  v. 
143  U.  S.  305.  Company,  127  U.  S.  1  ;  Society  for  Savings 

2  Adams  Kxpress  Co.  v.  Ohio,  166  i-.  Coite.  6  Wall.  606;  Maine  r.  Hy.  Co., 
V.  S.  221  ;   Home  Insurance  Co.  v.  New  142  U.  S  227. 

York,  1.34  U.  S.  600;   Heading  R.  K.  v.  »  People  r.  Equitable  Trust  Co.,  96  N.  Y. 

Pennsylvania,  1.')  Wall,  296;  State  K.  H.     387;   Plimpton  v.  Bigelow,  93  N.  Y.  592. 

205 


§133   INCORPORATION  AND    ORGANIZATION    OF   CORPORATIONS.   [PART  I, 

On  the  other  hand,  there  is  clear  distinction  between  a  license 
tax  and  a  property  tax.  The  former  involves  a  charge  for 
permission  or  authority  to  transact  certain  business,  while  the 
latter,  wlien  applied  to  corporations,  is  a  contribution  imposed 
upon  and  measured  by  the  property  of  the  corporation. ^ 

The  right  to  impose  a  license  tax  upon  corporations  is  subject 
to  the  following  limitation :  If  the  tax  is  essentially  a  regulation 
of  interstate  commerce  and  its  imposition  docs  not  constitute 
a  proper  exercise  of  tlie  police  power  of  the  State,  then  it  comes 
within  the  inhibition  of  the  Interstate  Commerce  Clause  of  the 
Federal  Constitution.^ 

Again,  in  Pembina  Consolidated  Silver  Mining  &  Milling  Co. 
V.  Pennsylvania,^  the  United  States  Supreme  Court  spoke  as 
follows : 

"  The  exaction  of  a  license  fee  to  enable  the  corporation  to  have  an 
office  for  the  transaction  of  its  business  within  a  foreign  State  is 
clearly  within  the  competency  of  the  legislature  of  that  State.  The 
recognition  of  the  foreign  corporation's  existence  in  a  foreign  State, 
even  to  the  extent  of  allowing  it  to  have  an  office  within  its  limits 
for  the  use  of  its  officers,  agents,  and  employees,  was  a  matter  de- 
pendent upon  the  will  of  the  State.  It  could  make  the  grant  of  the 
privilege  conditional  upon  payment  of  a  license  tax  and  fix  the  same 
according  to  the  amount  of  the  authorized  capital  of  the  corporation. 
The  absolute  power  of  exclusion  includes  the  right  of  a  conditional 
and  restricted  exercise  of  its  corporate  powers  within  the  State. 
The  equal  protection  of  the  laws  which  these  bodies  may  claim  is  only 
such  as  is  accorded  to  similar  associations  within  the  jurisdiction  of 
the  State.  -  The  plaintiff  in  error  is  not  a  corporation  within  the 
jurisdiction  of  Pennsylvania.  The  office  it  hires  is  within  such  juris- 
diction, and  on  condition  that  it  pays  the  required  license  tax  it  can 
claim  the  same  protection  in  the  use  of  the  office  that  any  other  cor- 
poration having  a  similar  office  may  claim.  It  would  then  have  the 
equal  protection  of  the  law  so  far  as  it  had  anything  within  the 
jurisdiction  of  the  State,  and  the  constitutional  amendment  requires 
nothing  more.  The  State  is  not  prohibited  from  discriminating  in 
the  privileges  it  may  grant  to  foreign  corporations  as  a  condition  of 
their  doing  business  or  hiring  offices  within  its  limits,  provided 
always  such  discrimination  does  not  interfere  with  any  transaction 

1  Cooley  on  Taxation,  2nd  ed.  pp.  383,         ^  People  ex  rel.  Pennsylvania  H.  R.  v. 

576;   Welton  v.  Missouri,  91   U.  S.  275;  Wemple,  138  N.  Y.  1. 
Emert  v.  Missouri,  156  U.  S.  296.  ^  125  U.  S.  181. 

206 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  133 

by  such  corporations  of  interstate  or  foreign  commerce.  It  is  not 
every  corporation  lawful  in  the  State  of  its  creation  that  other  States 
may  be  willing  to  admit  within  their  jurisdiction  or  consent  that  it 
have  offices  in  them;  such,  for  example,  as  a  corporation  for  lotteries. 
And  even  where  the  business  of  a  foreign  corporation  is  not  unlawful 
in  other  States  the  latter  may  wish  to  limit  the  number  of  such  cor- 
porations or  to  siibject  their  business  to  such  control  as  would  be  in 
accordance  with  the  policy  governing  domestic  corporations  of  a 
similar  character.  The  States  may  therefore  require  for  the  admis- 
sion within  their  limits  of  the  corporations  of  other  States,  or  of  any 
number  of  them,  such  conditions  as  they  may  choose,  without  acting 
in  conflict  with  the  concluding  provision  of  the  first  section  of  the 
Fourteenth  Amendment. 

*'  The  only  limitation  upon  this  power  of  the  State  to  exclude  a 
foreign  corporation  from  doing  business  within  its  limits,  or  hiring 
offices  for  that  purpose,  or  to  exact  conditions  for  allowing  the  cor- 
poration to  do  business  or  hire  offices  there,  arises  where  the  cor- 
poration is  in  the  employ  of  the  Federal  Government,  or  where  its 
business  is  strictly  commerce,  interstate  or  foreign.  The  control  of 
such  commerce,  being  in  the  Federal  Government,  is  not  to  be 
restricted  by  State  authority." 

In  Waters  Pierce  Oil  Co.  v.  Texas  ^  it  was  said  that : 

"  Having  no  absolute  right  of  recognition  in  other  States,  but  de- 
pending for  such  recognition  and  enforcement  of  its  contracts  upon 
their  assent,  it  follows,  as  a  matter  of  course,  that  such  assent  may 
be  granted  upon  such  terras  and  conditions  as  those  States  may 
think  proper  to  impose.  They  may  exclude  the  foreign  corporation 
entirely;  they  may  restrict  its  business  to  particular  localities,  or 
they  may  exact  such  security  for  the  performance  of  its  contracts 
with  their  citizens  as  in  their  judgment  will  best  promote  the  public 
interest.     The  whole  matter  rests  in  their  discretion." 

In  IToopcr  v.  California,^  conditions  imposed  ujion  a  foreign 
corporation  were  CDnsiderod,  and  a  statute  was  sustained,  making 
it  a  misdemeanor  for  a  pei'son  in  Califoi'nia  to  ju'ocure  insurance 
for  a  resident  in  that  State  from  an  insurance  comjiaiiy  not  incor- 
porated under  its  laws,  and  wliicli  Iiad  not  tiled  a  bi»nd  i-e(|uiied 
by  the  law  of  the  State.  All  precedincr  cases  were  cited,  and  it 
was  assumed  as  settled  "that  tiic  ri<rlit  of  a  foicign  corporation  to 
engage  in  business  within  a  State  other  than  that  of  its  creation, 

1  177  U.  S.  28.  2  155  U.  8.  648 ;  39  L.  Ed.  297. 

207 


^  loo    INCORPORATION   AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

dopeiuls  solely  upon  the  will  of  such  other  State."  And  the  cx- 
eoption  to  the  rule  was  stated  to  be  "  only  cases  where  a  corpora- 
tion created  by  one  State  rests  its  right  to  enter  another  and 
to  engage  in  business  therein  upon  the  federal  nature  of  its 
business." 

A  State  may  tax  the  franchise  of  a  domestic  corporation  or 
impose  a  license  tax  upon  a  foreign  corporation,  but  can  only 
subject  a  corporation  engaged  in  interstate  commerce  or  in  the 
employ  of  the  general  government  to  such  property  taxation  as 
only  incidentally  affects  its  occupation,  as  all  business,  whether  of 
individuals  or  corporations,  is  affected  by  common  governmental 
burdens.^ 

The  power  to  license  is  a  police  power,  although  it  may  be  exer- 
cised for  the  purpose  of  raising  revenue.^  But  the  State  in  the 
exercise  of  the  police  power  cannot  impede  interstate  commerce 
by  discriminating  taxes.^ 

The  question  next  arises  as  to  what  constitutes  a  proper  exer- 
cise of  the  police  power  on  the  part  of  a  State.  A  State  may  law- 
fully in  the  exercise  of  this  power  provide  for  security  of  lives, 
limbs,  health,  and  comfort  of  persons  and  protection  of  property, 
or  in  regulation  of  highways,  canals,  railways,  and  other  commer- 
cial facilities,  passage  of  laws  to  regulate  sale  of  articles  deemed 
injurious  to  health  or  morals  of  community  ;  imposition  of  taxes 
on  persons  residing  within  the  State  and  upon  occupations  pursued 
therein,  not  directly  connected  with  foreign  or  interstate  com- 
merce or  with  some  other  business  exercised  under  authority  of 
the  United  States  and  imposition  of  taxes  upon  all  property 
within  the  State  mingled  with  and  forming  part  of  the  great  mass 
of  property  therein.* 

(4)  "What  eiTect,  if  any,  has  the  interstate  commerce  clause  of 
the  Federal  Constitution  upon  the  right  of  the  several  States  to 
impose  property  taxes  upon  corporations  engaged  in  interstate 
commerce  ? 

1  Postal  Telegraph  Co.  v.  Adams,  155  576  ;  Philadelphia,  etc.  Ass'n  v.  New  York, 
U.  S.  696.  1 19  U.  S.  1 19  ;  Horn  Silver  Mining  Co.  v. 

2  Wiggins  Co.  V.  East  St.  Louis,  107  New  York,  143  U.  S.  305;  Postal,  etc. 
U.  S.  374.  Cable  Co.  v.  Charleston,   153  U.  S.  693; 

8  Austin  V.  Tennessee,  179  U.  S.  344;  Martin  v.  R.  R.,  151  U.  S.  677;  Hooper  v. 

License  Cases,  5  How.  (U.  S.)  592.  California,    155  U.   S.    652;    Bonman   v. 

*  Robbing    v.    Shelby    Co.    Tax    Dis-  Railway,  125  U.  S.  491;  Smith  r.  Alabama, 

trict,  120  U.  S.  493.     See  also  Liverpool  124  U.  S.  474. 
Ins.  Co.  V.  Massachusetts,  10  Wall.  (U.  S.) 
208 


CHAP.  VI.]  LEGISLATIVE  CONTROL  OVER  FOREIGN  CORPORATIONS.  §  133 

A  State  may  tax  corporations  for  their  privileges  within  the 
State  in  lieu  of  all  other  taxes,  provided  the  amount  is  made 
dependent  on  the  value  of  its  property  within  the  State  and  pay- 
ment is  not  a  condition  precedent  to  the  right  to  carry  on  its 
business.  The  tax  then  becomes  a  mere  property  tax  and  not  an 
interference  with  interstate  commerce. ^ 

The  existence  of  federal  supervision  over  interstate  commerce 
is  not  inconsistent  with  the  power  of  the  State  to  control  its 
internal  commerce  and  to  tax  franchises,  property,  or  business  of 
domestic  corporations  engaged  in  such  commerce,  nor  with  power 
to  tax  foreign  corporations  on  property  within  the  State.^  In  this 
connection  it  has  been  well  said  that 

"commerce  between  the  States  consists  of  intercourse  and  traffic 
between  their  citizens  and  includes  the  transportation  of  persons  and 
propert}^,  and  the  navigation  of  public  waters  for  that  purpose  as 
well  as  the  purchase,  sale,  and  exchange  of  commodities.  It  makes 
no  difference  whether  such  commerce  is  carried  on  by  individuals  or 
by  corporations.  It  is  true  that  the  property  of  corporations  engaged 
in  foreign  or  interstate  commerce,  as  well  as  the  property  of  cor- 
porations engaged  in  other  business,  is  subject  to  State  taxation, 
provided  always  it  is  within  the  jurisdiction  of  the  State.  "Where 
there  is  jurisdiction  on  the  part  of  the  State  neither  as  to  persons 
nor  property,  the  imposition  of  a  tax  is  unconstitutional  and  void. 
If  the  legislature  of  a  State  enacted  that  the  citizens  of  another 
State  or  country  should  be  taxed  in  the  same  manner  as  the  persons 
within  its  own  limits,  and  subject  to  its  authority  or  in  any  other 
manner  whatsoever,  such  a  law  would  be  as  much  a  nullity  as  if  in 
conflict  with  the  most  explicit  constitutional  inhibition.  Jurisdiction 
is  as  necessary  to  valid  legislative  as  to  valid  judicial  action.  It  has 
been  repeatedly  decided,  and  is  settled  law,  that  a  tax  upon  the  capital 
stock  of  a  corporation  is  a  tax  upon  its  property  and  assets  ;  that  it 
is  undoubtedly  co'mpetent  for  the  legislature  to  lay  a  francliise  or 
license  tax  upon  foreign  corporations  for  the  privilege  of  doing  busi- 
ness within  the  State,  but  that  such  a  tax  is  in  no  sense  a  license  tax. 
It  is  a  fundamental  principle  that  in  order  to  tax  the  corporation  it 
must  have  a  domicihi  witliin  the  State;  that  when  it  is  sought  to  tax 
capital  stock  of  a  corporation,  the  law  imposing  such  a  tax  must  be 
construed  to  mean  so  much  of  the  capital  stock  as  is  measured  by  the 
property  actually  brought  within  the  State  by  the  corporation  in  the 
transaction  of  its  business.  To  the  States  must  be  conceded  power 
1  rostal  Tel.  Co.  v.  A<lanis,  155  U.  S.  ^  Krie    R.    R.    r.    Penns.vlvanift,     158 

6'j6.  ^-  S-  *■■'"• 

14  209 


§  loo   INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS.    [PART  I. 

to  exclude  foreign  corporations  altogether  from  its  borders  or  to 
impose  a  license  tax  so  heavy  as  to  amount  to  the  same  thing.  They 
must  be  denied  the  power  to  tax  either  persons  or  property  not 
within  their  jurisdiction,"  ^ 

1  GlouccstorFerryCo.  i;.  rennsylvauia,  136    U.    S.    120;    Ashley    v.    Ryan,    153 

114  U.  S.  196.    See  also  IMiiladolpliia,  etc.  U.   S.  446;  Erie    H.  R.  v.  Peuusylvania 

Steamship  Co.  v.  reuusylvania,  122  U.  S.  158  U.S.  437  ;  New  York  State  v.  Roberts, 

345  ;   Norfolk,  etc.  R.  ^.  v.  rennsylvania,  171  U.  S.  665. 


210 


PART  II. 

SYNOPSIS-DIGEST  OF  THE  INCORPORATION 
ACTS  OF  THE  SEVERAL  STATES  AND  TER- 
RITORIES  OF   THE   UNITED   STATES. 


ALABAMA. 

(The  references  are  to  the  Session  Laws  of  1903,  chap.  395,  where  not  otherwise  stated.) 
1  Statute  under  which  Business  Corporations  may  incorporate.— 
Business  corporations  are  organized  under  the  Act  of  October  2,  1903, 
found  in  the  Alabama  Session  Laws  of  1903,  chap.  395.  Under  it  corpora- 
tions may  be  organized  "  for  any  lawful  business  or  busmesses  of  any  kind  or 
nature  wliatsoever."  .  ■,     ^.  , 

2.  Incorporators.  —  Three  or  more.  There  are  no  residential  require- 
ments (Session  Laws  of  1903,  chap.  395,  sec.  1). 

3.  Contents  of  the  Certificate  of  Incorporation.  —The  certihcate  must 

contain :  ^,   ,  r 

a  ,\ame  —  Similarity  of  names  is  forbidden.  If  the  name  of  a  person  or 
partnership  be  assumed,  it  must  be  followed  by  the  addition  of  some  word 
designating  the  nature  of  at  least  one  of  the  businesses  to  be  carried  on, 
foll('.wed  by  the  word  •'  Company  "  or  "  Corporation." 

b  I'urpoxes.  —  The  objects  for  which  the  corporation  is  to  be  formed. 
Corporations  may  be  formed  under  the  General  Act  for  any  purpose  what- 
ever and  for  as  many  purposes  as  desired.  The  only  limitation  is  that 
banking  and  trust  company  powers  cannot  be  exercised  by  corporations 
formed  for  any  other  i)urpose. 

c     Domiciliary  Office.  —  Location  of  principal  office  in  the  State. 

,1  Capital  Slock.  —  The  amount  of  total  authorized  capital  stock  not  to  be 
less  tiian  $•>  000  There  is  no  maximum  limit.  Tlie  number  of  shares  into 
^vh"i.•h'it  is  divided,  also  amount  of  capital  stock  with  which  it  will  commence 
business,  not  to  be  less  than  twenty-five  per  cent  of  the  authorized  capital  in 
MO  case  less  than  SI, 000.  If  there  be  more  than  one  class  of  stock,  tlie 
c.'rtifi<;ate  must  contain  a  description  of  the  different  classes  of  stock,  with 
the  terms  on  which  each  class  is  created. 

e  Subscription  .1 ./.«/.- The  name  and  post  office  address  of  the  officer 
or  agent   designated  by    the  incori-orators  to   receive   subscriptions   to   the 

capital  stock.  .,  ,     ,  ,  r  ^i      • 

/••  Incorporators,  Directors,  and  Officers. -Sam^H  and  addresses  of  the  m- 
cor,.orators,  together  with  the  .unnber  of  shar.-s  subscrd.ed  for  by  each,  tins 
representing  the  amount  of  capital  stock  with  which  the  corporation  will 
^  211 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS, 

begin  business.  In  addition,  the  iTicorporatora'  names,  and  names  and 
addresses  of  the  directors  and  othcers  for  the  first  year  must  be  given. 
(See  ante,  sec.  2,  and  post,  sec.  12.) 

g.  Corporate  Existence.  —  Duration  of  corporate  existence,  which  may  be 
perpetual  if  desired. 

h.  Corporate  Rules  and  Regulations.  —  Provisions  desired  for  the  regulation 
of  the  business  and  for  the  conduct  of  the  aifairs  of  the  corporation,  creating 
and  defining  the  powors  of  the  corporation,  the  directors  and  stockholders  or 
any  class  or  classes  of  stockholders  (Id.  sec.  2). 

Note.  —  Additional  stateiiieuts  are  required  for  railway  transportation,  canal, 
telegraph,  telephone,  and  public  utility  corporations  (Id.  soc.  2,  sub.  h,  i). 

4.  Statutory  Powers.  —  The  statute  gives  to  corporations  organizing 
under  tlie  general  act  the  following  powers,  which  being  such  as  existed  at 
common  law  without  any  statutory  enumeration  thereof  may  be  termed 
"common  law  powers."  They  are  as  follows:  (1)  The  power  of  succession  ; 
(2)  to  sue  and  be  sued ;  (3)  to  make,  use,  and  alter  the  corporate  seal  ;  (4)  to 
adopt  by-laws ;  (5)  to  purchase  and  hold  real  property  for  the  purposes  of  the 
organization  ;  (6)  to  receive  and  grant  by  the  corporate  name  ;  (7)  to  appoint 
officers  and  agents  ;  (8)  to  borrow  money  ;  (9)  to  issue  negotiable  paper  ;  (10) 
to  mortgage   the  corporate  property  (Id.  sec.  72). 

Falconer  v.  Campbell,  2  McLean,  195. 

In  addition  to  the  foregoing  statutory  enumeration  of  the  common  law 
powers  of  corporations,  the  following  additional  powers  are  conferred  :  To 
hold  stockholders'  and  directors'  meetings  without  the  State,  provided  certain 
preliminary  formalities  are  observed;  to  carry  on  corporate  business  in  other 
States  and  foreign  countries ;  to  subscribe  for,  purchase,  and  hold  stock  and 
bonds  of  other  corporations  (Id.  sec.  7) ;  under  certain  conditions  to  operate 
railroads  (Id.  sec.  14);  to  issue  bonds  and  mortgages  or  create  indebtedness 
•without  limit  with  the  consent  of  a  majority  of  the  stockholders  first  obtained 
(Id.  sec.  7)  ;  to  accept  real  and  personal  property  in  payment  of  capital 
stock  ;  to  create  liens  upon  the  stock  of  members  for  debts  due  the  corpora- 
tion (Id.  sec.  7,  sub.  c).  Corporations  other  than  railway,  telegraph  and 
telephone,  banking,  insurance,  and  trust  companies  may  consolidate  with 
other  corporations  (Id.  sec.  7,  sub.  j  and  k,  sees.  39-42;  see  also  Laws  of  1903, 
chap.  117).  Certain  corporations  dcnng  a  business  of  a  quasi-public  nature 
but  organized  under  the  General  Act,  may  exercise  the  power  of  eminent  do- 
main (Id.  sees.  8  and  9). 

Railway,  mining,  manufacturing,  and  quarrying  corporations  may  construct, 
acquire,  and  operate  steamboats,  barges,  ships  for  transportation  of  freight 
and  passengers  (Id.  sec.  10).  They  may  also  subscribe  for  or  aid  any 
other  corporation  in  the  construction  of  a  railroad,  etc.  (sec.  12). 

Mining,  manufacturing,  and  quarrying  corporations  may  construct  and 
operate  to  and  from  their  plants,  railways,  tramways,  canals,  tunnels,  and 
roads,  and  as  common  carriers,  transport  freight  and  passengers  thereon 
(Id.  sec.  14). 

Only  corporations  formed  for  the  transaction  of  a  banking  or  trust  com- 
pany business  can  engage  in  banking  within  the  State  (Id.  sec.  22). 

Corporations  also  have  power  to  issue  preferred  stock  ;  to  authorize  voting 
by  proxy  at  stockholders'  meeting;  to  forfeit  stock  for  non-payment  of  assess- 
ments (Id.  sees.  2,  37  ;  see  also  Session  Laws  of  1903,  chap.  08;  also  Id.  chap. 
111). 

212 


SYXOPSIS-DIGEST    OF    INCORPORATION    ACTS. 

5.  Corporate  Indebtedness.  —  There  is  no  statutory  limit  upon  he 
amount  of  indebtedness  that  may  be  contracted  by  a  business  corporation. 
To  create  a  bonded  indebtedness  or  increase  the  same  or  to  mortgage  tlie  real 
propierty  of  the  corporation,  the  vote  of  the  larger  amount  of  stock  present 
and  voting  at  a  meeting  duly  called  for  that  purpose  must  be  had  (Id.  sec. 
7,  sub.  c;  .sec.  46). 

Under  the  Constitution  (Art.  XIV.  sec.  6)  corporations  cannot  issue  bonds 
except  for  money,  labor  done,  or  money  or  property  actually  received,  and 
all  fictitious  increase  of  indebtedness  shall  be  void. 

Nelson  v.  Hubbard,  96  Ala.  238,  11  Son.  428;  Dexter  v.  McClellan,  116  Ala.  37, 
22  Son.  461. 

C).  Procuring  the  Charter.  —  Tlie  certificate  must  be  signed  by  all  the 
subscribers  to  the  capital  .-^tock  named  therein.  The  statute  does  not  ex- 
pressly require  that  the  certificate  be  acknowledged  by  the  subscribers.  The 
certificate  must  then  be  filed  and  recorded  in  the  office  of  the  probate  judge 
of  the  county  where  the  corporation  will  have  its  principal  place  of  business. 
After  it  has  been  recorded  the  probate  judge  endorses  thereon  a  certificate 
of  registration.  Within  ten  days  after  the  filing  of  the  certificate  in  the 
oflSce  of  the  probate  judge,  the  corporation  must  cause  to  be  filed  in  the  ofilce 
of  the  Secretary  of  State  a  statement  signed  by  said  probate  judge,  giving 
the  name  of  the  corporation,  the  names  of  its  incorporators,  the  date  of  the 
incorporation,  the  amount  of  the  capital  stock,  and  the  name  of  the  county 
in  which  located.  The  certificate  must  have  attached  to  it  a  statement  under 
oath  by  the  person  authorized  by  the  incorporators  to  receive  subscriptions 
to  the  capital  stock,  which  shall  show  the  amount  of  capital  stock  which 
has  been  paid  in  and  the  amount  of  stock  secured  by  contracts  for  stipulated 
labor  or  services  or  transfer  of  property,  which  amount  shall  be  at  least 
twenty  per  cent  of  the  stock  subscribed  for,  and  in  no  case  less  than 
81,000.  At  the  time  the  certificate  is  filed  with  the  judge  of  probate  the 
incorporators  must  pay  the  organization  tax  to  the  judge  of  probate  (id. 
sees.  3,  4,  5,  and  6).  A  coi^y  of  the  subscription  list  must  be  also  attached  to 
the  certificate. 

Corporate  existence  commences  as  soon  as  the  articles  are  filed  and  recorded 
in  the  office  of  the  probate  judge  of  the  county  where  the  domiciliary  office 
is  located  and  the  organization  tax  and  filing  fees  paid. 

O.  W.  Co.  V.  Bliss,  132  Ala.  253 ;  31  Sou.  81  ;  M.  &  O.  Rv.  Co.  v.  P.  T.  C.  Co.,  120 
Ala.  21  ;  24  Son.  408  ;  N.  C.  Bank  i'.  McDonnell,  92  Ala.  387;  9  Sou.  149  ;  Harris  i'. 
(J.  L.  Co.,  128  Ala.  652;  29  Son.  Gil. 

7.  Organization  Tax  —  On  capitalization  not  exceeding  $50,000,  $25; 
not  exce<-ding  SlO0,0()0,  iJoO;  any  amount  in  excess  of  $100,000,  $50  on  the 
first  one  hundred  thousand,  and  S2.'i  on  each  additional  one  hundred  thou- 
sand dollars  or  fractional  part  thoreof  (Id.  sec.  5). 

8.  Filing  and  Recording  Fees,  —  For  examining  the  certificate  the 
probate  judge  is  entitled  to  a  fee  of  $2.50,  and  for  recording  the  certificate 
in  his  office,  15  cents  per  folio  The  Secretary  of  State  is  entitled  to  a  fee 
of  5f»  cents  for  filing  in  his  office  thf  statement  of  tlie  probate  judge  required 
by  law  giving  the  name  of  the  corporation,  names  of  incorporators,  date  of 
incorporation,  amount  of  capital  stock,  and  the  name  of  the  county  in  which 
incorjwrated. 

213 


INCORPORATION   AND   ORGANIZATION  OP   CORPORATIONS. 

9.  Commencing  Business.  —  Twenty-five  per  cent  of  the  autliorized 
capital  stock  of  a  corporation  must  be  subscribed  in  good  faith,  payable  in 
money  before  the  commencement  of  corporate  existence,  but  subscribers  may 
have  the  privilege  of  discharging  the  same  in  service,  labor,  or  property  at  the 
reasonable  value  for  such  services,  labor,  or  property.  Twenty  per  cent  of 
all  subscriptions  for  stock  must  be  actually  paid  in,  and  said  amount  must 
never  be  less  in  the  aggregate  than  $1,000  (Id.  sees.  2  and  4;  see  also  Laws 
of  1903,  chap.  110).  Business  must  be  commenced  within  five  years  from 
the  date  that  the  charter  issues  (Id.  sec.   37). 

10.  Organization  Meetings  —  A  preliminary  organization  is  effected  by 
the  incorporators  meeting  within  the  State  (by  proxy,  if  desired)  and  authorizing 
some  person  to  receive  subscriptions  to  the  capital  stock  of  the  proposed  cor- 
poration. After  the  charter  is  secured  from  the  State  by  the  compliance  with 
the  necessary  formalities  prescribed  by  statute  (as  stated  above),  the  incorpora- 
tors,who,  under  the  statute,  must  likewise  be  subscribers  to  the  capital  stock, 
should  sign  a  written  consent  to  the  holding  of  an  organization  meeting,  fixing 
the  time  and  place  for  holding  the  same.  The  incorporators  should  then 
organize  by  adopting  by-laws  and  by  the  transaction  of  other  routine  organiza- 
tion business.  There  is  no  statutory  time  prescribed  within  which  this 
organization  meeting  must  be  held,  the  law  simply  providing  that  non-user  of 
corporate  franchise  for  a  period  of  five  consecutive  years  is  a  forfeiture  of  such 
franchises.  Immediately  after  the  adjournment  of  the  organization  meeting 
of  the  incorporators  and  stockholders,  a  meeting  of  the  board  of  directors 
should  be  called  for  the  purpose  of  electing  a  2;)resident,  secretary,  and  treas- 
urer, and  such  other  officers  as  the  by-laws  may  prescribe. 

11.  Meetings,  Stockholders'  and  Directors'. — In  the  absence  of  the 
written  consent  of  all  resident  stockholders,  stockholders'  meetings  must  be 
held  within  the  State,  but  such  meetings  may  lie  held  without  the  State  upon 
the  written  consent  of  such  resident  stockholders.  All  corporations  holding 
their  stockholders'  meetings  without  the  State  must  give  the  name  and  resi- 
dence within  the  State  of  the  agent  in  charge  of  their  principal  office  within 
the  State,  to  be  signed  by  the  president  or  secretary  of  the  corporation  under 
the  corporate  seal.  The  certificate  should  then  be  filed  in  the  office  of  the 
Secretary  of  State  and  in  the  office  of  the  probate  judge  of  the  county  in 
which  it  has  its  principal  office.  A  copy  of  all  proceedings  had  at  stockholders. 
and  directors'  meetings  held  without  the  State  must  be  deposited  with  such 
agent.  Written  consent  of  the  stockholders  residing  within  the  State,  for 
stockholders'  meetings  to  be  held  without  the  State  when  filed  in  the  office  of 
the  Secretary  of  State,  shall  remain  in  force  until  revoked.  Directors'  meet- 
ings may  be  held  within  or  without  the  State  as  the  by-laws  may  provide  (Id. 
sec.  7). 

Brockway  v.  G.  M.  L.  Co.,  102  Ala.  620 ;  15  Sou.  431. 

12.  Directors'  Qualifications.  —  There  must  be  at  least  three  directors, 
who  shall  be  stockholders  and  hold  office  for  one  year  or  until  their  suc- 
cessors are  elected.     There  are  no  residential  requirements  (Id.  sec.  36). 

Smith  V.  P.  R.  Co.,  30  Ala.  650 ;  Fitzpatrick  v.  T).  P.  Co.,  83  Ala.  604  ;  2  Son.  727. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  debts 
of  the  corporation  only  for  the  unpaid  stock  owned  by  them.  The  corpora- 
tion may,  by  the  adoption  of  a  proper  by-law,  place  a  lien   upon  the  shares 

214 


SYNOPSIS-DIGEST   OF    INCORPORATION   ACTS. 

of  its  stockholders  for  auy  debt  or  liability  they  may  incur  to  the  company 
(Id.  sec.  27). 

Lea  r.  Company,  119  Ala.  271  ;  24  Son.  28  ;  Nicrosi  v.  Company,  115  Ala.  429; 
22  Sou.  147. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  signed  by  the  president  and  secretary  or  treasurer.  The  par 
value  may  be  any  amount  (Id.  sec.  28). 

15.  Preferred  Stock.  —  Preferred  stock  is  expressly  authorized  under 
the  new  act  (sec.  43).  If  provided  for  in  the  original  certificate  of  incor- 
poration, the  terms  on  which  it  is  issued  must  be  therein  stated.  If  subse- 
quent to  incorporation  it  is  desired  to  issue  preferred  stock,  this  may  be  done 
by  the  vote  of  the  holders  of  two-thirds  in  value  of  the  capital  stock  outstand- 
ing at  a  meeting  called  for  that  purpose.  The  proceedings  of  this  meeting 
must  be  certified  to  the  Secretary  of  State  and  filed  and  recorded  in  his  office. 
After  this  has  been  done,  preferred  stock,  not  to  exceed  two-thirds  of  the  cap- 
ital stock  paid  in  in  cash  or  property,  may  be  issued.  Each  stockholder  shall 
be  first  entitled  to  the  privilege  of  taking  such  preferred  stock  in  proportion 
to  the  amount  of  common  stock  held  by  him,  or  a  less  amount  should  he 
desire,  before  the  preferred  stock  is  offered  for  sale  to  the  public  (Id.  sec.  43). 

16.  Payment  of  Capital  Stock.  —  Under  the  Constitution  corporations 
can  only  issue  stock  for  money,  labor  done,  or  money  or  property  actually  re- 
ceived.    All  fictitious  increase  of   stock    is  void  (Cons.,  Art.  XIV.  sec.  6). 

All  subscriptions  to  capital  stock  must  be  paid  in  cash,  except  that,  if  so 
provided  in  the  contract  of  subscription,  such  subscriptions  may  be  discharged 
by  the  rendition  of  stipulated  necessary  services,  or  the  performance  of  stipu- 
lated necessary  labor,  or  the  transfer  of  property  at  the  reasonable  value 
thereof.  In  such  cases  the  sul)scription  list  shall  state  the  names  of  such 
subscribers,  with  the  nature  of  the  services  or  labor  to  be  performed  and 
a  brief  description  of  the  property  and  when  it  is  to  be  transferred  to  the 
company  (Id.  sec.  26). 

Bibb  V.  Hall,  101  Ala.  79;  14  Sou.  98;  Haas  v.  Hall,  111  Ala.  442;  20  Son.  78; 
Paschal!  v.  Whit.^ett,  11  Ala.  472  ;  Spence  v.  Shapard,  57  Ala.  598 ;  Knox  v.  C.  L.  Co., 
6  Ala.  180  ;  5  Sou  578;  Fit/.patrick  v.  P.  Co.,  83  Ala.  604;  2  Sou.  727  ;  Williams  v. 
Evans,  87  Ala.  725;  6  Sou  702;  Parsons  v.  Joseph,  92  Ala.  403;  8  Sou.  783; 
Beitman  v.  Steiner,  98  Ala.  241  ;  13  Sou.  87  ;  Perry  v.  Mill  Co.,  93  Ala.  364;  9  Sou. 
217. 

17.  Booka.  —  It  is  contemplated  by  the  statute  that  the  books,  records, 
and  papers  of  the  corporation  shall  be  kept  at  the  principal  office  within  the 
State  unless  the  by-laws  otherwise  i)rovide.  The  statute  gives  to  all  stock- 
holders the  right  of  access  to,  and  inspection  and  examination  of,  such  books 
and  records  and  papers  at  reasonable  and  proper  times  (Id.  sec.  35).  It  is 
specially  provided  that  a  stock  regi.ster  shall  be  kept  with  an  agent  in  the  State, 
showing  list  of  stockholders,  transfers,  and  liypothecations  (Id.  .sec.  32). 

IH.  Office  and  Agent. — Every  corporation  must  liavc  an  office  witliin 
thf;  State,  and  an  agent  in  charge  thereof  upon  whom  process  may  be  served 
(Id.  see.  2). 

19.  Reports.  —  No  annual  reports  are  required. 

20.  Anti-TruBt  Statute  —The  State  has  an  anti-trust  statute,  modelled 
closely  after  the  New  York  ,\ct. 

Beitman  v.  Steiner,  98  Ala.  241  ;  13  Sou.  87. 

215 


INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

21.  Statutory  Ground  for  Forfeiture  of  Charter.  —  Non-user  for  a 
period  ol  tive  consecutive  years  is  ground  for  forfeiture  of  the  charter  upon 
proper  action  taken  by  the  State  (Id.  sec.  37).    Also  non-payment  of  license  tax. 

State  V.  Bank,  2  Stew.  30;  Curry  i-.  Woodward,  53  Ala.  371 ;  M.  &  O.  R.  R.  Co. 
V.  State,  20  Ala.  573  ;  I.  &  E.  Co.  v.  Locke,  50  Ala.  332  ;  State  i;.  U.  R.  Co.,  108  Ala. 

29;   18  Sou.  801. 

2'2.  Amendments. —  If  through  accident  or  inadvertence  the  corporation 
has  failed  to  comply  with  any  of  the  requirements  of  the  act,  the  president 
or  other  executive  head  of  the  corporation  may  supply  such  omission  or  de- 
lect by  filing,  in  the  office  of  the  judge  of  probate  of  the  county  in  which  the 
corporation  was  organized,  a  statement  in  writing  under  oath,  setting  forth 
the  omission  or  error,  and  supplying  or  correcting  the  same  (Id.  sec.  45). 
The  articles  may  be  also  amended  for  any  purpose  desired  by  complying  with 
the  statute  (Id.  sec.  7,  sub.  m,  and  n  ;  sees.  44,  46,  47,  see  also  Laws  of  1903, 
chap.  106). 

G.  L.  C.  H.  Ins.  Co.  r.  Kamper,  73  Ala.  325.   .. 

23.  Renewal  of  Corporate  Existence.  —  May  be  renewed  for  an  addi- 
tional period  of  twenty  years  by  compliance  with  the  statute  in  such  case 
made  and  provided  (Laws  of  1903,  chap.  105;  see  also  Id.  chap.  395, 
sec.  7,  sub.  n,  sec.  47). 

24.  Annual  Privilege  Tax.  —  When  paid  up  capital  is  under  ^10,000, 
SIO;  when  it  exceeds  $10,000  and  does  not  exceed  .$25,000,  $15;  when  it  ex- 
ceeds 825,000  and  does  not  exceed  §50,000,  S25;  when  it  exceeds  $50,000 
and  is  not  over  $100,000,  ^.iO  ;  when  it  exceeds  $100,000  and  does  not  exceed 
8200.000,  $75;  when  it  exceeds  $200,000  and  does  not  exceed  $300,000,  $125; 
when  it  exceeds  $300,000  and  does  not  exceed  $400,000,  $170  ;  when  it  exceeds 
8100,000  and  does  not  exceed  $500,000,  §200;  when  it  exceeds  $.500,000  and 
does  not  exceed  $1,000,000,  $300;  when  it  exceeds  $1,000,000,  $500  (Code, 
§  4122,  as  amended  by  Laws  of  1901,  Act  No.  1151).  Tax  becomes  due 
October  l.st. 

25.  Dissolution. —  Dissolution  may  be  effected  by  an  agreement  of  all 
stockholders  signed  and  acknowledged,  filed  and  recorded  with  the  probate 
judge  of  the  county  of  organization,  and  published  in  a  newspaper  of  county 
of  principal  place  of  business  four  weeks  ;  or  (if  such  agreement  cannot  be 
had)  holders  of  two-thirds  in  vahie  of  stock  may  petition  Court  of  Chancery 
or  other  court  of  competent  jurisdiction  for  dissolution. 

State  V.  Webb,  97  Ala.  Ill  ;  12  Sou.  377  ;  McKleroy  v.  G.  L.  I.  Co.,  126  Ala.  184  ; 
28  Sou.  660. 

26.  Foreign  Corporations.  —  Under  the  Alabama  Constitution  of  1901, 
Art.  XII.  sec.  232,  no  foreign  corporation  can  do  any  business  in  the  State  with- 
out having  at  least  a  known  place  of  business,  and  an  authorized  agent  or 
agents  therein,  and  without  filing  with  the  Secretary  of  State  a  certified  copy 
of  its  articles  of  incorporation.  The  Legislature  is  directed  to  provide  for  the 
payment  of  franchise  tax  by  such  corporation  to  be  based  on  the  actual 
amount  of  capital  employed  within  the  State.  Under  the  Laws  of  1903,  No. 
308,  every  foreign  corporation,  except  railway,  telegraph,  long-distance  tele- 
phone, express,  sleeping-car,  life  and  fire  insurance  companies,  building  and 
loan  associations  authorized  to  do  business  under  general  law,  must  pay  to  the 
probate  judge  of  the  county  in  which  it  has  a  resident  agent  a  license  tax  of 

216 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

one-tenth  of  one  per  cent  for  the  use  of  the  State  and  one-half  of  that  sum  for 
the  use  of  the  county,  to  be  computed  upon  the  basis  of  the  actual  amount  of 
capital  employed  by  it  within  the  State.  This  tax  is  payable  on  the  tirst  day 
of  January  of  each  year.  Corporations  not  authorized  to  do  business  within 
the  State  before  obtaining  permit  to  do  so  must  pay  to  the  State  Treasurer 
for  tlie  use  of  the  State  a  tax  of  one-tenth  of  one  per  cent  upon  ihe  amount 
of  cafiital  to  be  actually  employed  within  the  State  before  they  are  permitted 
to  file  necessary  papers  upon  which  to  base  their  application  for  the  permit. 
A  statement  is  required  to  be  filed  by  the  executive  head  of  such  foreign  cor- 
poration with  the  officer  w  hose  duty  it  is  to  receive  the  payment  of  the  tax, 
giving  certain  necessary  information  relative  to  the  corporate  organization 
with  reference  to  the  character  and  description  of  the  property  and  value  there- 
of within  the  State.  The  penalty  for  non-compliance  w  ith  the  statute  is  ina- 
bility to  sue  in  the  courts,  and  subjects  the  corporation  to  liability  of  fine.  The 
act  expressly  provides  that  it  shall  not  apply  to  corporations  organized  under 
the  laws  of  the  United  States  nor  to  corporations  engaged  in  transacting  the 
business  of  interstate  commerce. 

Hall  V.  Engine  Co.,  91  Ala.  363  ;  8  Sou.  348;  Morris  v.  Hall,  41  Ala.  .510  ;  Lucas 
V.  Bank,  2  Stew.  147  ;  Craddock  );.  Mortgage  Co.,  88  Ala.  281  ;  7  Sou.  196  ;  Cook  v. 
Brick  Co.,  98  Ala.  409  ;  12  Son.  918;  State  y.  Bank,  108  Ala.  3;  18  Sou.  533;  George 
V.  N.  E.  M.  Sec.  Co.,  109  Ala.  .548;  20  Sou.  331  ;  Electric  L.  Co.  v.  Rust,  117  Ala. 
680 ;  23  Son.  751  ;  Earrior  p.  N.  E.  M.  S.  Co.,  88  Ala.  275  ;  7  Sou.  200  ;  Collier  v.  Davis, 
94  Ala.  456  ;  10  Sou.  86  ;  Christian  v.  A.  E.  L.  &  M.  Co.,  89  Ala.  198  ;  7  Sou.  427  ;  City  of 
Greenville  i-.  G.  W.  Co.,  1:25  Ala.  625;  27  Sou.  764;  Sullivan  v.  Vernon,  121  Ala. 
393  ;  25  Sou.  600 ;  Beard  v.  U.  &  A.  P.  Co.,  71  Ala.  60 ;  Falls  v.  U.  S.  S.  L.  &  B.  Co., 
97  Ala.  417  ;  13  Sou.  25  ;  McLeod  v.  Am.  E.  L.  M.  Co.,  100  Ala.  496  ;  14  Sou.  409  ; 
Chattanooga,  etc.  Ass'n  v.  Denson  et  al.,  189  U.  S.  408;  D.  M.  &  T.  I.  Co.  v. 
Nixon,  95  Ala.  318;  10  Sou.  311. 


ALASKA. 

(The  references  are  to  the  Act  of  Congress  [Public  Act,  13S]  approved  March  2,  1903, 
unless  otherwise  stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate. — 
Tiie  Jiusiness  Corporation  Act  of  Alaska  is  found  in  Acts  of  Congress  No. 
135,  approved  March  2,  1903.  Under  this  act  corporations  may  organize  for 
the  purpose  of  transacting  the  following  lines  of  business  in  Alaska  only,  to 
wit:  railway,  street  railway,  wagon  road,  canal,  flume,  telegraph,  telephone, 
mining,  fishery,  smelting,  electric  power,  lighting,  dock,  wharfage,  elevator, 
warehouse,  hotel,  trade,  tran.sportation,  agricultural,  lumbering,  and  manu- 
facturing coiMf)ariie3. 

'J.  Incorporators.  —  Tliree  or  moie  adult  )>ersons,  all  of  wlioni  must  be 
hoTifi  full'  re.-^idi-nts  of  the  district  of  .\l;isk:i  (sec.  1). 

:».    Contents  of  the  Articles  of  Incorporation. —  Articles  must  contain  : 
a.    Corporate  Name.  — Similarity  of  names  not  forbidden  (sec.  'J)- 
/;.    Purposes.  —  Nature    and    character   of    the    business.     May  be    incor- 
porated for  one  or  more  of  tlu'  purpo.sc.s  above  enumerated  (Id.). 

c.  Dnmiriliary  Ojfire.  —  I'rinci[ial  plac  for  transacting  business. 

d.  Duration.  —  Time  of  commencement  and  period  of  continuance  not  to 
exceed  fifty  years  (Id.). 

217 


INCOrxPORATION    AND   ORGANIZATION    OP   CORrORATIONS. 

e.  Capital  Slock'.  —  Amount  of  capital  stock  and  manner  in  which  the 
same  is  to  be  paid  in,  and  the  number  and  par  vahie  of  the  shares  (Id.  sec.  10). 

/'  Jtidebttdness.  —  llijjjliest  amount  of  indebtedness  or  liability  tluit  may 
be  incurred  (Id.). 

g.  JWvnes  of  lucorpor-ators.  —  Names  and  residences  of  the  incorpora- 
tors (Id.). 

h.  Directors.  —  Number  and  names  of  first  board  of  directors,  and  also 
statement  as  to  what  otficers  shall  have  ciiarge  of  the  management  of  the  cor- 
porate affairs  and  when  they  shall  be  elected  and  their  terms  of  office  (Id.). 

4.  Statutory  Powers.  —  The  statute  merely  enumerates  the  common  law 
powers  of  corporations.  The  power  to  remove  officers  and  directors  is  ex- 
pressly granted,  as  well  as  the  right  of  stockholders  to  vote  by  proxy.  Stock 
may  be  forfeited  for  non-payment  of  assessments  (sees.  4-6,  10). 

5.  Procuring  the  Charter.  —  Incorporators  must  subscribe  and  acknowl- 
edge written  articles  of  incorporation  in  triplicate.  One  of  these  must  be 
filed  and  recorded  in  the  office  of  the  secretary  of  the  District  of  Alaska  and 
another  in  the  office  of  the  clerk  of  the  district  court  of  the  recording  division 
where  the  principal  place  of  business  of  the  corporation  is  to  be  located  ;  the 
third  to  be  retained  in  the  possession  of  the  corporation.  Corporate  existence 
commences  as  soon  as  the  foregoing  steps  have  been  taken  (sees.  2-4). 

6.  Corporate  Indebtedness.  —  The  corporate' indebtedness  cannot  ex- 
ceed the  capital  stock  (sec.  17). 

7.  Organization  Tax.  —  There  is  no  organization  tax  in  the  district  of 
Alaska. 

8.  Filing  and  Recording  Fees. — The  filing  and  recording  fees  in  the 
office  of  the  secretary  of  the  District  of  Alaska  have  not  yet  been  fixed  by 
the  Attorney-General  of  the  United  States.  For  i-ecording  articles  in  the 
office  of  the  clerk  of  the  district  court  of  the  recording  division  where  the 
principal  place  of  business  of  the  corporation  is  to  be  located  a  fee  of  15 
cents  per  folio  must  be  paid  for  such  service.  (See  Public  Act  No.  150, 
Title  I.  .sec.  :>0,  approved  Jan.  6,  1900). 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as  the 
articles  are  filed  in  the  proper  offices  and  the  organization  effected  (sec.  4). 

10.  Organization  Meeting.  — The  organization  meeting  must  be  held  in 
the  District  of  Alaska.  Corporations  must  organize  within  one  month  after 
filing  articles  of  incorporation  by  the  adoption  of  by-laws  (sees.  9-16). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
mu.st  be  held  within  the  District  of  Alaska.  The  requirement  that  a  ma- 
jority of  the  directors  must  be  residents  of  the  district  requires  that  all  meet- 
ings of  the  board  of  directors  as  such  shall  be  there  held  (sec.  6). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  not  less  than  three  directors,  who  shall  be  stockholders  and  a  majority 
shall  be  residents  of  the  District  of  Alaska.  They  are  each  required  to  sub- 
scribe to  an  oath  of  office  (sec.  6). 

h.  Liabilities. — Directors  are  liable  for  illegal  payment  of  dividends  or  for  the 
unlawful  withdrawal  of  any  part  of  the  capital  stock  of  the  corporation  (sec.  13). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  only  for  the 
amount  that  remains  unpaid  upon  the  par  value  of  their  stock  (sec.  14). 

14.  Stock  Certificates.  — Each  stockholder  is  entitled  to  a  stock  certifi- 
cate signed  by  such  officers  as  the  by-laws  may  prescribe.  The  par  value  of 
stock  may  be  any  amount. 

218 


SYNOPSIS-DIGEST    OP   INCORPORATION   ACTS, 

15.  Preferred  Stock.  —  There  is  no  provision  for  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  consideration 
of  money,  labor,  or  property,  estimated  at  its  true  money  value  (sec.  1-1). 

17.  Books.  —  Books  of  account,  stock  books,  and  record  books  must  be 
kept  at  its  principal  office  in  Alaska.  These  are  open  to  the  inspection  of 
stockholders  (sec.  IG). 

18.  Office  and  Agent.  —  The  office  and  the  principal  managing  officer  or 
superintendent  must  respectively  be  maintained  and  reside  in  the  District  of 
Alaska  (sees.  2,  IG). 

19.  Reports.  —  The  president,  secretary,  and  treasurer  must  annually 
make  out  and  publish  vs'eekly  for  three  weeks  a  statement  showing,  first, 
number  of  shares  of  stock  outstanding;  second,  amount  paid  in  on  each 
share;  third,  actual  paid  up  capital  of  the  corporation;  fourth,  actual  cash 
value  of  the  property  and  its  location  ;  fifth,  statement  of  debts  and  liability 
and  a  description  of  the  same ;  sixth,  salaries  paid  officers,  manager,  and 
superintendent ;  seventh,  increase  or  decrease,  if  any,  in  the  stock,  the  capital 
and  the  liability  of  the  corporation  during  the  preceding  year.  On  or  before 
September  1  of  each  year  there  must  be  filed,  in  the  office  of  the  clerk 
of  the  district  court  of  the  recording  division  where  the  principal  office 
of  the  corporation  is  located,  a  list  containing  the  names  of  the  principal 
officers,  including  the  president,  cashier,  secretary,  and  managing  agent 
(sees.  20,  23). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  specially  appli- 
cable to  the  district  of  Alaska.  (See  Anti-Trust  Act,  U.  S.  Statutes  of  1890, 
chap.  647.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  act  does  not 
provide  for  forfeiture  of  charters. 

22.  Amendments.  —  Articles  may  be  amended  for  the  purpose  of  increas- 
ing or  diminishing  the  capital  stock,  or  for  the  purpose  of  amending  any 
of  the  gent:'ral  provisions  of  tlic  articles  (sees.  17-19). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for 
the  extension  of  cori)orate  existence. 

24.  Dissolution.  —  The  corporation  may  be  dissolved  by  the  voluntary 
action  of  the  stockholders  taken  as  provided  for  in  the  act  (sec.  22). 

25.  Annual  License  Fee.  —  There  is  no  annual  license  fee  in  the  District 
of  Alaska. 

26.  Foreign  Corporations.  —  Under  Act  of  June  6,  1900,  chap.  23  of 
Title  III.  U.  S.  Statutes  at  L,arge,  1900,  pp.  321-528,  a  foreign  corporation, 
wliether  created  under  the  laws  of  the  United  States  or  those  of  any  State 
or  Territory  of  the  United  States,  is  required,  before  doing  business  within 
the  district  of  AIa.ska,  to  file  with  the  secretary  of  the  district  and  the 
clerk  of  the  district  court  for  the  division  within  which  tiie  business  is 
to  be  carried  on,  an  authent  icated  copy  of  its  charter  or  articles  of  incorpora- 
tion, and  a  statement  verified  by  oath  of  the  presidi-nt  and  secretary  of 
the  corf)oration  and  attested  by  a  majority  of  the  directors,  showing:  name 
and  location  of  principal  plac  of  business  without,  and  also  (if  it  have  one) 
within  the  district;  amount  f>f  capital  stock  ;  amount  thereof  i)aid  in  in  money, 
and  amount  jiaid  in  any  other  way.  and  inaniicr  thereof;  amount  of  assets 
and  of  what  they  consist,  and  actual  cash  value  thereof;  liabilities,  and  if 
any  of  its  indebtedness  is  secured,  how  and  upon  what  property-  It  must 
also  file  with  the  foregoing  papers  a  certificate  under  seal  of  the  jiresident, 
vice-president,  or  other  aeting   head  of  the   corporation,  and  the   secretary, 

219 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

if  there  be  one,  certifying  thot  such  corporation  has  consented  to  be  sued 
in  the  courts  o£  the  district  upon  all  causes  of  action  arising  against  it  in 
the  district,  and  that  process  may  be  served  upon  a  designated  agent  residing 
in  the  district;  and  must  file  therewith  written  consent  of  such  agent.  Such 
corporation  must  also  annually,  within  thirty  days  from  July  1,  report  in  sub- 
stantially tiie  same  form  required  in  the  foregoing  statement  and  containing 
similar  infornuition. 

ARIZONA. 

(The  references  cited  below  are  to  the  Revised  Statutes,  1901,  unless  otherwise  stated.) 

1.  Statute  under  'which  Business  Corporations  may  incorporate. — 

The  General  Coiporation  Act  in  force  in  Arizona  went  into  effect  September 
1,  1901.  It  is  found  in  the  Revised  Statutes  of  1901,  sees.  764-783  and 
sees.  909-927,  and  amendments  thereto.  It  is  entitled  "  Title  XTII."  Chap. 
2  thereof  refers  to  business  corporations.  In  1903  an  act  was  passed  amend- 
ing sees.  7GG-770  of  the  act  above  referred  to.  Under  it  parties  may  incor- 
porate for  any  lawful  purpose. 

2.  Incorporators  (R.  S.,  sec.  704).  —  Any  number  of  persons  may  be 
incorporators.     There  are  no  residential  requirements. 

3.  Contents  of  Articles  of  Incorporation.  —  The  articles  of  incorpora- 
tion must  contain  the  following: 

a.  Name  and  Domiciliary  Office  (Id.  sec.  706).  —  The  articles  of  incorpora- 
tion must  state  the  principal  place  of  business  of  the  corporation  within 
the  Territory.     Similarity  of  names  is  not  forbidden. 

h.  General  Nature  of  the  Business  proposed  to  be  transacted .  —  The  Terri- 
torial auditor  allows  as  many  purposes  as  may  be  desired  to  be  inserted 
in  the  articles.  Any  kind  of  business  may  be  authorized  except  insurance, 
savings  and  loan  and  eleemosynary  corporations. 

B.  B.  Co.  V.  A.  &  C.  Co.,  Ariz  ,  3.5  Pac.  983. 

c.  Capital  Stock.  —  The  amount  of  the  capital  stock  authorized,  and  the 
time  when,  and  conditions  upon  which,  it  is  to  be  paid  in.  Capital  stock 
uuder  this  section  is  without  limit  as  to  amount.  The  par  value  of  the 
shares  may  be  any  amount. 

d.  Corporate  Existence.  —  The  time  of  the  commencement  and  termination 
of  the  corporate  existence  of  the  corporation.  This  period  is  limited  by 
statute  to  twenty-five  years  (Id.  sec.  771).  Corporate  existence  may  be 
renewed  for  another  period  of  twenty-five  years  upon  a  vote  of  three- 
fourths  of  the  stockholders  given  at  a  meeting  duly  called  for  that  purpose 
(Id.  sec.  771). 

e.  Officers  and  Directors.  —  The  names  of  the  officers  or  persons  by  whom 
the  affairs  of  the  corporation  are  to  be  conducted,  and  the  times  at  which 
they  are  to  be  elected.  Reference  is  made  in  the  articles  to  a  board  of 
directors  of  a  designated  number,  who  shall  be  elected  annually  by  the 
stockholders.  As  far  as  the  statute  is  concerned,  one  would  scarcely  know 
that  corporations  oj'ganized  under  the  General  Act  were  supposed  to  have  a 
board  of  directors. 

/.  Corporate  Liability  — The  highest  amount  of  indebtedness  or  liability  to 
which  a  corporation  is  at  any  time  to  subject  itself.  This  liability  must 
not  in  any  case  exceed  two-thirds  of  the  capital  stock  (Id.  sec.  767). 

ff.  Annual  Meeting.  —  This  is  inserted  by  inference  from  sec.  5  of  the 
220 


SYXOPSIS-DIGEST    OF   INCORPOEATION   ACTS. 

Amendment  of  1903,  which  requires  a  statement  of  the  time  at  which  the 
officers  in  cliarge  of  the  affairs  of  the  corporation  are  to  be  elected. 

h.  Stockholders'  Liability.  — Unless  the  private  property  of  the  stockholders 
is  expressly  exempt  in  the  articles  of  incorporation  from  liability  for  corporate 
debts,  stockholders  are  liable  for  the  debts  of  the  corporation  in  the  propor- 
tion which  their  stock  bears  to  the  entire  capital  stock. 

i.  Corporate  Rules  and  Regulations.  —  While  the  statute  does  not  authorize 
the  insertion  in  the  articles  of  any  corporate  rules  and  regulations,  the 
Territorial  auditor  permits  such  rules  and  regulations  to  be  inserted  in  the 
articles  filed  in  his  office. 

4.  Statutory  Po'wers.  —  The  statute  (Id.  sec.  765)  enumerates  the  com. 
mon  law  powers  of  corporations.  A  sinking  fund  may  be  established  f ^r  the 
payment  of  debts  (Id.  sec.  777).  Xo  mining  or  manufacturing  corporation 
can  have  the  power  to  operate  or  construct  any  railway,  tramway,  turnpike,  or 
public  highway,  except  such  as  lead  from  their  principal  work  to  adjacent 
streams,  railways,  or  highways  (Id.  sec.  781). 

Debts  cannot  be  contracted  for  in  excess  of  two-thirds  of  the  authorized 
capital  stock. 

Keyser  v.  Shuts,  29  Pac.  386. 

5.  Procuring  the  Charter  (Id.  sees.  766-769).  —  The  articles  must  be 
signed  and  acknowledged  before  some  officer  authorized  to  take  acknowledg- 
ments. Every  corporation  must  record  its  articles  of  incorporation  in  the 
office  of  the  county  recorder  of  the  county  where  the  principal  place  of 
business  of  said  corporation  within  the  Territory  is  located,  and  a  certified 
copy  thereof  must  be  filed  in  the  office  of  the  Territorial  auditor.  The 
articles  must  be  published  at  least  six  times  in  some  newspaper  published 
in  the  county  in  w^hich  the  principal  place  of  business  is  located  or  works 
established,  and  an  affidavit  of  publication  must  be  filed  in  the  office  of 
the  Territorial  auditor,  stating  tliat  such  i)ublication  has  been  made  according 
to  law.  The  statute  expressly  provides  that  the  corporation  may  commence 
business  as  soon  as  its  articles  of  incorporation  are  filed  for  record  in  the 
office  of  the  county  recorder  and  a  certified  copy  with  the  Territorial  auditor, 
and  its  incorporation  shall  then  be  complete  if  the  publication  is  made  and 
an  affidavit  thereof  filed  in  the  office  of  the  Territorial  auditor  within  three 
months  after  date  of  the  filing  with  the  county  recorder.  The  act  provides 
(Id.  sees.  770,  780)  that  there  shall  be  no  collateral  inquiry  into  the  legality 
of  the  corporate  existence. 

G.  Corporate  Indebtedness.  —  Must  not  exceed  two-thirds  of  capital 
stock  (sec.  7<i7). 

7.  Organization  Tax.  —  Tiiere  is  no  organization  ta.x  iTiijtosed. 

8.  Filing  and  Recording  Fees.  —  For  filing  articles  of  incorporation  with 
the  Territorial  auditor,  SI**;  for  filing  affidavit  of  publication  of  articles 
with  same  officer,  §:>  ;  for  filing  aiipointincnt  of  statutory  agent  with  Terri- 
torial auditor,  iJS  ;  .same  oflicers'  fees  for  issuing  certified  copy  of  (he  articles, 
where  they  do  not  exceed  one  thousand  words,  Sj-'i  ;  cost  of  publishing  articles 
of  incorporation  of  the  average  length  of  one  thousand  words,  !|7..')0;  for 
recording  articles  in  local  county  recorder's  oflice  where  length  does  not  exceed 
one  thousand  words,  about  •'?6.10,  which  includes  certified  copy  for  filing  in 
auditor's  oliice. 

9.  Commencing  BuBlness  (Id.  sec.  709). — The  corporation  may  com- 
mence business  as  soon  as  the  articles  of  incorporation  are  filed  for  record  in 

221 


INCOnrORATIONT    AND    ORGANIZATION    OF    CORPORATIONS. 

the  office  of  the  county  recorder,  and  a  certiiied  copy  with  the  Territorial 
auditor.  No  specitied  amount  of  capital  stock  need  be  subscribed  for  or  paid 
in  before  commencing  business.  Business  must  commence  within  five  years 
from  the  time  the  charter  is  issued  (Id.  sec.  774). 

1().  Orgauizatioii  Meetings.  —  These  must  be  held  within  the  Territory 
after  tlio  articles  are  filed  and  recorded  as  required  by  law.  The  organiza- 
tion meeting  should  be  held  at  the  principal  place  of  business  within  the 
Territory  as  designated  in  the  articles. 

Chase  r.  Fleming,  Pac.  Rep.  1904.    (Not  yet  reported.) 

11.  Meetings.  Stockholders'  and  Directors'.  — There  is  no  statute  au- 
thorizing stockholders'  meetings  to  be  held  without  the  Territory.  With  re- 
sj^ect  to  stockholders'  meetings,  by  inserting  such  a  power  in  tlie  articles  of 
incorporation,  it  is  perhaps  safe  to  hold  stockholders'  meetings  without  the 
State.  Directors'  meetings  may  be  held  within  or  without  the  State,  as  the 
by-laws  may  provide.  In  the  absence  of  any  statute  giving  that  right,  au- 
thority to  vote  by  proxy  at  stockholders'  meetings  should  be  provided  for  in 
the  articles  of  incorporation. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
may  be  any  number  of  directors.  They  need  not  be  stockholders,  and  there 
are  no  residential  requirements. 

h.  Liabilities.  —  There  are  no  statutory  liabilities  imposed  upon  directors. 

13.  Stockholders'  Liabilities.  —  Unless  the  articles  of  incorporation 
specifically  exempt  them  from  lial)ility,  stockholders  are  liable  for  the  debts 
of  the  coi'poration  in  the  proportion  wliich  their  shares  of  stock  bear  to  the 
whole  capital  stock.  Stockholders  are  individually  liable  to  the  amount  of  the 
unpaid  instalments  on  the  stock  owned  by  them  or  transferred  to  them  for 
the  purpose  of  defrauding  creditors,  and  an  execution  against  the  corporation 
to  that  extent  may  be  levied  upon  the  private  property  of  such  stockholder. 
(Id.  sec.  776). 

14.  Stock  Certificates.  —  The  statute  does  not  require  specifically  the 
issuance  of  stock  certificates,  nor  does  it  prescribe  who  shall  sign  the  same. 
This  must  be  regulated  by  the  by-laws.  The  par  value  of  the  stock  certifi- 
cates may  be  any  amount. 

15.  Preferred  Stock.  —  The  statute  does  not  expressly  authorize  the  issu- 
ance of  preferred  stock.  The  Territorial  auditor  permits  the  filing  of  articles 
in  his  office  providing  for  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  The  statute  is  silent  as  to  how  the 
capital  stock  shall  be  paid.  In  the  absence  of  express  provisions  in  the  arti- 
cles authorizing  the  payment  of  stock  in  property  or  services,  stock  must 
be  paid  for  in  money  or  money's  worth. 

17.  Books.  —  The  statute  does  not  require  that  any  books  shall  be  kept 
within  the  Territory.  It  does  require  that  a  transfer  book  shall  be  kept 
showing  the  names  of  the  persons  by  whom  and  to  whom  stock  transfers  are 
made,  the  number  of  shares,  and  the  date  of  the  transfer.  It  shall  also  show 
the  original  stockholders,  their  respective  addresses,  the  amount  wliich  has 
been  paid  in  and  all  transfers  thereof.  Such  books  and  records  or  correct 
copies  thereof,  so  far  as  they  relate  to  the  items  mentioned  above,  shall  be  at 
all  times  subject  to  the  inspection  of  any  stockholder  (Id.  sec.  778). 

18.  Office  and  Agent  (Id.  sec.  7S3).  —  All  corporations  are  required  to 
name  in  their  articles  the  location  of  their  principal  place  of  business  within 
the  Territory.     They  are  also  required  to  appoint  a  bona  Jide  resident  of  the 

222 


SYNOPSIS-DIGEST   OF    INCORPORATION   ACTS. 

Territory  who  has  a  residence  of  three  years'  standing,  as  its  agent  upon  whom 
process  may  be  served  within  the  Territory  (Laws  of  1903,  Act  82). 

19.  Reports.  —  Xo  annual  reports  are  required. 

20.  Anti-Trust  Statute.  — There  is  no  anti-trust  statute  in  force  in  the 
Territory  except  such  as  have  been  passed  by  Congress  and  are  in  force  every- 
where. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  statute  pro- 
vides that  persons  acting  as  a  corporation  under  the  General  Act  shall  be  pre- 
sumed to  be  legally  organized  until  the  contrary  is  shown,  and  no  such  franchise 
shall  be  declared  to  be  actually  null  and  forfeited  except,  in  a  regular  proceed- 
ing brought  for  that  purpose  (Id.  sec.  779).  The  statute  further  provides 
that  any  corporation  organized  or  attempted  to  be  organized  under  the  Gen- 
eral Act  shall  cease  to  exist  by  non-user  of  its  franchises  for  five  vears  at  any 
one  time  (Id.  sec.  774).  Charter  may  be  forfeited  for  failure  to  appoint  and 
maintain  resident  agent  (Laws  of  1903,  Act  82). 

22.  Amendments  (Id.  sec,  770).  —  Capital  stock  may  be  increased  or 
decreased  and  articles  may  be  amended  in  any  particular  by  the  affirmative 
vote  of  a  majority  of  the  stockholders.  Such  amendments  shall  be  signed  and 
acknowledged  by  the  president  and  attested  by  the  secretary  of  the  corporation, 
and  must  be  recorded  and  published  in  tlie  sanie  manner  as  the  original  articles. 

23.  Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax. 

24.  Extension  of  Corporate  Existence.  —  May  extend  corporate  exist- 
ence for  an  additional  period  of  twenty-five  years  (Id.  sec.  771). 

25.  Dissolution.  —  Corporations  may  be  dissolved  by  a  majority  vote  of 
its  members  uidess  a  different  rule  is  adopted  in  the  articles  of  incorporation 
(Id.  sees.  772,  775). 

26.  Foreign  Corporations.  —  Before  transacting  business  in  the  Territory 
foreign  corporations  must  file  a  certified  copy  of  their  articles  of  incorporation 
or  charter,  and  the  appointment  of  an  agent  ui)on  whom  service  may  be 
served,  with  the  auditor  of  the  Territory  and  with  the  county  recorder  of  each 
county  in  which  it  does  business  or  has  an  office.  It  must  also  publish  at  least 
six  times  in  some  newspaper  j)ub]ished  in  each  of  said  counties  a  copy  of  its 
articles  of  incorporation,  and  upon  the  expiration  of  such  jniblication  file  an 
affidavit  thereof  in  the  office  of  the  Territorial  auditor.  The  appointment  of 
the  agent  must  be  by  the  board  of  directors.  Fees  for  filing  and  recording 
are  the  .same  as  for  domestic  corporations  (Id.  sees.  909-925). 

Babbitt  v.  Field,  52  Pac.  775. 

ARKANSAS. 

(The  references  cited  are  to  Sandel3&  Hill's  Digest,  1894,  chap.  47,  unless  otherwise  staled.) 

1.  Statute  under  which  Business  Corporations  may  incorporate. 

The  GcMfral  Incorporation  Act  of  Arkansas  is  to  be  found  in  Sandels  &  Hill's 
Digest,  chap.  47,  sees.  l;522-1358,  1425-1434,  and  acts  amendatory  thereof. 
Special  acts  exist  for  the  incorporation  of  navigation,  turnpike,  jilank  road, 
railway,  raft,  and  booming  corporations,  as  well  as  those  incorporated  for  elee- 
mo.synary  purposes. 

2.  Incorporators  (Sandels  &  Hill's  Digest,  1894,  sec.  1320).  —  Three  or 
more.     There  are  no  residential  nrjiiircnifiits. 

3.  Contents  of  the  Articles  of  Association  (Id.  sees.  1327-1328). The 

articles  of  association  must  contain  : 

a.    Name.  —  Any  name  permitted. 

223 


INCORPORATION    AND    ORGANIZATION    OP   CORPORATIONS. 

h.    Incorporators.  —  Names  and  resitlonces  of  the  incorporators. 

c.  Domiciliari/  Ojjice.  —  The  location  of  the  [jrincipal  place  of  business  and 
the  otBce  of  the  company  for  the  transaction  of  business  within  the  State. 

</.  Purposes.  —  Persons  desiring  to  incorporate  under  the  General  Act 
may  do  so  for  tlie  purpose  of  "  engaging  in,  or  carrying  on,  any  kind  of  manu- 
facturing, mochanical,  or  other  lawful  business,"  not  provided  for  by  the 
special  incorporation  acts  referred  to  above. 

The  CJeueral  Act  was  originally  framed  with  the  intention  of  limiting  the 
business  to  be  pursued  by  the  corporation  to  one  purpose  (Id.  sec.  1331),  but 
in  the  amendment  which  took  effect  Feb.  12,  1903,  the  word  "purposes  "  is 
used,  which  undoubtedly  permits  corporations  to  be  now  formed  for  more 
than  one  line  of  business.  There  has  been  no  amendment,  however,  to  sec. 
132S,  unless  the  amendment  above  referred  to  by  implication  also  amends 
sec.  1328,  which  reads  as  follows:  "  The  purpose  for  which  every  such  corpora- 
tion shall  be  established  shall  be  designated  in  their  articles  of  association, 
and  it  shall  not  be  lawful  for  such  corporation  to  direct  its  operations  or  ap- 
propriate its  funds  for  any  other  purpose."  The  Secretary  of  State  permits 
the  insertion  of  as  many  purposes  as  are  desired,  provided  they  are  not  covered 
by  special  acts. 

e.  Capital  Stock.  —  The  amount  of  capital  stock  nmst  be  stated.  There 
is  no  limit  as  to  what  this  amount  may  be.  The  amount  of  capital  stock  sub- 
scribed for  by  the  several  incorporators  must  be  set  forth,  and  this  should  be 
followed  by  a  provision  that  the  residue  of  the  capital  stock  may  be  issued  and 
disposed  of  as  the  board  of  directors  may  from  time  to  time  order  and  direct. 

f.  Number  and  Par  Value  of  Shares.  —  The  par  value  of  the  shares  must 
beS25  (Id.  sec.  1327). 

g.  Directors.  —  The  number  of  the  directors  must  be  set  forth,  together 
with  the  provision  that  they  shall  all  be  stockholders  of  the  corporation,  and 
to  this  should  be  added  a  provision  that  the  board  of  directors  shall  elect  one 
of  its  members  president  and  another  as  vice-president,  and  shall  also  elect  a 
secretary  and  treasurer.  The  number  of  directors  may  be  any  number  not 
less  than  three.  There  are  no  residential  reipiirements,  but  they  must  be 
stockholders,  and  must  be  chosen  annually  by  the  stockholders  at  such  time 
and  place  as  shall  be  provided  by  the  by-laws  of  the  corporation  (Id.  sec. 
1330).  The  president  is  a  statutory  officer  and  must  be  a  director.  The  sec- 
retary and  treasurer  are  also  statutory  officers,  but  need  not  necessarily  be 
directors.  The  last  two  named  must  reside  and  have  their  place  of  business 
■within  the  State. 

h.  First  Election  for  Directors.  —  This  clause  should  provide  that  the  first 
election  for  directors  shall  be  held  immediately  after  the  organization  of  the 
corporation,  and  that  the  directors  shall  serve  for  one  year  and  until  their  succes- 
sors are  elected. 

i.  Powers  of  the  Board  of  Directors.  —  This  clause  may  provide  that  the 
board  of  directors  are  empowered  to  establish  all  by-laws  and  regulations 
nece.ssary  to  the  management  of  the  business  and  affairs  of  the  corjioration 
and  to  alter  and  repi^al  the  same  at  pleasure. 

j.  Organization  Meeting.  —  This  clause  should  fix  a  time  and  place  for  the 
holding  of  the  organization  meeting,  and  should  contain  a  waiver  by  the 
incorporators  of  the  notice  of  such  meeting. 

k.  Corporate  Existence.  —  Corporate  existence  under  the  statute  ia  perpet- 
ual.    The  period  of  existence  is  not  required  to  be  stated. 

4.  Statutory  Powers.  —  The  statutory  powers  found  in  the  General  In- 
224 


SYNOPSIS-DIGEST    OF   INCORPORATION   ACTS. 

rorporation  Act  are  the  usual  common  law  powers  of  corporations  (Id.  sees. 
1336,  1340).  There  is  a  statutory  lien  given  the  corporation  upon  the  stock 
of  its  members  for  debts  due  it.     Voting  by  proxy  is  permitted. 

S.  W.  Co.  V.  Bank,  68  Ark.  234;  57  S.W.  2.57  ;  Conway  et  al.  ex  parte,  \  Ark.  302. 

5.  Procuring  the  Charter.  —  The  articles  of  association,  drawn  in  accord- 
ance with  the  form  above  set  forth  (sec.  HI),  must  be  signed  by  all  the  incor- 
porators. The  statute  does  not  require  that  the  execution  of  the  same  should 
be  acknowledged.  The  incorporators  must  meet  and  hold  their  organization 
meeting  at  the  time  set  forth  in  the  articles  of  association.  At  that  meeting 
they  will  proceed  to  the  election  of  a  board  of  directors  and  the  adoption  of 
by-laws  for  the  corporation.  The  directors  must  then  meet  and  elect  a  presi- 
dent, secretary,  and  treasurer,  and  such  other  officers  as  the  by-laws  of  the 
corporation  shall  prescribe.  The  corporate  existence  appears  to  begin  as 
soon  as  this  last  step  has  been  complied  with,  but  the  statute  provides  further 
(Id.  sec.  1344)  that  before  the  corporation  shall  commence  business  the 
president  and  directors  thereof  shall  file  a  proper  copy  of  their  articles  of 
association  at  full  length,  and  record  a  certificate  setting  forth  the  purposes  for 
which  such  corporation  is  formed,  the  amount  of  its  capital  stock,  the  amount 
actually  paid  in,  and  the  names  of  its  stockholders  and  the  number  of  shares 
by  each  respectively  owned,  with  the  county  clerk  of  the  county  in  which  the 
corporation  is  to  have  its  principal  place  of  business,  and  shall  file  such  articles 
and  certificates  bearing  the  endorsement  of  the  county  clerk  in  the  office  of 
the  Secretary  of  State.  After  recording  the  same,  the  Secretary  of  State  is 
authorized  to  issue  a  certificate  of  incorporation,  which  certificate  or  certified 
copy  thereof  is  prima  facie  evidence  of  due  incorporation  (sec.  1344  as 
amended  by  Laws  of  1903,  Act  XVIII.). 

G.  Corporate  Indebtedness.  —  There  is  no  limit  prescribed  by  statute 
to  the  creation  of  corporate  indebtedness.  To  create  a  bonded  indebtedness 
the  consent  of  the  larger  amount  in  value  of  stock  must  be  obtained  at  a 
meeting  duly  called  for  that  purpose.  Bonds  cannot  be  issued  except  for 
money  or  property  actually  received  or  labor  done,  and  all  fictitious  increase 
of  indebtedness  is  void  (Cons.,  Art.  XI I.  sec.  8). 

7.  Organization  Tax  (M.  sec.  3299).  —  The  organization  tax  on  any 
capitalization  is  S2."j. 

8.  Filing  and  Recording  Fees  (Id.  sec.  292). — For  filing  articles  of 
association  and  certificate  of  incorporation  in  the  office  of  the  Secretary  of 
State,  825.  For  issuance  of  certificate  of  incorporation,  S5.  Certified  copy 
of  articles,  15  cents  per  folio.  The  average  fees,  in  the  smaller  counties  to  the 
county  clerk,  for  filing  articles  of  association  and  certificate  of  incorporation, 
82.20.  In  some  of  the  more  thickly  populated  counties  tli»;  county  recording 
fee  often  reaches  85  for  articles  of  average  length  (Laws  of  1903,  Act  XVIII.). 

9.  Commencing  Business  (Id.  sec.  1:534).  —  Corporations  may  com- 
mence business  as  .soon  as  the  president  and  board  of  directors  have  filed  a 
true  copy  of  the  articles  of  a.ssociation  and  the  certificate  referred  to  in  sec.  5 
above. 

Garnett  et  al  v.  Richardson  et  nl.,  35  Ark.  144  ;  Coiinor  v.  Al)hott,  35  Ark.  305  ; 
Ulackwell  r.  State,  3f,  Ark.  178. 

10.  Organization  Meeting  (Id.  s.c.  1329).  — The  organization  meeting 
must  be  lield  within  the  State.  Each  iiicorporatf)r  is  presumed  to  be  a  stock- 
holder to  at  least  the  extent  of  one  share.    It  is  usual  to  fix  the  time  and  place 

15  225 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

for  the  lioliling  of  the  organization  meeting  in  the  articles  of  association. 
In  the  absence  of  any  snch  provision,  two  of  the  incorporators  may  call  the 
first  meeting  at  such  time  and  place  as  they  may  apj)oint  by  giving  notice 
tliereof  in  any  one  or  more  newspapers  published  in  the  county  in  whicli  such 
corporation  is  to  be  established  or  any  adjoining  county  at  least  fifteen  days 
before  the  time  appointed  for  such  meeting  (Id.  sec.  13"29).  The  duty  of 
the  incorporators  is  to  adopt  by-laws  and  elect  a  board  of  directors.  Immedi- 
ately after  the  incorporators'  and  stockholders'  meeting  adjourns,  a  meeting 
of  the  board'of  directors  should  be  held  for  the  purpose  of  electing  a  presi- 
dent, secretary,  and  treasurer,  and  such  other  officers  as  may  be  required  by 
the  by-laws. 

11.  Meeting  of  Stockholders  and  Directors  (Id.  sec.  1329).  —  In  the 
absence  of  any  statute  providing  otherwise,  all  stockholders'  meetings  must 
be  held  within  the  State.  Directors'  meetings,  after  the  first  meeting,  may  be 
held  within  or  without  the  State  as  the  by-laws  may  provide. 

Bank  V.  McCarthy,  .55  Ark.  473  ;  18  S.  W.  759;  Blackwell  v.  State,  36  Ark.  178. 

12.  Directors' Qualifications  and  Liabilities,  a.  Qiialijtcations.  —  There 
must  be  at  least  three  directors  who  shall  be  stockholders.  There  are  no 
residential  requirements  (Id.  sec.  1330.) 

Jones  et  al.  v.  Jarman,  34  Ark.  323 ;  Worthen  v.  Griffith,  59  Ark.  562 ;  28  8.  W. 
286. 

b.  Liahilities .  —  Directors  are  jointly  and  severally  liable  for  the  declaration 
and  payment  of  a  dividend  when  tlie  corporation  is  insolvent  or  the  payment 
of  which  would  render  it  insolvent,  knowing  such  corporation  to  be  insolvent 
or  that  the  payment  of  such  dividend  would  render  it  so,  for  all  debts  due 
from  such  corporation  at  the  time  of  the  payment  of  such  dividend.  They  are 
also  jointly  and  severally  liable  for  all  debts  of  the  corporation  contracted 
during  the  period  when  they  shall  neglect  or  refuse  to  comjily  with  any  of  the 
provisions  of  the  incorporation  act  imposed  upon  them.  If,  by  reason  of  the 
violation  of  any  of  the  provisions  of  the  act  by  the  directors,  a  corporation 
shall  become  insolvent,  then  all  directors  ordering  or  assenting  to  such  viola- 
tion shall  be  jointly  and  severally  liable  for  all  corporate  debts  contracted 
after  such  violation  (Id.  sees.  1347-1351). 

Simon  v.  Association,  54  Ark.  58;  14  S.  W.  1101 ;  Bank  v.  McCarthy,  55  Ark.  473; 
18  S.  \V.  759. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  debts  of 
the  corporation  only  to  the  extent  of  the  unpaid  stock  subscribed  for  or  held 
by  them.  The  corporation  may,  by  the  adoption  of  a  proper  by-law,  place  a 
lien  upon  the  shares  of  its  stockholders  for  any  debt  or  liability  they  may 
incur  to  the  company.  The  statute  (Id.  sees.  1352,  13.53)  provides  a  method 
for  the  enforcement  of  this  lien.  If  the  capital  stock  should  be  withdrawn 
or  refunded  to  the  stockholders  before  the  payment  of  all  the  debts  of  the 
corporation  for  which  such  stock  would  have  been  lialde,  the  stockholders 
are  lial)le  to  any  creditor  of  the  corporation  for  the  amount  of  the  sum  re- 
funded to  them  respectively  (Id.  1348). 

Jones  et  al.  v.  Jarman,  34  Ark.  323  ;  Worthen  v.  Griffith,  59  Ark.  562  ;  28  S.  W.  286. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him.     Stock  certificates  may  be  signed  by  such  officers  as 

220 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

the  by-laws  may  provide.     The  par  value  of  the  shares  must  be  325,  except  in 
the  case  of  railroad  corporations,  when  they  may  be  $100. 

15.  Preferred  Stock.  —  There  are  no  special  provisions  relating  to  the 
issuance  of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Under  the  constitution  capital  stock 
can  be  issued  only  for  money  and  property  actually  received  or  labor  done 
(Cons.,  1874,  Art.  Xll.  sec.  8;  Laws  of  lUOo,  chap.  2.5;3). 

Career  v.  Company,  54  Ark.  576,  16  S.  W.  .579  ;  Fletcher  v.  Bank,  Ark. ;  69  S.  \V. 
580, 

17.  Books.  —  The  books  must  be  kept  within  the  State  at  the  principal 
office  of  the  corporation  therein  or  at  the  office  of  the  treasurer  within  the 
State  (Id.  sec.  1:541).  The  statute  gives  to  all  stockholders  the  right  to 
inspect  and  examine  the  same  (Id.  sec.  1341). 

18.  OfiBce. — The  corporation  must  maintain  an  office  within  the  State, 
and  its  secretary  and  treasurer  must  reside  therein  (Id.  sees.  13;32,  1:341). 

10.  Reports.  —  At  least  once  a  year,  by  order  of  the  directors,  a  true 
statement  of  the  accounts  of  the  corporation  shall  be  made  to  the  stock- 
holders (Id.  sec.  1311).  In  addition  to  this  the  president  and  secretary 
shall  annually  make  a  certificate  showing  the  condition  of  the  affairs  of  the 
company  on  the  first  d.iy  of  January  or  of  July  next  preceding  the  time  of 
tiie  making  of  the  said  certificate  in  the  following  particulars,  to  wit  :  the 
capital  stock  paid  in,  the  value  of  its  real  estate,  its  personal  estate,  the  amount 
of  its  debts,  the  name  and  number  of  shares  held  by  each  stockholder.  This- 
certificate  must  be  deposited  on  or  before  the  15th  day  of  February  or  August 
with  the  county  clerk  of  the  county  within  which  said  corporation  transacts 
its  business,  who  shall  record  the  same  at  length  in  a  book  to  be  kept  by  him 
for  that  purpose  (Id.  13:37).     The  charge  for  recording  is  ten  cents  per  folio. 

Neb.  Nat.  Bank  v.  Wal.sh,  68  Ark.  433  ;  59  S.  W.  952. 

20.  Anti-Trust  Statute.  —  Under  the  Act  of  March  16,  1897,  and  IVIarch 
6,  1899,  all  trusts  or  combinations  intended  to  restrain  competition  in  the  im- 
portation or  manufacture  of  articles  of  domestic  growth,  and  all  such  trusts 
or  combinations  which  tend  to  advance,  reduce,  or  control  the  prices  or  the 
cost  to  the  consumer,  are  declared  to  be  against  public  policy  and  void. 

21.  Statutory  Ground  for  Forfeiture  of  Charter.  —  The  only  ground 
for  forfeiture  of  charter  proscrilied  by  liie  statute  in  Arkansas  is  for  any  vio- 
lation of  the  anti-trust  statute. 

Darnf-ll  >:  State,  48  Ark.  321 ;  3  S.  W.  363  ;  State  r.  Bank,  5  Ark.  595 ;  Blaokwell 
V.  State,  36  Ark.  178  ;  Browu  i'.  \ly.  Co.,  68  Ark.  134 ;  56  S.  W.  862. 

22.  Amendments.  —  The  power  of  amendment  in  Arkansas  is  broad,  but 
is  also  sotniiwliat  c()m[)licated.  To  reduce  the  capital  stock  either  by  releas- 
ing unpaid  subscriptions  for  stock  or  by  returning  to  the  shareholders  a  por- 
tion (if  the  amount  paid  in  by  them,  such  reduction  must  be  made  by  a 
resolution  duly  adopted  by  a  majority  of  the  stockholders,  and  a  copy  of  such 
rosointion  must  be  filed  as  amendnient  to  the  charter  in  the  offices  of  the 
Secretary  of  State,  and  the  county  clerk  of  the  county  in  which  the  corpora- 
tion transacts  business,  and  sncli  amendment  must  Ix;  jmhlished  once  in 
some  newspaper  published  within  the  county.  To  anthnri/.o  the  corporation 
to  engage  in  additional  lines  of  business,  the  stockholijers  must  authorize 
such  change  by  a  majority  vote  at  a  meeting  duly  called  for  that  purpose. 
Then  the  president  and  directors  shall  cause  such  of  the  amended  articles  as 

227 


INCORrORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

specify  the  purposes  for  which  the  corporation  is  formed,  subscribed  by  the 
stoclvhoklors,  to  be  published  in  a  newspaper  printed  in  the  county  in  which 
sucli  corporation  is  located,  or  any  adjoining  county,  and  shall  also  make  a 
certificate  of  the  purpose  for  which  such  corporation  is  formed  as  changed  by 
the  amended  articles,  which  certificate  shall  be  signed  and  deposited  and  re- 
corded in  the  same  manner  as  the  original  certificate.  To  increase  the  cap- 
ital stock  such  increase  must  be  voted  for  by  a  majority  of  the  stockholders 
at  a  meeting  specially  called  for  that  purpose.  After  the  increase  is  approved 
tlic  president  and  directors  shall  within  thirty  days  tliereafter  make  a  cer- 
tificate thereof  which  must  be  signed,  deposited,  and  recorded  the  same  as  the 
original  certificate.  By  the  Act  of  April  11,  1901,  a  corporation  may 
change  its  name  and  number  of  directors  by  a  resolution  of  the  stockholders 
duly  adopted  by  a  majority  thereof  at  a  meeting  called  for  that  purpose.  A 
copy  of  such  resolution  duly  certified  by  the  president  and  secretary  must  be 
filed  with  the  clerk  of  the  county  court  of  the  county  in  which  the  princi- 
pal place  of  business  is  located,  and  also  with  the  Secretary  of  State.  To 
change  its  principal  place  of  business  within  the  State  to  a  county  within  the 
State  the  president  and  secretary  must  procure  from  the  county  clerk  of  the 
county  where  it  is  removed  a  certified  copy  of  the  records,  of  its  articles  of 
association,  etc.,  to  which  certified  copy  shall  be  attached  the  certificate  of 
sucli  president  and  secretary  that  such  corporation  is  thus  removed,  which 
certified  copy  of  the  certificate  must  be  filed  and  recorded  in  the  office  of  the 
county  clerk  of  the  county  in  which  such  corporation  shall  be  removed.  A 
similar  certified  copy  of  the  certificate  must  be  filed  in  the  office  of  the  sec- 
retary in  such  State.  A  duplicate  copy  of  such  certificate  must  be  published 
in  a  newspaper  in  the  county  in  which  such  corporation  shall  be  located.  If 
the  removal  is  from  one  county  to  another,  there  must  be  two  publications, 
one  in  a  newspaper  in  each  county  (Id.  1327,  1343). 
Brown  v.  "W.  &  S.  E.  Ry.  Co.,  68  Ark.  134;  56  S.  W.  862. 

23.   Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax. 

21.    Extension  of  Corporate  Existence.  —  There   is   no  provision  for 

extension  of  corporate  existence. 

25.  Dissolution.  —  Corporations  may  be  dissolved  by  application  to  the 
courts  having  equitable  jurisdiction.  Any  corporation  may  surrender  its 
charter  by  resolution  of  a  majority  in  value  of  the  stockholders,  at  a  meet- 
ing duly  called  for  that  purpose,  and  filing  a  certified  copy  of  such  resolution 
in  the  office  of  the  Secretary  of  State,  and  in  the  office  of  the  county  clerk  of 
the  county  where  the  principal  place  of  business  of  such  corporation  is  lo- 
cated (Id.  sees.  1429-1434). 

Town  of  Searcy  v.  Yarnell,  47  Ark.  269;  1  S.  W.  319;  Dozier  v.  A.  C.  Mills,  67 
Ark.  11  ;  53  S.  W.'403. 

26.  Foreign  Corporations.  —  To  transact  business  within  the  State, 
foreign  corporations  must,  throu'^h  their  president,  file  in  the  office  of  the 
Secretary  of  State  and  with  the  county  clerk  of  the  county  in  which  the  cor- 
poration has  an  office  for  the  transaction  of  business,  a  copy  of  the  articles  of 
incorporation,  and  shall  also  file  in  these  offices  within  six  months  after  the 
establishment  of  said  office,  or  of  the  beginning  of  said  business  iu  the  State, 
a  statement  showing  the  proportionate  amount  of  its  capital  stock  which  it 
has  in  use  in  the  operation  of  its  business,  both  in  the  State  and  in  the  county 
in  which  it  ia  doing  business.     The  penalty  for  not  complying  with  this  pro- 

228 


SYNOPSIS-DIGEST   OP   INCORPORATION   ACTS. 

vision  is  that  it  is  cut  off  from  all  recourse  to  the  courts  and  is  subject  to 
fine.  Such  corporation  must  also,  under  the  hand  of  the  president  and  seal 
of  the  corporation,  file  in  the  office  of  the  Secretary  of  State  a  designation  of 
an  agent  (who  must  be  a  citizen  of  the  State)  upon  whom  service  of  summons 
and  other  process  may  be  made.  Such  certificate  shall  also  state  the  princi- 
pal place  of  business  of  such  corporation  within  the  State.  The  corporation 
must  also  pay  into  the  treasury  of  the  State,  the  same  fees  required  of  domestic 
corporations.  The  cost  of  filing  articles  and  certificates  and  for  certified  copy 
thereof  is  $28.50  (Id.  sec.  1322). 

Gunn  V.  Company,  57  Ark.  24;  20  S.  W.  591  ;  Scruggs  v.  Company,  54  Ark.  566; 
16  S.  W.  563 ;  St,  L.,  etc.  Ry.  Co.  v.  Fire  Ass'n,  60  Ark.  325  ;  30  S.  \V.  350 ;  Buffalo 
Zinc  &  Copper  Co.  i;.  Crump,  70  Ark.  525  ;  69  S.  W.  572  ;  W.  II.  Lumber  Co.  v.  Imple- 
ment Ass'n,  55  Ark.  625;  18  S.  W.  1055;  Boyingtou  v.  Van  Etten,  62  Ark.  63;  35 
8.  W.  622;  Railway  v.  Fire  Ass'n,  55  Ark.  163  ;  18  S.  W.  43;  Woodson  v.  State,  69 
Ark.  521  ;  65  S.  W.  465. 


CALIFORNIA. 

(The  references  cited  below  are  to  the  Civil  Code,  unless  otherwise  stated.) 

1.  Statute  under  w^hich  Business  Corporations  may  incorporate. — 

The  Civil  Code  of  California,  Part  IV.  sees.  28;5-403  as  amended  in  certain 
respects  by  subsequent  Se.ssion  Laws  constitutes  the  General  Incorporation  Act 
of  the  State  of  California  for  business  corporations.  There  are  special  acts  ap- 
plicable only  to  insurance,  railway,  street  railway,  wagon  road,  bridge,  ferry, 
wharf,  chute,  pier,  telegraph,  telephone,  water,  canal,  homestead,  savings  and 
loan,  mining,  gas,  and  eleemosynary  corporations,  but  any  kind  of  a  business 
corporation  may  be  incor])orated  under  the  General  Act. 

2.  Incorporators.  — There  may  be  any  number  of  incorporators  not  less 
than  five,  a  majority  of  whom  must  reside  in  the  State  (C  C,  sees.  285,  292). 

People  V.  Company,  97  Cal.  276  ;  32  Pac.  236. 

3.  Contents  of  the  Articles  of  Incorporation  (C.  C,  sec.  290,  as 
amended  by  Laws  of  1901,  chaps    147  and  201).  —  The  articles  must  contain: 

a.    Name.  —  The  use  of  a  name  identical  with  that  or  similar  to  that  of  an 
existing  domestic  corporation  is  forbidden  (C.  C,  sec.  29G). 
Curtiss  V.  Murray  et  uL,  26  Cal.  633. 

h.  Purposes.  — The  statute  as  well  as  the  constitution  (Cons.,  Art.  XII. 
sec.  9)  apparently  contemplates  incorporation  for  only  one  purpose  or  for  one 
line  of  business. 

c.  DomiciUnry  Office.  —  The  location  (jf  an  oflTice  within  the  State  where  its 
principal  business  is  to  be  transacted. 

(I.  Corporate  Existence.  —  The  term  for  which  it  is  to  exist  not  to  exceed 
fifty  years. 

e.  Directors.  —  Number  of  directors  not  less  than  five,  together  with  the 
names  and  resiliences  of  tho.se  who  are  appointed  for  the  first  year.  The 
directors  must  be  stockholders,  and  a  majority  resiiicnts  of  the  State. 

f.  Capital  Stock.  —  The  amount  of  capital  stock,  which  may  be  any 
amount.  The  number  of  shans  must  also  be  stated,  the  par  value  of  which 
must  not  be  less  than  l?l  nor  more  than  i^lOO. 

«/.    Original  Stock  Subscriptions.  —  The  amount  actually  subscribed  and  by 

229 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

whom.     Tliero  need  be  no  particular  amount  subscribed  beyond  tlie  one  share 
required  for  each  of  the  incorporators. 

Harris  t7  at.  v.  McGregor,  29  Cal.  125  :  Ex  parte,  S.  v.  W.  W.,  17  Cal.  132  ;  People 
V.  Coiiipany,  45  Cal.  306;  People  v.  Perriu,  56  Cal.  345;  People  v.  Compauy,  97  Cal. 
276;  32  Pac.  236. 

4.  Statutory  Powers  (C.  C,  sees.  283,  354,  355).  —  In  addition  to  the 
statutory  enumeration  of  the  common  law  powers  of  corporations  (C.  C,  sec. 
3.')4)  there  are  some  express  limitations  upon  the  ordinaiy  corporate  powers. 
One  is  the  provision  that  no  corporation  shall  acquire  or  hold  any  more  real 
property  than  may  be  reasonably  necessary  for  the  transaction  of  its  business 
or  the  construction  of  its  works.  The  bonded  indebtedness  of  a  corporation 
may  be  created  or  increased  by  a  vote  of  the  stockholders  representing  at 
least  two-thirds  of  the  subscribed  capital  stock  at  a  meeting  called  by  the 
board  of  directors,  and  after  publishing  notice  of  such  meeting  once  a  week 
for  at  least  sixty  days,  which  notice  shall  state  the  amount  of  bonded  indebt- 
edness which  it  is  proposed  to  create,  or  the  amount  to  which  it  is  proposed 
to  increase  the  said  indebtedness.  The  necessity  of  publication  may  be  ob- 
viated by  written  consents  from  the  holders  of  two-thirds  of  tlie  outstanding 
capital  stock  (C.  C,  sec.  359).  Domestic  mining  corporations  possessing 
mining  claims  adjoining  each  other  may  consolidate  in  such  manner  and  upon 
such  terms  as  may  be  agreed  upon,  provided  the  written  consent  of  all  the 
stockholders  representing  two-thirds  of  the  capital  stock  of  each  corporation 
is  first  obtained,  and  provided  the  statutory  requirements  relative  to  calling 
meetings,  publishing  notice  thereof,  etc.  are  complied  with  (C.  C,  sec.  361). 
Only  so  much  real  property  as  is  necessary  for  tlie  transaction  of  corporate 
business  can  be  held  (C.  C,  sec.  360;  also  Session  Laws,  1875-76,  chap.  653). 

The  following  additional  powers  are  conferred  :  To  authorize  voting  by 
proxy,  to  permit  cumulative  votinof  in  the  election  of  directors,  and  to  forfiiit 
stock  for  non-payment  of  assessments  (Cons.,  Art.  XII.  sec.  12;  C  C,  sees. 
307,  312,  3:31-3-49;  Laws  of  1903,  cliap.  21.5).  Also  to  sell  and  dispose  of  all 
the  corporate  assets  with  the  consent  of  two-thirds  of  the  stockholders  (Laws 
of  1903,  chap.  271).  Also  to  remove  directors  (sec.  310).  To  accept  devises 
(Laws  of  1903,  chap.  223). 

See  Smith  v.  Morse,  2  Cal.  524 ;  Smith  v.  Company,  6  Cal.  1  ;  Knovvles  v.  Sander- 
cock,  107  Cal.  629  ;  40  Pac.  1047  ;  Tel.  Co.  v.  Tel.  Co.,  22  Cal.  398  ;  Union  Water  Co. 
V.  Murphy  Co.  et  al.,  22  Cal.  621. 

5.  Procuring  the  Charter.  —The  articles  must  be  signed  and  acknowl- 
edged by  each  of  the  five  or  more  incorporators,  a  majority  of  whom  must 
be  residents  of  the  State  (C.  C,  sec.  292).  Next,  the  articles  must  be  filed 
in  the  office  of  the  county  clerk  of  the  county  in  which  the  principal  busi- 
ness of  the  company  is  to  be  transacted,  and  a  copy  thereof,  certified  by  the 
county  clerk,  must  be  filed  with  the  Secretary  of  State  (C.  C,  sec.  296). 
Before  the  articles  can  be  filed  with  the  latter  the  organization  tax  (see 
below)  must  be  paid.  When  such  tax  is  paid  and  the  articles  duly  filed 
with  the  Secretary  of  State,  the  latter  issues  to  the  corporation,  over  the  Great 
Seal  of  the  State,  a  certificate  that  a  copy  of  the  articles  containing  the  re- 
quired statement  of  facts  has  been  filed  in  his  office,  and  the  statute  then  pro- 
vides that  the  persons  signing  the  articles  and  their  associates  and  successors 
shall  thereupon  be  a  body  politic  and  corporate  by  the  name  stated  in  the 
certificate  (C.  C,  sec.  296;  Laws  of  1901,  chap.  201).  The  due  incorporation 
of  any  company  claiming  in  good  faith  to  be  a  corporation,  doing  business 

230 


SYXOPSTS-DIGEST    OF   INCORPORATION   ACTS. 

as  such,  and  its  right  to  exercise  corporate  powers  shall  not  be  inquired  into 
collaterally  in  any  private  suit  to  which  such  de  facto  corporation  may  be  a 
party,  but  such  inquiry  may  be  had  at  the  suit  of  the  State,  except  in  those 
cases  where  the  corporation  has  been  doing  business  for  ten  consecutive  years 
as  a  corporation  (C.  C,  sec.  358  ;  Laws  of  1901,  chap.  206). 

Martin  v.  Deetz,  102  Cal.  55;  36  Pac.  3G8;  Kondell  v.  Fay,  32  Cal.  354  ;  Water- 
works V.  San  Francisco,  22  Cal.  441. 

6.  Organization  Tax.  —  If  the  capital  stock  does  not  exceed  §25,000,  815; 
if  not  over  §75,000,  §25;  if  not  over  $200,000,  $50  ;  if  not  over  .$500,000,  875  ; 
if  not  over  §1,000,000,  $100;  if  over  $1,000,000,  $150  (Laws  of  lUOl,  chap. 
70,  amending  C.  C,  sec.  416). 

7.  Filing  and  Recording  Fees.  —  The  Secretary  of  State  is  entitled  to 
no  additional  fee  for  filiiig  articles  of  incorporation  other  than  the  payment 
to  him  of  the  organization  tax,  but  for  recording  such  articles  he  is  entitled 
to  charge  20  cents  per  folio.  For  issuing  certificate  of  incorporation.  $3. 
For  copy  of  articles  of  incorporation  on  file  in  his  office,  20  cents  per  folio, 
and  for  affixing  to  certificate  seal  of  State  thereto,  82.  For  com]-)aring  copy 
of  articles  with  the  original  on  fib  in  his  office,  5  cents  per  folio.  The  county 
clerk  IS  entitled  to  a  fee  of  SI  for  filing  articles  of  incorporation,  and  for 
copy  of  same  10  cents  per  folio,  and  for  certificate  for  same,  50  cents  (Pol. 
Code,  416;  Gen.  Laws,  Title  81,  Stat.  1895,  p.  268). 

8.  Corporate  Indebtedness.  —  Cannot  exceed  amount  of  capital  stock 
(C.  C,  sec.  359,  as  amended  by  Laws  of  1903,  chap.  253). 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  certificate  of  incorporation  is  issued  by  the  Secretary  of  State. 
They  must  commence  business  within  one  year  upon  penalty  of  having  their 
charter  forfeited  by  jtroper  action  commenced  by  the  State  (C.  C,  sec.  358; 
see  also  Laws  of  1901,  chap.  117).  If  the  corporation  has  property  in  other 
counties  than  that  where  its  original  articles  are  tiled,  it  must  within  sixty 
days  after  such  property  is  purchased,  located,  or  held,  file  with  the  clerk  of 
such  counties  certified  copies  of  its  articles  of  incorporation  (C.  C,  sec.  299). 

I'eople  V.  Company,  45  Cal.  30G. 

10.  Organization  Meetings.  —  .\  preliminary  organization  is  effected  by 
the  stockholders'  meeting  within  one  month  after  incorporation  within  the 
State  (by  proxy,  if  desired)  and  proceeding  to  adopt  by-laws.  By-laws  may, 
however,  be  adopted  by  the  written  assent  of  two-third.s  of  the  stockholders 
without  a  meeting  (C.  C,  .sec.  301).  The  by-laws  must  be  certified  b}'  a 
majority  of  the  directors  and  the  secretary,  and  copied  in  the  book  of  by-laws 
(C.  C,  sec.  361). 

Hall  r.  Craiiilall,  29  Cal.  5G8. 

11.  Meetings  of  Stockholders  and  Directors.  —  Meetings  of  both  stock- 
holders and  board  f)f  directors  must  he  lield  at  the  corporation's  office  or 
principal  place  of  Imsiness  (('.   ('.,  sec.   319). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qudli/irntions.  —  There 
must  be  at  least  five  directors  who  shall  be  stockholdt-rs  and  a  majority  of 
whom  shall  be  citizens  of  the  State  (C.  C,  sees.  290,  305;  Laws  of  1901 
chap.  145). 

b.  Liabilities. — Directors  are  jointly  and  severally  liable  to  (he  cn'ditors 
and  stockholders  for  all  monej's  embczzli^d  or  misappropriated  by  tlio  officers 
during  their  term  of  olfice  (Cons.,  Art.  XII.  sec.  3).     They  are  also  jointly 

231 


INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

nnd  sevor.illy  liaMe  to  the  cor]ioration  and  to  the  croditors  to  the  full 
amount  of  the  capital  stock  witlulrawn  as  dividends  wiien  there  are  no 
surphis  profits  (C.  C,  sec.  309).  Thoy  are  also  jointly  and  severally 
liable  where  they  create  debts  beyond  the  subscribed  capital  stock  (C.  C, 
sec.  309).  They  are  also  liable  for  the  withdrawal  of  capital  stock  or  the 
increase  or  decrease  thereof,  except  when  made  iu  accordance  with  the  statute 
in  such  case  made  and  provided  (C.  C,  sec.  309). 

Fox  V.  Comj)any,  108  Cal.  478  ;  41  Pac.  328 ;  A.  S.  Mining  Co.  v.  Company,  78  Cal. 
629;  21  Pao.  .'U;? ;  Martin  r.  Zellerbiu-h,  .•?8Cal.  ;300 ;  E.  W.  &  Mining  Co.  v.  Pierce,  90 
Cal.  131  ;  27  Pac.  44  ;  Shattiuk  v.  Company,  58  Cal.  .550;  Irvine  v.  McKcon,  23  Cal.  472. 

13.  Stockholders"  Liabilities.  —  a.  Each  stockholder  is  individually  liable 
for  such  proportions  of  the  corporate  debts  contracted  or  incurred  while 
he  was  a  stockholder  as  the  amount  of  stock  or  share.s  owned  by  hira  bears 
to  the  whole  of  the  subscribed  capital  stock  (Cons.,  Art.  XII.  sec.  3;  C.  C  , 
sec.  322).  Stockholders  are  also  liable  for  the  amount  of  their  unpaid-stock 
subscriptions. 

Harmon  v.  Page,  62  Cal.  448 ;  Baines  v.  Babcock,  9.5  Cal.  581 ;  27  Pac.  674 ;  Ver- 
mont Marble  Co.  v.  Company,  135  Cal.  579 ;  67  Pac.  1057 ;  Bank  v.  Company,  103 
Cal.  594 ;  37  Pac.  499. 

6.  Stock  Assessments.  —  Assessments  are  levieil  in  the  first  instance  by 
the  board  of  directors  after  one-fourth  of  the  cai^ital  stock  has  been  sub- 
scribed. The  amount  of  the  assessment  is  limited  except  in  the  case  here- 
after referred  to,  so  that  no  one'a.ssessment  shall  exceed  ten  per  cent  of 
the  amount  of  the  authorized  capital  stock.  The  exception  is  where  the 
whole  capital  stock  has  not  been  paid  up  and  the  corj^oration  is  unable  to 
meet  its  liabilities  or  to  satisfy  the  claims  of  creditors.  The  assessment 
must  be  levied  according  to  statute,  and  must  be  made  payable  not  less  than 
thirty  nor  more  than  sixty  days  from  the  time  of  making  the  order  leaving 
the  assessment.  The  day  to  be  fixed  for  the  sale  of  delinquent  stock  shall 
not  be  less  than  fifteen  nor  more  than  sixty  days  from  the  day  the  stock 
is  declared  delinquent.  In  addition  to  the  penalty  provided  for  forfeiture 
of  stock  for  failure  to  pay  assessments,  a  corporation  may  recover  the  amount 
of  such  instalment  directly  again.st  the  stockholder  by  proper  action  brought 
for  that  purpose  (C.  C,  sees.  331-349). 

Visalia,  etc.  Co.  v.  Hyde,  110  Cal.  632 ;  43  Pac.  10. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  the  president  and  secretary  (C.  C, 
sec.  323).  The  corporation  may  provide  in  its  by-laws  for  issuing  certificates 
prior  to  full  payment,  but  any  certificate  Issued  prior  to  full  payment  must 
show  on  its  face  what  amount  has  been  paid  thereon.  The  par  value  of 
stock  certificates  may  be  any  amount  (C.  C,  sec.  290,  or  amended  Laws  of 
1901,  chap.   147). 

1.5.  Preferred  Stock.  —  There  are  no  special  provisions  relating  to  the 
issuance  of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Under  the  constitution  no  corporation 
can  Lssue  stock  except  for  money  paid,  or  labor  done,  or  property  actually 
received  (Cons.,  Art.  XII.  sec.  11;  C.  C,  sec.  359,  as  amended  by  Laws  of 
1903,  chap.   253), 

Ewing  V.  Company,  56   Cal.  649;  Stein  v.    Howard,    63   Cal.  616;  4   Pac.  662; 
Martin  v.  Zellerbach,  38  Cal.  309;  Jefferson  v.  Hewitt,  103  Cal.  624 ;  37  Pac.  638; 
Kellerman  v.  Maier,  116  Cal.  416;  48  Pac.  377. 
232 


SYNOPSIS-DIGEST   OF    INCORPORATION   ACTS, 

17.  Books.  —  The  book  of  by-laws  and  stock  books  must  be  kept  at 
the  principal  office  of  the  company  within  the  State,  and  are  subject  to 
inspection  thereof  by  any  stockholder.  The  stock  and  transfer  books  are 
open  to  inspection  of  creditors  as  well  as  stockholders  (C.  C,  sees.  304,  377- 
378,  and  Cons.,  Art.  XII.  sec.  14). 

18.  Office. — The  corporation  must  maintain  an  office  within  the  State 
(Cons.,  Art.  XII.  sec.  14). 

19.  Reports.  —  No  reports  are  required  to  be  made  or  published. 

20.  Anti-Trust  Statute.  —  Corporations  cannot  combine  or  agree  to  any 
act  to  prevent  any  person  from  buying  live-stock  in  tlie  State,  or  having  it 
for  sale  or  .selling  it  on  commission  (Session   Laws  of  1893,  chap.  30). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  If  a  corporation  does 
uot  organize  and  commence  the  transaction  of  its  business  or  the  construction 
of  its  works  within  one  year  from  the  date  of  its  incorporation,  or  if  after 
organization  and  commencement  of  business  it  loses  or  disposes  of  all  of 
its  property  and  for  a  period  of  two  years  fails  to  elect  officers  and  transact 
in  a  regular  way  its  business,  its  corporate  powers  shall  cease,  and  the  corpora- 
tion may  be  dissolved  by  proper  action  brought  by  the  State  for  that  purpose 
(C.  C,  sec.  3.'38;  C.  C.  Wo.,  sees.  802-810;  Laws  of  1901,  chap.  20G). 

People  V.  Stanford,  77  Cal.  360;  18  Pac.  85;  People  v.  Dashaway  Ass'n,  84  Cal. 
114;  24  Pac.  277  ;  San  Pedro  v.  R.  R.  Co.,  101  Cal.  333 ;  35  Pac.  993 ;  People  v.  Water 
Co.,  97  Cal.  276;  32  Pac.  236;  L.  II.  Bauk  v.  Spires,  126  Cal.  541 ;  58  Pac.  1049. 

22.  Amendments.  —  The  power  of  amendment  in  California  is  broad 
and  is  also  somewhat  complicated.  The  name  of  the  corporation  can  be 
changed  only  by  application  to  the  Superior  Court.  The  corporation  must 
file  in  the  office  of  the  Secretary  of  State  a  certified  copy  of  the  decree  of 
the  court  changing  the  name  (Code  of  Civ.  Pro.,  sees.  1276-1277).  In*  other 
respects  articles  may  be  amended,  except  for  the  purpose  of  extending  its 
corporate  existence  beyond  the  time  fixed  in  the  original  articles,  or  dimin- 
ishing its  capital  stock,  by  a  majority  vote  of  its  board  of  directors  and 
by  the  vote  or  written  assent  of  the  stockiiolders  representing  at  least  two- 
thirds  of  the  subscribed  capital  stock  of  such  corporation.  .V  copy  of 
the  amended  articles  duly  certified  to  be  correct  by  the  president  and 
secretary  or  the  board  of  directors  shall  be  filed  in  each  office  where  the 
original  articles  of  incorporation  are  or  copy  thereof  is  required  to  be 
filed.  If  the  as.sent  of  two-thirds  of  the  stockholders  to  such  amendment 
has  not  been  obtained,  a  notice  of  the  intention  to  make  the  amendment  shall 
first  be  advertised  for  thirty  days  in  some  newspaper,  published  in  the  county 
in  which  the  printripal  place  of  business  of  the  corporation  is  located,  before 
tiie  filing  of  the  proposed  amendment.  To  increa.se  or  diminish  its  capital 
stock  where  such  meeting  is  called  by  the  board  of  directors,  notice  thereof 
must  be  given  by  publication  as  provided  in  the  statute.  This  notice  must 
be  j)ublisiied  at  least  once  a  week  for  sixty  days  (C.  C,  sec.  3<i2).  Tiie  capital 
stock  cannot  be  diminished  to  an  amount  less  thin  the  indebtedness  of 
the  corpi>ration.  The  publication  may  be  done  away  with  by  the  adoption 
of  a  resolution  by  the  unanimous  vote  of  the  l»oard  of  directors  increasing 
the  capital  stock  at  a  regular  called  meeting  for  the  purpo.se  when  such  resolu- 
tion is  approved  by  the  written  assent  of  the  stockholders  hojiiing  two-thirds 
of  the  subscribed  or  issued  capital  st^jck.  The  jdace  of  busine.ss  may  be 
changed  if  di^sired  by  amendm-nt  (C.  C,  sec.  .IJl  a).  If  articles  arc  filed  in 
the  wrong  county  in  the  tirst  instance,  the  code  provides  a  means  of  remedying 

233 


INCOUrORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

this.     (Sec  C.  C,  sees.  359,  3G3  ;  see  :il,so  Laws  of  1903,  chaps.  '21G,  219,  253, 
28.'>.) 

Application  of  La  Sociote',  etc.,  123  Cal.  525;  5G  Tac.  458. 

23.  Annual  Franchise  Tax.  —  There  is  no  animal  franchise  tax. 

24.  Extension  of  Corporate  Existence.  —  Only  corporations  formed  for 
a  period  of  less  than  fifty  years  have  tlie  power,  prior  to  the  expiration  of  tlie 
term  of  its  corporate  existence,  to  extend  such  term  to  a  period  not  exceeding 
fifty  years  from  its  formation  (C.  C,  sec.  401). 

25.  Dissolution.  —  Tlie  dissolution  of  a  corporation  is  effected  by  decree 
of  the  superior  court  of  1  he  county  where  the  principal  place  of  business  is 
situated  upon  voluntary  application  signed  by  a  majority  of  tiie  board  of 
directors  (Code  Civ.  I'ro.,  sees.  1227-1234). 

20.  Foreign  Corporations  (I>aws  of  1901,  chap.  93).  —  Foreign  corpora- 
tions doing  business  or  maintaining  an  office  in  this  State  must  file  with  the 
Secretary  of  State  a  certified  copy  of  its  charter,  or  articles,  or  statute,  or  legis- 
lative or  governmental  act  creating  them,  and  also  file  a  certified  copy  with  the 
county  clerk  where  the  principal  place  of  business  is  located,  and  also  where 
the  corporation  owns  property.  The  same  fee  shall  be  paid  for  filing  and 
issuing  a  certified  copy  as  is  paid  by  domestic  corporations.  A  resident 
agent  must  also  be  appointed  within  forty  days  after  commencement  of 
business  within  the  state  (C.  C,  sees.  405-407).  By  statute  the  same  liability 
imjiosed  upon  stockholders  in  domestic  coi'porations  is  imposed  upon  foreign 
corporations  doing  business  within  the  State  (C.  C,  sec.  322).  The  con- 
stitutionality of  this  provision  has  been  affirmed  by  both  the  State  and  the 
United  States  Supreme  Courts.     (See  also  Laws  of  1903,  chap.  215.) 

Thomas  v.  Company,  65  Cal.  600;  4  Pac.  641 ;  Piuuey'i;".  Nelson,  183  U.  S.  144  ; 
22  Sup.  Ct.  52. 

COLORADO. 

(The  references  cited  below  are  to  Mills  Revised  Statutes,  1891,  unless  otherwise  stated.) 

1.  Character  of  the  Law  under  -ro-hich  Business  Corporations  may- 
incorporate. —  The  Business  Corporation  Act  of  Colorado  is  found  ia  the 
lu'vised  Statutes  of  Colorado,  sees.  472  et  seq.  There  have  also  been  recent 
amendments  passed  thereto.  Special  acts  are  provided  for  the  incorporation 
of  railways,  banks,  and  trust  companies.  The  law  itself  is  fairly  satisfactory, 
but  lacks  completeness  in  some  respects. 

2.  Incorporators.  —  Three  or  more.  There  are  no  residential  require- 
ments (R.  S.,  sec.  473). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate 
must  set  forth  : 

a.  Name.  —  The  name  must  commence  with  the  word  "  the  "  and  end 
with  the  word  "  corporation,"  "company,"  "association,"  or  "society,"  and 
mu.st  indicate  the  business  to  be  carried  on.  Similarity  of  names  is  for- 
bidden (R.  S.,  sees.  472,  475). 

b.  Purposes.  —  The  statute  clearly  contemplates  that  corporations  may  be 
organized  for  any  number  of  purposes  not  covered  by  the  special  acts. 

c.  Capital  Slock. — The  amount  of  the  capital  stock.  This  maybe  any 
amount. 

d.  Duration.  —  Must  not  exceed  twenty  years. 

e.  Namher  and  Par  Value  of  Shares.  —  The  par  value  of  shares  must  not 
be  less  than  81  nor  more  than  iJlOO. 

234 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

/.  Directors.  —  The  number  of  directors  must  not  be  less  than  three  nor 
more  than  thirteen.  In  the  case  of  mining  companies  and  banks  the  number 
must  not  exceed  nine  (sec.  5S.5). 

g.  Names  of  First  Board  of  Directors.  —  This  board  under  the  statute  has 
control  of  the  affairs  of  the  company  for  the  first  year  of  its  existence. 

h.  Domiciliary  Office. — The  name  of  the  town  and  county  in  which  the 
principal  office  of  the  company  shall  be  kept. 

i.  Place  for  the  Transaction  of  Business.  —  Name  of  the  county  or  counties 
in  which  the  principal  place  of  business  shall  be  carried  on.  When  the  cor- 
poration is  to  carry  on  part  of  its  business  without  the  State,  tlie  cei'tificate 
must  state  that  fact,  and  also  state  the  name  of  the  town  and  county  in 
Colorado  iu  which  the  principal  office  shall  be  kept,  and  also  state  the  names 
of  the  counties  in  which  the  principal  business  of  the  corporation  is  to  be 
carried  on  within  the  State. 

j.  By-Laws.  —  To  directors  may  be  delegated  the  right  to  make  by-laws  if 
so  desired. 

k.  Directors^  Meetings.  —  If  it  is  desired  to  hold  directors'  meetings  with- 
out the  State,  this  right  should  be  reserved  in  the  certificate  (R.  S.,  sec.  473). 

Scliroers  ?\  Fisk,  10  Col  599  ;  16  Pac.  285  ;  Duggan  v.  Company,  II  Col.  113  ;  17 
Pac.  105;  Humphreys  v.  Mooney,  5  Col.  293;  People  v.  Cheeseman,  7  Col.  376;  3 
Pac.  716  ;  I).  &  S.  Ry.  Co.  v.  D.  C.  Ry.  Co.,  2  Col.  673;  G.  R.  B.  Co.  v.  RoUius,  13 
Col.  4;  21    Pac.  897;  Joues  v.  Compauy,  21  Col.  263;  40  Pac.  457. 

4.  Statutory  Povrers.  —  Tlie  main  statutory  powers  are  what  are  known 
as  the  common  law  powers  belonging  to  all  business  corporations  (R.  S.,  sec. 
470).  Corporations  have,  however,  tlie  following  extraordinary  jjowers  in  Col- 
orado :  To  con.solidate  with  another  corporation  when,  by  a  vote  of  at  least 
three-fourths  of  the  stock  of  each  company  severally  had,  the  proposition  shall 
be  approved.  The  method  of  consolidation  is  pointed  out  in  detail  in  the 
statute  (R.  S.,  sec.  02.5).  The  statute  contains  one  express  limitation  upon 
the  powers  of  corporations,  which  may  be  enumerated  as  follows  :  They  are 
forbidden  to  use  any  of  the  corporate  funds  for  the  purchase  of  their  own  stock 
except  such  as  may  be  forfeited  for  the  non-payment  of  asse.'^smcnts  thei-eon 
(R.  S.,  sec.  405).  Manufacturing  and  mining  companies  cannot  encumber 
their  plant  or  mines  or  machinery  without  the  vote  of  a  majority  of  the  stock- 
holders (R.  S.,  sec.  481).  The  power  to  consolidate  is  expressly  given  (R.  S., 
.sec.  028).  Cumulative  voting  for  directors  is  permitted  ;  also  voting  by  proxy 
(Laws  of  189.";,  pp.  150-1.52,  sec.  1 ;  Laws  of  1891,  p.  93,  sec.  4  ;  see  also  Laws 
of  1903,  p.  158). 

Jones  V.  Hardware  Co.,  21  Col.  263;  40  Pac.  457  ;  Spaugler  v.  Butterfield,  6  Col. 
356;  Carpenter  i'.  People,  8  Col.  116;  5  Pac.  828;  Mining  Co.  v.  Hank,  2  Col. 
248;  City  of  Pueblo  v.  Company,  28  Col.  524:  67  Pac.  162. 

5.  Procuring  the  Charter. — The  certificate  must  be  signed  and  ac- 
knowledged l)y  each  of  the  incorporators.  In  practice  it  is  well  to  execute 
a  sufficient  number  of  original  certificates  so  as  to  permit  the  filing  of  one 
original  iu  every  county  where  the  i)usiness  of  the  corporation  is  to  be  carried 
on  as  wt;ll  as  in  the  office  of  thi^  .Secri;tary  of  State.  A.s  .soon  as  the  certificate 
has  Ijeen  filed  in  the  office  of  the  record<;r  of  deeds  in  eacii  of  the  counties  in 
which  the  principal  place  of  busiiu;.ss  shall  be  carried  on  as  well  as  in  the 
office  of  the  Secretary  of  State,  the  corporate  existence  conimcnccs  (sees.  473- 
475).  The  .Secretary  of  .State  issues  a  certificate  of  autliority  t(;  transact 
business  as  a  corporation  within  the  State.     The  President  and  a  majority 

'•>  '\  \ 


INCORPORATION  AND    ORGANIZATION    OF   CORPORATIONS, 

of  the  directors,  after  the  last  installinont  of  stock  is  paid  in,  must  make  a 
certiticate  stating  tlie  amount  of  the  capital  so  tixed  and  paid  in,  which  cer- 
tificate shall  be  signed  and  sworn  to  by  the  President  and  a  majority  of  tlie 
directors  and  must  be  recorded  in  the  same  office  where  the  certificate  of 
incorporation  is  recorded  (K.  S.,  sees.  487,  491). 

Austin  r.  Berlin,  13  Col.  198;  22  Pac.  433;  Cook  v.  Mcrritt,  15  Col.  212;  25  Pac. 
176;  Matthews  !,•.  Patterson,  16  Col.  215;  26  Pac.  812;  F.  M.  &  Co.  v.  MacLeod,  8 
Col.  Ap.  liiO;  45  Pac.  282. 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  indebtedness  which  a  corporation  may  incur. 

7.  Organization  Fee.  —  There  must  be  paid  to  the  Secretary  of  State 
$20  for  tiling  the  certificate  of  incorporation  of  companies  with  a  capitaliza- 
tion of  not  more  than  $50,000,  and  for  every  thousand  dollars  in  excess 
of  SoO.iiOtt,  an  organization  tax  of  120  cents  per  thousand  is  exacted  (Laws  of 
1901,  chap.  52,  sec.  1). 

Joues  V.  Compauy,  21  Col.  263;  40  Pac.  457. 

8.  Filing  and  Recording  Fees.  —  There  are  no  fees  due  the  Secretary  of 
State  for  filing  articles  of  incorporation  otlier  than  payment  of  the  organiza- 
tion tax.  For  certified  copy  of  articles  of  incorporation,  15  cents  per  folio  of 
one  hundred  words,  and  $1  for  seal.  For  issuing  certificate  of  authority 
showing  that  all  fees  prescribed  by  law  have  been  paid,  $5  ;  for  filing  and  re- 
cording impression  of  the  corporate  seal,  $2.50;  for  filing  certificate  of  pay- 
ment of  stock,  S2.50  and  upwards,  according  to  capitalization.  With  respect 
to  fees  of  county  recorder,  wlierein  articles  of  incorporation  are  required  to 
be  filed,  the  counties  are  graded  for  fee  purposes.  The  filing  fee  there  ranges 
from  10  cents  to  25  cents.  If  the  articles  are  recorded,  the  fee  ranges  from 
50  cents  to  S2  (Laws  of  1901,  pp.  116-121,  sees.  1-10). 

9.  Commencing  Business.  —  Corporations  may  begin  business  as  soon  as 
their  certificates  liav^e  been  filed,  State  fees  paid,  and  certificate  of  payment 
issued  (Laws  of  1.901,  chap.  52,  sec.  1). 

10.  Organization  Meeting.  —  The  incorporators  should  sign  a  written 
agreement  fixing  the  time  and  place  within  the  State  for  the  organization  of 
the  corporation.  The  incorporators  may  be  represented  by  proxy  if  desired. 
If  the  certificate  of  incorporation  does  not  bestow  upon  directors  the  right  to 
make  by-laws,  the  incorporators  should  adopt  by-laws  themselves.  Immedi- 
ately after  the  adjournment  of  tlie  incorporators'  organization  meeting,  the 
board  of  directors  named  in  the  articles  of  incorporation  should  meet  and 
elect  the  officers  of  the  corporation.  The  statutory  ofl!icers  are  a  president, 
who  must  be  chosen  from  among  the  directors,  and  such  subordinate  officers 
as  the  company  may  by  its  by-laws  designate. 

Humphreys  v.  Mooney,  5  Col.  283. 

11.  Meetings  of  Stockholders  and  Directors.  —  Meetings  of  the 
stockholders  must  be  held  at  the  office  of  the  company  within  the  State. 
Directors'  meetings  may  be  held  without  the  State  only  l)y  making  provision 
therefor  in  the  certificate  of  incorporation  (R.  S.,  sees.  481,  49o). 

Humphreys  v.  Mooney,  5  Col.  283;  Joues  v.  Pearl  M.  Co.,  20  Col.  417;  38  Pac. 
700;  Cook  V.  Hager,  3  Col.  386 ;  Utlay  v.  Company,  4  Col.  371. 

12.  Directors'  Qualifications  and  Liabilities.  a.  Qualifications.  — 
There  must  be  not  less  than  three  nor  more  than  thirteen  directors,  all  of 

236 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

whom  must  be  stockholders.  In  case  of  mining  companies  and  banks 
not  more  than  nine  are  permitted.  There  are  no  residential  requirements 
(R.  S.,  sec.  481;  see  also  R.  S.,  sec.  585;  Laws  of  1895,  pp.  150-152,  sec.  1). 

b.  Liabilities.  —  Directors  are  jointly  and  severally  liable  for  the  declara- 
tion and  payment  of  dividends  which  render  it  insolvent  or  which  decrease 
the  amount  of  its  capital  stock.  The  extent  of  the  liability  is  for  all  debts 
of  the  corporation  then  existing  and  for  all  that  shall  thereafter  be  contracted 
while  the  capital  remains  so  diminished  (R.  S.,  sees.  491,  492,  494).  Tliey 
are  also  liable  for  failure  to  file  annual  reports  (Laws  of  1901,  chap.  52, 
sec.  11),  or  to  make  certificates  as  to  final  payment  of  stock. 

Nix  V.  Miller,  26  Col.  203;  57  Pac.  1084  ;  Austin  v.  Berlin,  13  Col.  198;  22  Pac. 
433  ;  Matthews  v.  Patter.son,  16  Col.  21.5 ;  26  Pac.  812  ;  Larseu  v.  James,  1  Col.  App. 
313 ;  29  Pac.  183  ;  Gregory  v.  Bank,  3  Col.  322 ;  Col.  Fuel  Co.  v.  Lenhart,  6  Col.  App. 
511 ;  41  Pac.  834  ;  Cook  v.  Merritt,  15  Col.  212  ;  25  Pac.  176. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  corporate 
debts  to  the  extent  of  their  unpaid  subscriptions  to  the  corporate  stock  (R.  S. 
sec.  486). 

14.  Stock  Certificates  — Every  stockholder  is  entitled  to  have  a  stock 
certificate  i.ssued  to  him  signed  by  such  officers  as  the  by-laws  shall  prescribe. 
The  par  value  of  stock  certificates  must  not  be  less  than  SI  nor  more  than 
SlUO  (R.   S.,  sec.  480). 

15.  Preferred  Stock.  —  The  issuance  of  preferred  stock  is  not  expressly 
authorized  by  statute. 

16.  Payment  of  Capital  Stock.  —  The  corporation  may  purcha.se  mines, 
manufactories,  and  other  prdiierty  necessary  for  the  corporate  business,  and 
issue  stock  to  the  amount  of  the  value  thereof  in  payment  therefor.  Stock 
so  issued  shall  be  declared  full-paid  stock  and  not  liable  to  any  further  assess- 
ments. Neither  shall  the  stockholders  be  liable  to  any  further  payments 
therefor.  The  constitutional  provision  (Cons.,  Art.  XV.  sec.  9)  is  that  no 
corporation  shall  issue  stock  or  bonds  except  for  labor  done,  service  performed, 
or  money  or  property  actually  received  (R.  S.,  sec.  618). 

17.  Books.  —  The  directors  are  required  to  keep  at  the  principal  office  or 
place  of  business  within  the  State  correct  books  of  account.  These  books 
shall  be  open  to  the  inspection  of  stockholders  at  any  time.  In  addition  to 
the  foregoing  a  stock  register  must  be  kept  containing  the  names  and  resi- 
dences of  the  stockholders,  the  number  of  shares  held  by  them,  the  time  when 
they  became  or  ceased  to  be  stockholders,  and  the  amount  of  stock  actually 
paid  in  and  what  proportion  has  been  paid  in  cash.  This  book  is  open  to  the 
inspection  of  stockholders  and  creditors  during  business  hours  (K.  S.,  sees. 
488,  508;  Laws  of  1903,  chap.  77). 

18.  OfiQce.  —  The  corpoiaiion  nmst  maintain  an  office  within  the  State 
(R.  S.,  s.'c.  173). 

19.  Reports — Annually  wilhin  sixty  days  from  January  1st,  reports 
must  be  filed  with  the  Secretary  of  State,  covering  tlie  names  and  residences 
of  officers  and  directors,  the  amount  of  capital  stock  fixed,  and  (he  projiortiou 
paid  in;  a  statement  of  the  manner  of  the  payment  of  capital  stock,  a  state- 
ment that  the  company  is  or  is  not  engaged  actively  in  business  within  (he 
State,  and  other  information  necessary  to  show  the  financial  condition  of  the 
company.  Also  the  amount  of  indebtedness  of  the  company  at  the  date  of 
the  filing  of  the  report.  (Mining,  flitch,  and  power  companies  must  include 
other  statements.)     In  case  of  failure  to  file  such  report  tlie  officers  and  direc- 

237 


INCOKPORATION    AND    OROANTZATION    OF    CORPORATIONS. 

tors  become  liable  for  corporate  iiulebterliiess  contracted  during  the  preceding 
year,  or  while  such  default  continues  (Laws  of  1901,  chap.  52,  sec.  11).  A 
report  of  particulars  of  financial  condition  must  also  be  made  to  the  State  Board 
of  Assessors,  and  filed  before  .June  1st,  under  penalty  of  $100  per  day  for 
default  (Laws  of  1002,  pp.  71-7;?,  sec.  iV.]). 

20.  Anti-Trust  Statute.  —  There  is  no  antitrust  statute. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Failure  to  pay 
license  tax  subjects  the  corporation  to  forfeiting  of  charter  at  the  instance  of 
tlie  State  (Laws  of  1!)01,  chap.  94,  sec.  70  C). 

22.  Amendments.  —  By  two- thirds  vote  of  outstanding  stock  at  a  stock- 
holders' meeting  duly  convened  for  that  purpose,  the  articles  may  be  amended 
in  any  particular,  except  that  the  objects  or  purposes  for  which  the  corporation 
is  organized  may  not  be  altered  and  the  rights  of  creditors  must  not  be 
prejudiced  in  diminishing  the  capital  stock  (R.  S.,  sees.  477-479  as  amended 
by  Laws  of  1891,  pp.  92,  93,  sees.  1-6). 

23.  Annual  Franchise  Tax  —  Where  the  capitalization  is  less  than 
$25,000,  there  is  no  annual  franchise  tax  exacted.  In  case  the  capitalization 
is  §25,000  or  more,  the  annual  franchise  tax  is  two  cents  per  thousand  for 
each  thousand  dollars  (Laws  of  1902,  p.  73,  sees.  64,  66).  After  January  1, 
1905,  this  tax  is  payable  to  the  Secretary  of  State  (Laws  of  1903,  p.  155). 

24.  Extension  of  Corporate  Existence. — In  case  a  majority  of  the 
stockholders  of  the  corporation  cast  their  vote  at  a  meeting  duly  called  for 
that  puipose  in  favor  of  renewing  the  corporate  existence  of  the  corporation, 
the  president  and  secretary  thereof  shall  under  the  seal  of  the  corporation 
certify  that  fact,  and  shall  make  as  many  certificates  as  may  be  necessary  so 
as  to  file  one  in  the  othce  of  the  recorder  of  deeds  in  each  county  wherein 
the  corporation  may  do  business,  and  one  in  the  office  of  the  Secretary  of 
State,  and  thereupon  the  corporate  life  of  such  corporation  shall  be  renewed 
for  any  term  not  exceeding  twenty  years.  There  must  be  paid  to  the  Secre- 
tary of  State  the  same  fee  as  is  now  required  by  law  for  filing  certificates  for 
a  new  corporation  (Laws  of  1899,  chap.  89 ;    Laws  of  1903,  chap.  7G,  sec.  2). 

Pratt  r.  Company,  1  Col.  Dec.  Supp.  171. 

25.  Dissolution.  —  If  all  debts  are  paid,  a  company  may  be  dissolved  by 
the  vote  of  two-thirds  of  the  outstanding  stock  at  a  meeting  of  the  stock- 
holders called  for  that  purpose.  A  certificate  of  such  dissolution  must  be 
filed  and  likewise  published  (Stat.,  sees.  497,  619,  620;  Laws  of  1891,  p.  95, 
sees.  1,  2  ;  Laws  of  1903,  chap.  76,  sec.  1). 

Standley  v.  Company,  27  Col.  331 ;  61  Pac.  600. 

26.  Foreign  Corporations.  —  A  foreign  corporation  desiring  to  do  any 
business,  institute  or  defend  actions  or  hold  property  within  the  State  is  re- 
quired to  file  with  the  Secretary  of  State  a  copy  of  its  charter,  or  of  its  certif- 
icate of  incorporation,  duly  certified  and  authenticated  bythe  proper  authority 
from  the  State  from  which  the  charter  issues.  It  must  also  file  a  certificate, 
signed  and  acknowledged  by  the  president  and  secretary,  with  the  Secretary 
of  State  and  in  the  olfice  of  the  recorder  of  deeds  of  the  county  or  coun- 
ties in  which  it  proposes  to  carry  on  its  business  within  the  State,  designating 
the  principal  place  wherein  the  business  of  said  corporation  is  to  be  carried 
on  in  the  State,  and  appointing  an  agent  at  this  principal  place  of  business 
upon  whom  process  may  be  served.  The  license  tax  for  foreign  corpo- 
rations is  one-half  more  than  for  filing  original  certificates  of  domestic  corpo- 

238 


SYNOPSIS-DIGEST   OP   INCORPORATION   ACTS. 

rations.  The  annual  license  tax  for  foreign  corporations  is  4  cents  on  each 
thousand  dollars  of  its  capital  stock,  but  if  the  par  value  of  its  shares  is  less 
than  •?!  per  share  the  tax  is  2^  cents  per  thousand  shares  (Stat,,  sees.  499, 
500,  501;  Laws  of  1893,  p.  88,  amending  sec.  499;  Laws  of  1902,  p.  73, 
sees.  65,  66 ;  Laws  of  1903,  chap.  76,  sees.  3-5).    Must  also  file  annual  reports. 

INIiller  v.  Williams,  27  Col.  34 ;  59  Pac.  740 ;  Kephart  v.  People,  28  Col.  73 ;  62  Pac. 
946;  Iron  Silver  Miu.  Co.  v.  Cowie,  31  Col.  450;  72  Pac.  1067. 


CONNECTICUT. 

(The  references  cited  below  are  to  the  Session  Laws  of  1903,  chap.  194,  unless  otherwise  stated.) 

1.  Character  of  the  Law  under  •which  Business  Corporations  may 
incorporate.  —  The  corporation  laws  of  Connecticut  including  the  Corpora- 
tion Act  of  1901  (General  Statutes  1901,  chap.  157)  have  been  entirely 
revised.  The  provisions  of  the  General  Statutes  of  1902  have  been  rei)ealed, 
and  the  revised  law  —  Laws  of  1903,  chap.  194  —  has  been  substituted  there- 
for. Special  acts  are  provided  for  the  incorporation  of  banking,  trust,  building 
and  loan,  insurance,  surety,  railway,  street  railway,  telephone,  telegraph,  gas, 
electric  light,  and  water  companies.  Corporations  may,  however,  be  incor- 
porated for  the  purpose  of  transacting  any  of  the  said  lines  of  business  just 
enumerated  in  any  other  State  or  foreign  country  if  not  prohibited  by  the 
laws  of  such  State  or  foreign  countr\-  (sec.  62). 

2.  Incorporators.  —  Three  or  more.  There  are  no  residential  require- 
ments (sec.  62). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate 
must  set  forth  : 

a.  Name,  which  must  be  such  as  to  distinguish  it  from  any  other  corpora- 
tion chartered  by  or  organized  under  the  laws  of  the  State,  and  from  any 
corporation  engaged  in  the  same  business  or  promoting  or  carrying  out  the 
same  purposes  within  the  State.  The  name  must  begin  with  "the"  and 
end  witli  the  word  "corporation,"  "company,"  or  "incorporated"  (sees. 
2,63). 

b.  Domiciliary  Office.  —  The  name  of  the  town  in  the  State  in  which  the 
corporation  is  to  be  located  (.sec.  63). 

c.  Nature  of  the  Business  to  be  transacted  or  the  Purposes  to  be  promoted  or 
carried  out.  —  The  statute  clearly  contemplates  that  corporations  may  be  or- 
ganized for  any  number  of  purposes  not  covered  by  the  special  acts  (sec.  63). 

d.  Capital  Stock.  —  The  amount  of  the  total  authorized  capital  stock,  wiiich 
shall  not  be  less  than  82,000;  also  the  number  of  shares  into  whicli  the  same  is 
divided,  wliich  .shall  not  be  less  than  82.").  If  there  be  more  than  one  class  of 
stock,  a  description  of  the  general  classes  with  the  terms  ui)on  which  they  are 
respectively  created  (sec.  63). 

e.  Commencing  Business.  —  Amount  of  capital  stock  with  which  tlie  corpo- 
ration shall  begin  business,  which  shall  not  be  le.ss  than  !?1,000  (sec.  63). 

f.  Duration.  — Tiie  period,  if  any,  limited  for  the  duration  of  tlie  corpo- 
ration.    The  charter  may  be  perpetual  if  desired  (sec.  63). 

g.  Regulation  of  Internal  Affairs.  —  There  may  also  be  inserted  any  lawful 
provisions  which  the  incorporators  may  choose  to  in.sert  for  the  regulation  of 
the  business  of  the  corporation,  or  for  defining  or  limiting  the  powers  of  the 
corporation,  its  officers,  directors,  or  any  class  of  stockiiolders  (sec.  64). 

239 


INCOnrORATION    AND    ORGANIZATION    OF    CORrORATIONS. 

4.  Statutory  Powers. — Tn  addition  to  the  statutory  enumeration  of  the 
powers  of  corporations  (Laws  of  1!)(»3,  chap.  194,  sec.  3)  corporations  have 
the  following  extraordinary  powers:  To  carry  on  their  business  in  any  State 
or  Territory  of  the  United  States  or  in  any  foreign  country.  To  siiare 
profits  with  employees.  To  acquire  its  own  stock.  To  voluntarily  dis- 
solve itself.  To  mortgage  real  and  personal  estate,  including  its  franchises, 
and  issue  promissory  notes,  bonds,  or  other  evidences  of  indebtedness.  To 
issue  one  or  more  classes  of  stock.  To  consolidate  witli  another  corporation 
engaged  in  the  same  or  similar  line  of  business.  To  enforce  a  lien  upon  cor- 
porate stock  for  all  debts  including  assessments.  To  appoint  an  executive 
committee  from  the  board  of  directors.  To  vote  by  proxy  and  to  purchat^e 
and  hold  the  stock  of  other  corporations  (sees.  3,  4,  9,  11,  21,  25,  27,  59,  75). 

5.  Procuring  the  Charter.  —  The  certificate  must  be  signed  by  each  of 
the  incorporators,  but  it  need  not  be  acknowledged.  It  must  then  be  approved 
by  the  Secretary  of  State.  The  law  provides  that  the  corporate  existence 
sliall  begin  upon  the  approval  of  such  certificate  by  the  Secretary  of  State. 
It  also  provides  that  after  such  approval  and  until  the  directors  are  elected, 
the  incorporators  shall  have  charge  of  the  affairs  of  the  corporation,  and  may 
take  such  steps  as  are  necessary  to  obtain  subscriptions  to  its  stock  (sees. 
60,  66). 

5.  G.  &  P.  Co.  V.  Scholfield,  70  Conn.  500;  40  Atl.  182. 

6.  Corporate  Indebtedness.  —  There  is  no  limitation  upon  amount  of 
corporate  indebtedness. 

7.  Organization  Tax.  — Fifty  cents  on  every  thousand  dollars  of  its  cap- 
ital stock  up  to  $5,000,000.  Beyond  that  amount  10  cents  upon  every  thousand 
dollars  of  excess.     The  minimum  fee  however  is  $25  (sec.  61). 

8.  Filing  and  Recording  Pee.  —  The  Secretary  of  State  is  entitled  to 
receive  in  addition  to  the  organization  tax  SI  for  recording  certificate  of  in- 
corporation and  $1  for  recording  certificate  of  organization.  For  certified  copy 
of  certificate  of  incorporation,  50  cents  per  legal  page  of  two  hundred  and 
eighty  words.     For  recording  in  local  county  ofiice,  $1. 

9.  Commencing  Business.  —  Corporations  cannot  commence  business 
until  the  amount  of  capital  specified  in  the  certificate  of  incorporation  as  the 
amount  with  which  it  will  begin  business  has  been  paid  in,  nor  until  its 
directors  and  ofl5cers  have  been  duly  elected  and  its  by-laws  duly  adopted,  and 
until  a  majority  of  the  directors  have  filed  with  the  Secretary  of  State  a  certifi- 
cate of  organization  setting  forth  (1)  The  amount  of  each  class  of  stock  sub- 
scribed for.  (2)  The  amount  paid  thereon  in  cash.  (3)  The  amount  paid 
thereon  in  property  other  than  cash.  (4)  The  amount  paid  on  each  share  of 
stock  which  has  not  been  paid  for  in  full.  (5)  The  name  and  residence  of 
each  of  the  original  su])scribers  with  the  number  and  class  of  shares  sub- 
scribed for  by  each.  (6)  The  directors  and  officers  of  the  corporation  have  been 
duly  elected  and  by-laws  adopted.  (7)  The  name  and  residence  and  post- 
office  address  of  each  of  the  officers  and  directors.  A  certified  coi\y  of  said 
certificate,  duly  certified  by  the  Secretary  of  State,  must  be  filed  in  the  office 
of  the  clerk  of  the  town  where  the  said  corporation  is  to  be  located  before  the 
corporation  can  commence  business  (sec.  69). 

10.  Organization  Meeting.—  A  majority  of  the  incorporators  may  call 
the  organization  meeting  at  such  time  and  place  as  may  be  designated  by  a 
notice  published  twice  at  least  seven  days  before  the  time  designated  in  a 
newspaper  in  the  State  having  circulation  in  the  town  in  which  the  corpora. 

240 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

tion  is  located,  and  such  notice  may  be  waived  by  a  writing  signed  by  all  the 
subscribers  to  the  stock,  and  a  majority  of  the  incorporators  specify  the  time 
and  place  for  such  meeting.  When  the  meeting  is  held,  the  subscribers  for 
the  stock,  who  may  be  present  in  person  or  be  represented  by  proxy,  must 
choose  a  temporary  clerk,  and  proceed  to  the  election  by  ballot  of  three  or 
more  directors,  who  are  subscribers  to  the  capital  stock,  and  shall  adopt  by- 
laws for  the  regulation  of  the  affairs  of  the  corporation.  Immediately  upon 
the  adjournment  of  the  organization  meeting  of  the  incorporators,  the  direc- 
tors should  meet  and  organize  by  choosing  from  among  their  number  a  presi- 
dent antl  shall  appoint  a  treasurer  and  secretary,  and  such  other  officers  as 
the  by-laws  shall  prescribe.  The  same  person  may  fill  the  offices  of  president 
and  treasurer  or  of  secretary  and  treasurer  (sees.  (57-71  inclusive). 

11.  Meetings  of  Stockholders  and  Directors  —Meetings  of  stock- 
holders must  be  held  at  the  office  of  the  company  within  the  State.  Direc- 
tors' meetings  may  be  held  without  the  State  by  making  provision  therefor 
in  the  by-laws  or  by  the  consent  of  all  the  directors  (sees.  3,  22). 

McCall  V.  Company,  6  Conn.  428. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications. —  There 
must  be  at  least  three  directors,  who  must  be  stockholders.  There  are  no  resi- 
dential requirements.  They  may  be  divided  into  classes  if  desired  (sec.  10). 
The  board  of  directors  may  appoint  an  executive  committee  if  they  see  fit 
(sec.  10).     May  adopt  by-laws  subject  to  those  adopted  by  the  stockholders. 

b.  Liabilities.  —  Every  director  voting  for  a  dividend  or  other  distribution 
of  assets,  except  from  the  net  profits  or  actual  surplus  of  the  corporation,  is 
liable  to  a  fine  of  not  more  than  $500.  If  such  payment  or  distribution 
leaves  the  company  insolvent,  the  directors  so  voting  shall  be  jointly  and 
severally  liable  to  the  amount  so  paid  or  di.sLributed  to  any  creditors  existing 
at  the  date  of  such  voting  which  shall  have  obtained  judgment  against  such 
corporation  and  on  which  execution  shall  have  been  returned  unsatisfied. 
Where  the  directors  concur  in  a  fi-audulent  overvaluation  of  property  taken 
in  exchange  for  stock  of  the  corporation,  tliey  are  jointly  and  severally  liable 
to  the  corporation  for  the  amount  of  tlie  difference  between  the  actual  value 
of  any  property  so  accepted  in  payment  at  the  time  of  such  indebtedness,  and 
the  amount  for  which  it  is  received  in  payment  (sec.  ")). 

Davenport  v.  Lines,  72  Conu.  118  ;  44  Atl.  17. 

1.3.  Stockholders'  Liabilities.  —  Stockholders,  whether  original  sub- 
scribers or  not,  are  liable  for  any  balance  due  on  the  stock  held  by  them. 
After  the  par  value  of  tlieir  stock  has  been  paid  they  are  not  liable  for  any 
furtlier  a.s.sessmcnts.  They  are  liable  for  causing  insolvency  by  illegally 
reducing  stock   (sees.   6,   10). 

11.  Stock  Certificates.  —  Kvery  stockholder  is  entitleil  to  have  a  stock 
certificate  issued  to  liini  under  the  seal  of  the  corporation  .signed  by  the  presi- 
dent or  vice-president  and  by  the  secretary  or  assistant  secretary  or  treas- 
urer or  assistant  treasurer.  The  par  value  of  stock  certificates  nmst  not  be 
less  than  *-'•")  (sees.   15.  17.  6:5). 

15.  Preferred  Stock.  —  Special  authority  to  issu»^  pn-frrred  stock  is  given 
by  statute  if  provision  is  made  therefor  in  the  certificate  of  incorporation, 
'riic  terms  upon  which  such  j^cferred  stock  is  i.ssucd  must  be  stated  in  the 
certificate  of  iiicoriioratif>n  (>'r    0:'. ;  .see  also  sec.  25). 

10  Payment  of  Capital  Stock.  —  Stock  may  be  paid  for  either  in  cash 
IC  241 


INCORPORATION    AND    ORG  \NIZATION    OF   CORPORATIONS. 

or  in  property.  If  not  jiaid  for  in  cash,  a  majority  of  the  directors  shall  make 
anil  81:^11  upon  the  corporate  records  a  statement  showing  the  property  received 
in  payment  for  stock  and  that  it  lias  an  actual  value  equal  to  the  amount  for 
whicii  it  was  so  received.  The  judgment  of  the  directors  as  to  the  value  of 
the  property  upon  this  subject  is  made  final.  But  the  directors  concurring  in 
the  judgment  of  such  valuation,  in  the  case  of  fraud  in  the  overvaluation  of 
such  property,  are  jointly  and  seve-rally  liable  to  the  corporation  for  the  differ- 
ence between  the  actual  value  of  such  property  so  accepted  in  payment  and  the 
amount  for  which  it  is  received  in  payment   (sec.  12). 

17.  Books.  —  The  stock  book  or  duplicate  thereof,  containing  the  names 
and  addresses  of  the  stockholders  and  the  number  of  shares  held  by  them,  shall 
at  all  times  during  the  usual  hours  of  business  be  open  to  the  examination  of 
every  stockholder  at  its  principal  otHce  and  place  of  Susiness  in  the  State.  H 
a  creditor  makes  an  atlidavit  that  he  is  a  creditor  of  the  corporation,  the  per- 
son in  charge  of  the  stock  books  is  obliged  to  furnish  him  information  as  to 
the  number  of  shares  held  by  such  stockholder  in  any  corporation  (sees.  18,  39). 

liemiinvay  v.  Heminway,  58  Conn.  443  ;  19  Atl.  76G. 

18.  Office. —  The  corporation  must  maintain  an  office  within  the  State 
(sec.  G3). 

19.  Reports.  —  The  president  and  treasurer  must  annually,  on  or  before  the 
15th  day  of  February  or  August,  make,  sign,  swear  to,  and  file  in  the  office  of 
the  Secretary  of  State  a  certificate  setting  forth  as  of  the  first  day  of  January 
or  July  immediately  preceding :  the  name,  residence,  and  post-office  address 
of  all  of  the  officers  and  directors;  amount  of  outstanding  capital  .stock  which 
has  not  been  paid  for  in  full,  with  the  amount  due  thereon  ;  location  of  the 
principal  office  within  the  State,  with  the  street  number  if  there  be  any,  and 
the  name  of  the  person  in  charge  thereof  upon  whom  process  against  the 
corporation  may  be  served.  A  certified  copy  of  said  certificate  must  be  re- 
corded in  the  office  of  the  town  clerk  of  the  town  in  which  said  corporation  is 
located  (sec.  37). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  affidavit  in  force  in 
Connecticut. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  grounds  for 
proceedings  in  tlie  nature  of  quo  warranto  against  corporations  are  to  be 
found  in  "the  Statutes  of  Conn.  1887,  sees.  1296-1302  inclusive. 

Pearce  v.  Olney,  20  Conn.  544  ;  Hart  v.  Company,  40  Coun.  524. 

22.  Amendments.  —Articles  may  be  amended  before  commencing  busi- 
ness in  any  respect  desired.  The  corporation  may  change  its  name,  nature 
of  business,  principal  office,  increase  or  reduce  its  capital  stock,  or  make  any 
changes  required  by  the  approval  of  two-thirds  of  the  stock  issued  and  out- 
standing of  each  class.  A  certificate  .setting  forth  the  amendment  and  its 
adoption  must  be  filed  in  the  same  manner  as  the  certificate  of  incorporation 
(.sees.  73,  74). 

N.  H.  &  T).  Ry.  Co.  v.  Chapman,  .38  Conn.  56. 

23.  Annued  Franchise  Tax.  —  There  is  no  ainiual  franchise  tax. 

24.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for 
extension  of  eorjiorate  existence. 

2.5.    Dissolution.  —  The  franchise  may  be  surrendered  at  any  time  before 

any  part  of  subscriptions  are  paid  and  business  begun.     Thereafter  voluntary 

dissolution  may  be  accomplished  by  preliminary  vote  of  the  directors  followed 

bv  the  athrmative  vote  of  three-fourths  in  interest  of  each  class  of  stock  issued 

24i: 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

and  outstanding.    Minority  stockholders  owning  one-tenth  of  the  capital  stock 
may  petition  the  court  for  dissolution  (sees.  26-06  inclusive,  72). 

26.  Foreign  Corporations.  —  Before  a  foreign  corporation  can  transact 
business  in  the  State  it  must  file  in  the  office  of  the  Secretary'  of  State  a 
certified  copy  of  its  charter  or  certificate  of  incorporation,  together  with  a 
statement  signed  and  sworn  to  by  the  president,  treasmer,  a; id  a  majority  of 
its  directors,  showing  the  amount  of  its  authorized  capital  stock,  the  amount 
paid  thereon,  if  any,  and  if  any  part  of  such  payment  has  been  made  otherwise 
than  in  cash,  said  statement  sliall  state  the  particulars  thereof;  and  must  also 
appoint  in  writing  the  Secretary  of  State  to  be  its  attorney  upon  whom  pro- 
cess may  be  served.  Foreign  corporations  are  required  to  file  annual  reports 
similar  to  those  required  of  domestic  corporations.  The  fee  for  filing  certi- 
fied copy  of  the  charter  is  SIO,  and  a  further  fee  of  8-3  is  charged  for  filing  the 
statement  required  by  law  (sees.  80  to  88  inclusive). 

Farmers'  Loan  &  Trust  Co.  v.  Smith,  74  Conn.  625 ;  51  Atl.  609. 


DELAWARE. 

(The  references  cited  below  are  to  the  Laws  of  1903,  chap.  394,  unless  otherwise  stated.) 

1.  Character  of  the  Law  under  ■wrhich  Business  Corporations  may  be 
incorporated.  —  The  Business  Corporation  Act  of  Delaware  is  to  be  found  in 
the  Revision  Act  of  1899,  and  amendments  thereto  found  in  the  Session 
Laws  of  1901  and  1903.  Under  it  parties  may  incorporate  for  any  lawful 
business  except  banking.  Special  provisions  are  to  be  found  for  incorporat- 
ing railway  companies  for  the  purpose  of  operating  railways  witliin  the  State. 

2.  Incorporators.  — There  must  be  at  least  tiiree  incorporators.  There 
are  no  residential  requirements  (sec.  1). 

•J.  Contents  of  the  Certificate  of  Incorporation  (sec.  •")).  —  The  certifi- 
cate of  inc(jrporati(jn  must  set  forth  : 

a.  Name.  —  The  name  of  the  corporation  must  contain  one  of  the  words 
"  a.s.sociation,"  "company,"  '"corporation,"  "club,"  "incorporated,"  "soci- 
ety," '*  union,"  or  "syndicate."  Xo  name  can  be  employed  which  does  not 
serve  to  distinguish  it  from  that  of  any  other  corporation  engaged  in  the 
same  business  or  promoting  or  carrying  on  the  same  objects  or  purposes 
within  the  State. 

h.  Domicilian/  Office.  —  The  name  of  the  city,  county,  or  place  within  the 
county  in  which  the  principal  ofRce  or  place  of  business  is  to  be  located  within 
the  State. 

c.  Purposes.  — The  natin-e  of  lh(!  l)usiness,  objects,  or  purjioses  proposed  to 
be  transacted,  promoted,  or  carried  on.  The  statute  clearly  contemplates  that 
cor|)oralions  may  be  organized  for  more  than  one  purpose  not  covered  by  the 
special  acts.  Banking  is  the  only  ])in|)o.s(?  forbidden  to  corporations  organized 
under  the  General  Act. 

d.  Cnjiital  Slock. — The  amount  ff  ca[iital  whirh  shall  not  be  Irss  than 
S2,00(),  the  number  of  shares  int<j  wliicli  tlie  same  is  divided,  and  the  par 
value  of  each  share,  which  may  he  any  ainoimt,  the  amount  of  capital  stock 
with  which  it  will  commence  business,  which  cannot  be  less  than  81  ,"00. 
If  the  corporation  is  to  have  more  than  one  class  of  stock,  a  description  of 
each  class  must  be  given,  with  the  terms  on  which  the  respective  classes  of 
stock  are  created. 

243 


INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS. 

e.  Incorporators.  —  The  name  and  place  of  residence  of  each  of  the  orij^inal 
subscribers  to  the  capital  stock,  who  are  in  practice  the  incorporators  of  the 
company. 

/'.  Duration.  —  The  corporation  may  have  perpetual  existence.  If  not,  the 
time  when  the  existence  is  to  commence  and  the  time  when  its  existence  is  to 
cease  must  be  stated. 

g.  Exemption  of  Stockholders  from  Liability  for  Corporate  Debts.  —  The 
certificate  must  state  whether  the  private  property  of  the  corporation  shall  be 
subject  to  the  payment  of  corporate  debts,  and  if  so  to  what  extent. 

h.  Regulation  of  the  Internal  Affairs  of  the  Corporation. — The  certificate 
may  contain  any  provision  desired  for  the  regulation  of  the  business  and  the 
conduct  of  the  affairs  of  the  corporation,  the  directors  and  stockholders,  or 
any  classes  of  stockholders  permitted  by  law  (sec.  5). 

4.  Statutory  Powers.  —  In  addition  to  the  common  law  powers  which 
are  enumerate<l  in  the  statute,  Delaware  corporations  have  the  following  ad- 
ditional powers:  To  guaranty,  purchase,  hold,  assign,  transfer,  mortgage, 
pledge,  or  otherwise  dispose  of  stock  and  bonds  of  other  corporations,  and  to 
exercise  in  the  case  of  stock  the  right  to  vote  thereon.  Corporations  also 
have  power  to  acquire  and  hold  their  own  shares,  but  not  to  vote  thereon. 
To  conduct  business  in  any  State,  Territory,  or  colony  of  the  United  States  or 
in  any  foreign  country.  To  issue  stock  for  property  or  services,  and  to  forfeit 
stock  for  non-payment  of  assessments  ;  to  have  one  or  more  offices  out  of  the 
State,  and  to  hold,  purchase,  mortgage,  convey  real  and  personal  property  out 
of  the  State,  provided  such  povi'ers  are  included  within  the  objects  set  forth  in 
the  certificate  of  incorporation.  To  classify  directors.  The  corporation  also 
has  express  power  to  create  preferred  stock,  if  desired,  provided  this  power  is 
set  forth  in  the  articles  of  incorporation.  The  consolidation  of  corporations 
carrying  on  any  kind  of  business  is  expressly  permitted.  Also  to  authorize 
voting  by  proxy,  to  forfeit  stock  for  non-payment  of  assessments  (sees.  2,  9, 
13,  14,  17,  19,  22,  29,  59,  135). 

State  ex  rel.  White  v.  Hancock,  2  Pen.  252  ;  4.5  Atl.  851. 

5.  Procuring  the  Charter.  —  The  certificate  of  incorporation  must  be 
signed  and  acknowledged  by  each  of  the  incorporators.  The  original  certifi- 
cate of  incorporation  is  then  recorded  in  the  oflice  of  the  Secretary  of  State 
and  a  certified  copy  thereof  recorded  in  the  office  of  the  recorder  of  deeds  in  the 
county  in  which  the  principal  office  as  stated  in  the  certificate  of  incorporation 
is  located.  When  these  acts  have  been  completed,  and  the  organization  tax  paid 
to  the  Secretary  of  State,  the  corporate  existence  begins  (sees.  5,  G,  7,  11). 
Collateral  inquiry  into  legality  of  corporate  existence  is  forbidden  (sec.  68), 

G.  Corporate  Indebtedness.  —  There  is  no  limit  upon  the  amount  of  in- 
debtedness which  a  coiporation  may  incur. 

7.  Organization  Tax.  —  The  organization  tax  is  15  cents  for  each  thou- 
sand dollars  of  the  total  authorized  capital  stock.  Said  tax,  however,  never  to 
be  less  than  §20  (.sec.  129). 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  filing  and 
indexing  certificate  of  incorporation,  -^2;  for  certified  copy  of  the  certificate  of 
incorporation  to  be  filed  in  the  office  of  the  recorder  of  deeds,  about  $1.50. 
Fee  to  the  recorder  of  deeds  for  recording  certified  copy  of  the  certificate  of 
incorporation  averages  about  $4.50. 

9.  Commencing  Business.  —  At  least  $1,000  of  the  capital  stock  must 
be  subscribed  for  before  the  corporation  can  begin  business.     If  the  corporate 

244 


SYNOPSIS- DIG  EST    OF   INCORPORATION   ACTS. 

business  is  not  begun  in  good  faith  within  Uvo  years  from  the  date  of  the  in- 
corporation, the  franchise  is  subject  to  forfeiture  (sees.  5,  67). 
P.  W.  &  B.  R.  R.  Co.  V.  Kent  Co.  R.  R.  Co.,  5  Houst.  127. 

10.  Organization  Meeting.  —  This  may  be  held  either  within  or  without 
the  State  (sec.  30).  The  incorporators  ordinarily  .sign  a  written  agreement 
fixing  the  time  and  place  within  the  State  for  the  organization  of  the  corpora- 
tion. The  incorporators  may  be  represented  by  proxy  if  desired.  Until  the 
directors  are  elected  the  signers  of  the  certificate  of  incorporation  have  by 
statute  control  of  the  affairs  and  of  the  organization  of  the  corporation,  and 
may  take  such  steps  as  are  proper  to  obtain  the  necessary  subscriptions  to 
stock.  As  soon  as  the  meeting  is  organized  by  the  election  of  a  chairman 
and  secretary,  by-laws  should  be  adopted.  If  the  certificate  of  incorporation 
so  provides,  the  directors  to  be  elected  at  the  organization  meeting  of  the 
corporation  may  adopt  by-laws.  The  incorporators  should  then  proceed  to 
the  election  of  not  less  than  three  directors.  The  directors  must  own  at  least 
three  shares  of  stock  and  one  must  be  a  resident  of  the  State.  The  by-laws 
may  provide  for  the  election  of  officers  either  by  the  stockholders  or  the  direc- 
tors. If  by  the  stockholders,  the  election  of  the  statutory  officers  should 
be  had  before  the  adjournment  of  the  organization  meeting.  Immediately 
after  the  adjournment  of  the  incorporators'  meeting  the  directors  named  in 
the  articles  of  incorporation  should  meet  and  elect  the  officers  of  the  corpora- 
tion. The  statutory  officers  are  a  president,  secretary,  and  treasurer.  The 
president  must  be  chosen  from  among  the  directors.  The  secretary  and 
treasurer  may  or  may  not  be  the  same  per.son,  and  if  the  corporation  have  a 
vice-president,  he  may,  if  deemed  advisable  by  the  directors,  hold  the  office 
of  vice-president  and  secretary  or  vice-president  and  treasurer,  but  not  the 
office  of  vice-president,  secretary,  and  treasurer.  The  directors  may,  if  au- 
thorized by  the  by-laws  or  by  a  resolution  passed  by  a  majority  of  the  whole 
board,  designate  two  or  more  of  their  number  to  constitute  an  executive  com- 
mittee, who  shall  have  and  exercise  all  the  powers  of  the  board  of  directors 
in  the  management  of  the  business  affairs  of  the  company  (sees.  7,  8,  9,  11). 

11.  Meetings  of  Stockholders  and  Directors.  —  The  stockholders  and 
directors  may  hold  their  meetings  outside  of  the  State  if  the  by-laws  so  pro- 
vide. It  will  be  foimd  more  convenient  to  hold  the  organization  meeting 
within  the  State  (sees.  30,  32). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  a  board  of  directors  of  not  less  than  three  directors,  one  of  whom 
must  be  a  resident  of  the  State.  The  <lirectors  must  hold  at  least  three  shares 
of  stock.  They  may  be  divided  into  classes  if  desired.  Power  may  be  given 
the  directors  to  adopt  by-laws  for  the  corporation,  by  inserting  such  a  provi- 
sion in  the  certificate  of  incorpoi'ation  (sees.  9,  12). 

h.  Liiihili/ies.  —  Directors  who  knowingly  cause  to  1)0  published,  or  give 
out  f)r  consent  thereto  in  writing,  a  statement  or  report  of  the  corporate 
business  or  condition  that  is  false  in  any  material  respect,  an;  jointly  and 
severally  liable  for  any  loss  or  damage  resulting  therefrom.  Directors  aro 
al.so  liable  for  declaring  dividen<ls  not  oarno<l,  for  refusing  to  make  certificates 
of  full  payment  of  the  capital  stork,  and  for  not  producing  list  of  stockholders 
at  election  (.sees.  28,  35,  37). 

1^5.  Stockholders'  Liabilities.  —  Stockholders  are  only  liable  for  their 
unpaid  stock  aub.sei  i|itii)ns  (sees.  20,  28). 

14.    Stock  Certificate.  —  Every  stockholder  is  entitled  to  have  a  stock 

245 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

cortificato  issiiod  to  him  signoil  by  tlic  president  and  treasurer.     Tlie  par 
value  of  stock  certificates  Tuay  be  any  amount  (sec.  15). 

15.  Preferred  Stock.  —  Corporations  have  the  power  to  create  two  or 
more  kimls  of  stock  with  such  preferences  and  voting  powers  and  with  such 
restrictions  or  qualifications  thereof  as  shall  be  stated  or  expressed  in  the;  cer- 
tificate of  incorporation.  The  preferred  stock,  however,  must  not  exceed  two- 
thirds  of  the  actual  capital  paid  in  in  cash  or  property.  The  preferred  stock 
may,  if  desired,  be  made  subject  to  redemption  at  not  less  than  par  at  a  fixed 
time  and  place  to  be  fixed  in  tlie  certificate  of  incorporation.  Preferred  stock- 
holders shall  be  entitled  to  receive  a  fixed  yearly  dividend  to  be  expressed  in 
the  certificate,  not  exceeding  eight  per  cent  payable  quarterly,  half  yearly 
or  ye.arly.  Such  dividends  may  be  made  cumulative.  Preferred  stock  can- 
not be  created  unless  provided  for  in  the  original  certificate  or  amended 
certificate  of  incorporation.  Corporations  are  authorized  to  issue  bonds  and 
to  confer  upon  the  hohlers  thereof  the  power  to  vote  in  respect  to  tlie  corpo- 
rate affairs  and  management  of  the  company,  to  the  same  extent  and  in  the 
same  manner  as  stockholders,  if  so  provided  in  the  certificate  of  incorporation 
(sec.  13). 

16.  Payment  of  Capital  Stock.  —  The  Delaware  Constitution  provides 
(Cons.,  Art.  IX.  sec.  3),  that  no  corporation  shall  issue  stock  except  for 
money  paid,  labor  done,  or  personal  property  or  real  estate  or  leases  thereof 
actually  received  by  the  corporation,  and  no  labor  or  property  shall  be 
received  in  payment  of  stock  at  a  greater  price  than  the  actual  value  at 
the  time  the  said  labor  was  done  or  pi-operty  delivered  or  title  acquired.  The 
statute  attempts  to  change  the  constitutional  provision  by  providing  that 
in  the  absence  of  fraud  in  the  transaction  the  judgment  of  the  directors 
as  to  the  value  of  such  labor  or  property,  real  estate  or  leases,  shall  be 
conclusive  (sec.  14). 

17.  Books.  —  The  original  or  duplicate  stock  ledger  containing  the  names 
and  addresses  of  the  stockholders  and  the  number  of  shares  lield  by  them 
respectively  must  be  kept  at  the  principal  office  within  the  State.  These  are 
open  to  the  inspection  of  stockholders.  The  general  books  of  account  need 
not  be  ki']it  within  the  State  (sec.  29). 

18.  Office.  —  The  corporation  must  maintain  a  principal  office  or  place 
of  business  in  the  State,  and  have  an  agent,  a  resident  of  the  State,  in  charge 
thereof.  A  sign  containing  the  name  of  the  corporation  must  be  displayed  at 
a  conspicuous  place  in  said  office  (sees.  32,  33,  137). 

10.  Reports.  —  Business  corporations  must  file  with  the  Secretary  of 
State  on  or  before  January  1st  a  report  stating  the  date  of  election,  principal 
office  within  the  State,  names  of  officers,  amount  of  authorized  capital  stock 
and  amount  actually  paid  in,  amount  invested  in  manufacturing  and  mining 
within  the  State.  This  report  may  be  made  by  the  president,  treasurer,  or 
other  corporate  officer  (Tax  Law,  sees.  2,  3). 

20.  Anti-Trust  Statute.  —  Tiiere  is  none  in  force  witliin  the  State. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  statutory 
grounds  for  foifeiture  of  charter  are  failure,  for  two  years  after  the  corpora- 
tion is  created,  to  commence  in  good  faith  the  business  to  be  promoted  or 
the  objects  or  purposes  for  which  it  was  organized.  Also  failure  for  two 
successive  years  to  pay  the  State  tax  assessed  against  it  which  it  is  required 
to  pay  under  the  law,  renders  the  charter  void  (sec.  67 ;  Tax  Law,  sees.  10,  11). 

22.  Amendments.  —  Tlie  certificate  of  incorporation  may  be  amended 
before  payment  of  any  part  of  the  capital  by  merely  filing  with  the  Secretary 

24:6 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

of  State  an  amended  certificate  of  the  filing  and  recording  in  the  same 
manner  as  the  original  certificate.  Such  amended  certificate  may  modify, 
change,  or  alter  the  original  certificate  if  desired.  Thereafter  amendment 
may  be  had  by  a  resolution  duly  adopted  by  the  board  of  directors  in  the 
first  instance,  setting  forth  the  amendment  proposed,  declaring  its  advisability, 
and  calling  a  meeting  of  the  stockholders.  The  amendment  is  adopted  by  a 
majority  vote  of  all  the  stockholders  given  at  such  meeting.  The  charter 
may  be  amended  in  the  following  respects :  Changing  the  corporate  powers 
and  purposes,  increasing  or  decreasing  the  authorized  capital  stock,  changing 
the  number  and  par  value  of  the  shares,  and  changing  the  corporate 
name  (sees.  22,  2-3,  26). 

23.  Annual  Franchise  Tax.  —  The  annual  franchise  tax  on  the  amount 
of  authorized  capital  stock  actually  paid  in  up  to  and  including  $3,000,000, 
is  one-twentieth  of  one  per  cent.  When  the  latter  exceeds  $3,000,000  and 
does  not  exceed  $.3,000,000,  one-fortieth  of  one  per  cent  and  a  further  sum 
of  $30  per  annum  is  exacted  for  every  million  dollars  or  part  thereof  in  excess 
of  $.3,000,000.  Manufacturing  or  mining  corporations  having  at  least  fifty 
per  cent  of  their  capital  stock  issued  and  outstanding  invested  in  manufactur- 
ing and  mining  within  the  State  are  exempt  from  the  tax  (Tax  Law,  sec.  4). 
The  tax  is  due  and  payable  on  March  1st. 

24.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended  by  complying  with  the  terms  of  the  statute  in  such  case  made 
and  provided  (sees.  131-131). 

25.  Dissolution  — Before  payment  of  any  part  of  the  capital  stock  or 
begiiiuiiig  business  the  incorporators  may  surrender  their  franchises  by 
filing  in  the  office  of  the  Secretary  of  State  a  certificate  verified  by  a 
majority  of  the  incorporators  to  the  effect  that  no  part  of  the  capital  has 
been  paid  and  that  such  business  has  not  been  begun.  A  majority  vote 
of  the  directors  cast  in  favor  of  the  dissolution  of  the  corporation,  coupled 
with  the  written  consent  of  two-thirds  in  interest  of  the  stockholders,  affords 
the  necessary  basis  for  a  dissolution  of  the  corporation  by  consent.  In 
addition  to  this,  notice  of  the  stockiiolders'  meeting  called  for  the  purpose 
of  voting  upon  the  question  of  dissolution  must  be  published  for  four 
successive  weeks.  The  con.sent  of  the  directors  and  ofiicers  must  be  certified 
by  the  president,  secretary,  and  treasurer  and  filed  with  the  Secretary  of 
State,  who  issues  his  certificate  that  sucli  consent  has  been  filed,  which 
certificate  must  be  published  for  four  consecutive  weeks.  If  all  the  stock- 
holders consent  in  writing,  no  meeting  or  notice  is  required  (sees.  38-58). 

Corn.  Bank  v.  Lockwood'.s  Adiii'r,  2  llarr.  8. 

20.  Foreign  Corporations.  —  Before  doing  business  witliin  the  State 
foreign  corporations  aie  ri^ijuired  to  file  with  the  Secretary  of  State  a  cer- 
tified copy  of  their  certificate  of  incorporation,  the  name  of  the  autliorized 
agent  within  the  State,  a  sworn  statement  of  assets  and  liabilities,  and 
must  pay  to  the  Secretary  of  State  a  licen,sc  fee  of  $.30.  The  corporation 
must  also  file  with  the  clorl<  of  the  superior  courts  in  each  of  the  counties 
(if  Delaware  a  certificate  giving  the  name  and  residence  of  tlie  agent  au- 
thorized to  accept  service  of  i)roces8  upon  the  corporation  (Laws  of  lf)03, 
chap.  39.5,  sees.  1-10). 

Dcringers  Adm'r  v.  DeringerH  Adm'r,  .5  HoiiHt.  416 ;  Standard  Sewing  Machine  Co. 
V.  Frame,  2  Pen.  4-30 ;  48  Atl.  188 ;  Love  v.  P.  &  J.  Co.,  3  Peu.  577  ;  52  Atl.  542. 

247 


INCORrORATION    AND    ORGANIZATION    OP   CORPORATIONS, 

DISTRICT  OF  COLUMBIA. 

(The  references  are  to  the  District  of  Columbia  Code  (1902),  unless  otherwise  stated.) 

1.  Statutes  under  •wrhich  Business  Corporations  may  incorporate.  — 

The  Husiiiess  Corporation  Act  in  force  in  the  District  of  Columbia  is  to 
be  found  iu  the  United  States  Statutes  at  Large,  Vol.  31,  pp.  12-84  ei  seq., 
as  amended  by  the  Acts  of  January  31,  1902  (U.  S.  Stat,  at  L.,  Vol.  32,  p.  2), 
and  Act  of  June  30,  1902  (U.  "s.  Stat,  at  L.,  Vol.  31,  p.  529  et  seq). 
Under  this  act  companies  may  be  formed  for  the  purpose  of  carrying  on 
any  business  or  enterprise  which  may  be  lawfully  conducted  by  an  individual, 
excepting  banks,  corporations  formed  to  buy,  sell,  or  deal  in  real  property,  rail- 
ways, and  such  other  enterprises  or  business  as  is  provided  for  by  special  acts. 

2.  Incorporators. — There  must  be  at  least  three  incorporators.  There 
are  no  residential  requirements  (sec.  G0.3). 

3.  Contents  of  the  Certificate  of  Incorporation  (sec.  606).  The  cer- 
tificate must  set  forth  : 

a.  Name.  —  The  act  does  not  forbid  the  use  of  a  name  already  in  use. 

b.  Purposes.  —  Object  for  which  it  is  formed.  The  recorder  of  deeds  only 
permits  the  insertion  of  one  line  of  business  in  the  certificate  of  incorporation. 
(See  sec.  612.) 

c.  Duration.  —  May  be  perpetual  if  desired. 

d.  Capital  Stock:  —  Amount  thereof  and  the  number  of  shares.  Both 
may  be  any  amount  desired. 

e.  Trustees.  —  Number  of  trustees  with  the  names  of  those  who  shall 
manage  the  corporation  for  the  first  year. 

/.  Domiciliary  Office.  —  Location  of  the  office  in  the  district  in  which  the 
operations  of  the  company  are  to  be  carried  on. 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of 
common  law  powers  the  act  authorized  voting  by  proxy  ;  also  forfeiture 
of  stock  for  non-payment  of  assessments.  The  statute  expressly  forbids  the 
purchase  of  stock  in   other  corporations  (sees.  607,   609,  613). 

Scaulon  v.  Snow,  2  D.  C.  Ap.  Cases,  137. 

5.  Procuring  the  Charter.  —  The  charter  must  be  subscribed  and  ac- 
knowledged by  each  of  the  incorporators,  and  then  filed  iu  the  office  of  the 
recorder  of  deeds  for  the  district  (sees.  605,  GOT). 

6.  Corporate  Indebtedness. — By  implication  the  debts  should  not  at 
any  time  exceed  the  amount  of  capital  stock  (sec.  634). 

7.  Organization  Tax.  —  There  is  no  organization  tax,  the  only  expense 
being  a  nominal  fee  for  recording  the  certificate  of  incorporation. 

8.  Filing  and  Recording  Fees.  —  To  the  recorder  of  deeds,  50  cents  for 
the  first  two  hundred  words  in  articles  of  incorporation.  15  cents  for  each 
hundred  words  in  addition  thereto,  extra  charge  of  25  cents  for  each  separate 
acknowledgment  over  one.     For  each  certificate  and  seal,  25  cents. 

9.  Commencing  Business.  —  IWisiness  may  be  commenced  as  soon  as  the 
articles  are  executed  and  filed  as  required  by  law.  Before  business  can  be 
transacted  ten  per  cent  of  the  capital  stock  must  be  paid  in  either  in  money 
or  property  at  its  actual  value  (sec.  613).  Within  thirty  days  after  the 
payment  of  the  last  instalment  of  the  capital  stock  the  president  and  a 
majority  of  the  trustees  must  make,  verify,  and  record  iu  the  office  of  the 

'  248 


STNOPSIS-DIGEST    OF   IXCOEPORATION   ACTS. 

recorder  of  deeds  a  certificate  stating  the  amount  of  capital  fixed  by  the 
certificate  and  paid  in  (sec.  616). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  district  (this  in  the  absence  of  any  statute  expressly  authoriz- 
ing such  meeting  to  be  held  without  the  district). 

11  Meetings  of  Stockholders  and  Trustees.  — Stockholders'  meetings 
must  be  held  within  the  district.  Owing  to  the  provision  that  a  majority 
of  the  trustees  must  be  residents  of  the  district,  it  is  in  practice  almost  a 
necessity  to  hold  trustees'  meetings  in  tlie  district,  where  a  majority  of 
the  body  is  required  to  be  present.  In  practice,  however,  through  the  ex- 
pedient of  the  appointment  of  an  executive  committee,  composed  of  a  majority 
of  the  board  of  trustees  to  whom  is  delegated  all  the  powers  of  the  full 
board  in  the  transaction  of  the  business  outside  of  the  District  of  Columbia, 
meetings  of  the  trustees  who  are  members  of  an  executive  committee  can 
be  held  outside  of  the  district.  Notice  of  the  holding  of  annual  meetings 
for  the  election  of  trustees  must  be  published  in  the  district  not  less  than 
thirty  days  previous  thereto  (sees.  6US,  609). 

12.  Trustees"  Qualifications  and  Liabilities,  a.  QunliJicaUons.  —  There 
must  be  not  less  than  three,  nor  more  than  fifteen  trustees,  who  shall  be 
stockholders,  and  a  majority  citizens  of  the  district  (sec.  608). 

h.  Liabilities.  —  Trustees  are  jointly  and  severally  liable  for  making  false 
certificates  or  reports,  knowing  the  same  to  be  false,  which  liability  extends 
to  all  debts  of  the  company  contracted  while  acting  as  such  trustees  (sees. 
61S,  619,  Gol).  They  are  also  liable  for  loans  of  money  upon  the  security 
of  the  company's  own  stock.  They  are  also  liable  for  illegal  declaration  of 
dividends  (sees.  621-623). 

1:}.  Stockholders'  Liabilities.  —  All  stockholders  are  severally  liable  to 
the  creditors  of  the  corporation  for  the  unpaid  amount  due  on  the  shares 
of  stock  held  by  them  respectively,  for  all  debts  and  contracts  made  by  the 
corporation  until  the  whole  amount  of  the  capital  stock  of  said  company  shall 
have  been  paid  in,  and  a  certificate  thereof  shall  have  been  made  and  recorded. 
This  certificate,  signed  and  sworn  to  by  a  majority  of  the  trustees  and  the 
president,  nmst  within  thirty  days  after  the  payment  of  the  last  instalment  of 
the  capital  stock  be  recorded  in  the  office  of  the  register  of  deeds  of  the 
district  (sees.  615,  616). 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
showing  the  number  of  shares  owned  by  him,  signed  by  such  officers  as  the 
by-laws    may  prescribe. 

15.  Preferred  Stock.  —  There  is  no  express  provision  authorizing  the 
issuance  of  pn'fcrn'd  stock. 

16.  Payment  of  Capital  Stock.  — Stock  may  be  paid  for  in  money  or 
property  at  its  actual  cash  value  (sec.  613). 

17.  Books. — A  stock  register  must  be  kept  within  the  district.  This 
should  be  open  to  the  inspection  of  stockholders  and  cieditors  (sees.  6J7, 
GJS,  6:51,  6:52). 

18.  Office.  —  Every  corporation  must  maintain  an  office  at  all  times 
witliin  the  district  (sec.  606). 

19.  Reports.  —  Every  corporation  shall  antmally  within  twenty  days 
from  the  lat  of  January  make  a  report,  which  must  be  published  in  a 
newspaper  published  in  the  district,  stating  the  amount  of  capital  and  the 
proportion  actually  paid  and  the  amount  of  existing  debts,  which  report  shall 

249 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

be  siiX"Pi^  kv  the  prosidont  and  a  majority  of  the  trustees  and  vorified  by 
the  oath  of  "the  prosidont  or  secretary  of  the  company  and  filed  in  the  office 
of  the  recorder  of  deeds  of  the  district.  The  only  penalty  for  failure  to 
make  this  report  is  that  any  creditor  of  the  corporation  may,  by  petition 
for  mandamus  against  the  corporation,  compel  such  publication  to  be  made, 
and  in  such  case  the  court  shall  require  the  corporation  to  pay  all  expenses 
of  the  proceeding  including  counsel  fees.  If  any  false  report  is  made,  all 
officers  who  have  signed  the  same  knowing  it  to  be  false  are  individually 
liable  for  all  debts  of  the  company  contracted  while  they  are  stockholders 
or  officers  thereof  (sees.  G17,  618). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  specially  ap- 
plicable to  the  District  of  Columbia. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  — The  act  does  not 
provide  for  forfeitui-e  of   charters. 

See  Gilbert  i:  Endowment  Ass'n,  10  D.  C.  Ap.  316. 

22.  Amendments.  —  Articles  may  be  amended  for  the  purpose  of  increas- 
ing or  decreasing  its  capital  stock  and  for  the  purpose  of  extending  its 
business  (sees.  633-639). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  the 
extension  of  corporate  existence  except  by  reincorporating  under  the  general 
statute. 

24.  Dissolution.  —  Corporations  may  be  dissolved  on  application  to  the 
court  having  jurisdiction,  for  cause  shown  (sees.  7G8-797). 

Morrow  r.  Edwards,  9  IMackey,  475. 

25.  Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax. 

26.  Foreign  Corporations.  —  Foreign  corporations  may  obtain  a  per- 
mit to  do  business  in  the  district  if  they  desire  to  do  so.  They  are,  further, 
required  to  publish  in  at  least  two  daily  newspapers  published  in  the  dis- 
trict semi-annually  during  the  months  of  March  and  September  of  each  year, 
a  full  statement  under  oath,  showing  their  capital  stock  and  the  amount 
paid  in,  the  assets  and  liabilities,  debts,  deposits,  dividends,  dues  as  well  as 
other  current  expenses  during  six  months  ending  January  and  July  1st  pre- 
ceding under  penalty  of  revocation  of  license  or  permit  to  do  business  in  the 
district. 

Eastern  Trust  &  Bankiug  Co.  v.  Willis,  6  D.  C.  Ap.  375. 

FLORIDA. 

(The  references  cited  below  are  to  the  Revised  Statutes,  1892,  unless  otherwise  stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Florida  is  found  in  the  Revised  Statutes, 
1892,  sees.  2122-2158  inclusive  and  acts  amendatory  thereof.  Special  pro- 
visions are  made  for  banking,  building,  and  loan,  insurance,  surety,  railway, 
canal,  and  telegraph  companies. 

2.  Incorporators  (Laws  of  1901,  chap.  4895).  —Three  or  more  persons. 
There  are  no  residential  requirements  (Laws  of  1901,  chap.  4895). 

Brown  v.  Company,  19  Fla.  472. 

3.  Contents  of  the  Charter.  —  Tlie  charter  must  set  forth: 

a.  Name.  —  Similarity  of  names  is  forbidden. 

b.  Domiciliary  Office.  —  The  place  or  places  of  business  must  be  set  forth. 

250 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

e.  Purposes.  —  The  general  nature  of  the  business  or  businesses  to  be 
transacted.  The  statute  clearly  contemplates  that  corporations  may  be 
created  for  more  than  one  purpose,  provided  none  of  the  purposes  set  forth 
are  covered  by  special  acts. 

d.  Capital  Stock.  —  The  amount  of  the  capital  stock  authorized,  the  number 
and  par  value  of  the  shares  into  -which  it  is  divided,  and  the  terms  and  con- 
ditions upon  which  it  is  to  be  paid  in  must  be  set  forth.  The  par  value  of  the 
shares  must  not  be  less  than  ten  dollars.  The  capitalization  may  be  any 
amount.  If  it  is  desired  to  pay  in  the  capital  stock  in  anything  but  money, 
this  fact  must  be  stated  in  the  charter.  This  statement  should  include  a 
provision  either  that  the  whole  capital  stock  or  some  portion  thereof  shall  be 
payable  in  property,  labor,  or  services  at  a  just  valuation  to  be  fixed  by  the 
incorporators  or  by  the  directors  at  a  meeting  called  for  that  purpose  (Laws 
of  1901,  chap.  4896). 

e.  Corporate  Existence.  —  The  charter  may  be  perpetual  if  desired. 

/.  Corporate  Officers.  —  The  charter  must  designate  the  officers  by  whom 
the  business  is  to  be  conducted,  the  times  at  which  they  are  elected,  and  the 
names  of  the  officers  who  are  to  conduct  the  business  until  those  elected  at 
the  first  election  shall  have  qualified.  The  directors  must  all  be  stockholders. 
The  statutory  officers  are  a  president  and  treasurer  or  cashier  and  such  other 
officers  as  the  by-laws  may  designate. 

g.  Corporate  Indebtedness.  —  The  highest  amount  of  indebtedness  to  which 
the  corporation  can  at  any  time  subject  itself  must  be  set  forth. 

h.  Incorporators.  —  The  names  and  residences  of  the  incorporators  must 
be  stated.  The  subscribing  incorporators  nmst  also  state  the  amount  of  stock 
subscribed  for  by  each.  Such  amount  shall  be  not  less  than  ten  per  cent  of 
the  authorized  capital  stock  (sec.  2123  as  amended  by  Laws  of  1901,  chap. 
4895). 

4.  Statutory  Powers.  —  Florida  statutes  enumerate  fully  the  common 
law  powers  of  corporations.  The  only  additional  powers  conferred  by  stat- 
ute are  the  right  to  vote  by  proxy  and  to  forfeit  stock  for  non-payment  of 
assessments.  The  power  to  adopt  by- laws  may  be  delegated  in  the  charter  to 
the  directors  if  desired  (.sees.  2121,  2129,  2137,  2146). 

5.  Procuring  the  Charter. — The  charter  must  be  subscribed  and  ac- 
knowledged by  each  of  the  incorporators.  Then  the  proposed  charter  together 
with  notice  of  the  intention  to  apply  to  the  governor  for  letters  patent  thereon, 
must  be  published  for  four  weeks,  once  each  week,  in  some  newspaper  pub- 
lislied  in  the  county  where  the  principal  place  of  business  is  to  be  located. 
This  notice  must  be  signed  with  the  names  of  at  least  three  of  the  incorpora- 
tors and  the  propo-sed  charter  must  be  filed  in  the  Secretary  of  State's  office 
during  the  four  weeks  of  pul)licati()n.  Then  the  proposed  charter,  accom- 
panied by  proof  of  publication  of  notice,  must  be  submitted  to  the  governor, 
who,  if  he  finds  it  to  be  in  proper  form,  and  for  objects  authorized  by  law,  and 
that  the  formalities  just  referred  to  have  been  observed,  will  issue  Utters 
patent  to  the  corporation.  The  Secretary  of  State  will  then  annex  to  the  letters 
patent  a  certified  copy  of  the  charter,  retaining  the  original  on  file  and  reconl- 
ing  it.  The  organization  tax  must  be  paid  to  the  Secretary  of  State,  who 
issues  a  certified  copy  of  the  charter.  Corporate  existence  commences  from 
the  time  the  certified  copy  of  the  charter  is  issued  by  the  Secretary  of  State. 
Tiie  statute  specifically  provides  that  letters  patent,  or  a  certified  copy  thereof, 
shall   be  conclusive  evidence  as  to  the  existence  of  the  corporation  in  all 

251 


INCOKPORATION    AND   OUnANTZATION    OF   CORPORATIONS. 

actions  ami  j>roceeilings  where  the  question  of  its  existence  is  only  collaterally 
involvoil,  and  prima  facie  evidence  in  all  other  actions  and  proceedings  (sees. 
21-J4-2120.  -Jloii). 

6.  Corporate  Indebtedness.  —  There  is  nostatutory  limitation  upon  the 
amount  of  corporate  indebtedness. 

7.  Organization  Tax.  —  Two  dollars  upon  each  thousand  dollars  of  the 
capital  stock,  proviiled  no  fee  shall  be  less  than  $5  or  more  thau  J5250  (sec. 
•JIJ.)  as  amended  by  Laws  of  liHIl,  chap.  489.">). 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State,  in  addition  to 
the  payment  of  organization  tax,  there  must  be  paid  a  filing  fee  of  $1.  The 
average  charge  for  certified  copy  of  letters  patent  and  charter  is  1350.  For 
publication,  usually  about  §10.  For  recording  certificate  of  incorporation 
together  with  allldavit  of  the  treasurer  as  to  amount  of  capital  stock  paid  in, 
in  the  oiTice  of  the  clerk  of  the  cii'cuit  court  in  the  county  where  the  corpora- 
tion does  business,  the  fees  usually  amount  to  about  !f3.50. 

9.  Commencing  Business.  —  Before  commencing  business  letters  patent 
together  Nvith  a  certified  copy  of  the  charter  must  be  recorded  in  the  office  of 
the  elerk  of  the  circuit  court  of  the  county  where  the  principal  place  of  busi- 
ness is  located.  There  must  also  be  filed  with  the  Secretary  of  State  and  with 
said  clerk  of  the  circuit  court  duplicate  affidavits  by  the  treasurer  of  the 
corporation  that  ten  per  cent  of  the  capital  stock  has  been  subscribed  and 
paid.     The  organization  tax  must  likewise  be  paid  (sec.  2127). 

10.  Organization  Meeting.  —  Must  be  held  within  the  State  (sec.  2141). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders  must  hold 
their  meetings  within  the  State.  The  directors  may  hold  their  meetings 
without  the  btate  if  the  by-laws  so  provide  (sees.  2137,  2141). 

Duke  V.  Taylor,  37  Fla.  64  ;  19  So.  172. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualijicalions.  —  The 
number  of  directors  is  not  limited  by  law.  They  must  all  be  stockholders. 
There  are  no  residential  requirements  (sees.  2121,  2138). 

b.  Liabilities.  —  Directors  participating  in  the  direction  of  illegal  dividends 
are  jointly  and  severally  liable  for  the  debts  of  the  corporation  then  existing 
to  the  extent  of  the  dividend  declared,  unless  they  at  the  time  object  to  the 
declaration  of  the  dividend  in  writing  (sec.  2103). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent 
of  their  unpaid  stock  subscriptions  (sec.  2152;  see  also  sec.  2127). 

Gibbs  V.  Davis,  27  Fla.  .531,  8  So.  633. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  the  by-laws  may  designate  for 
that  purpose.  Tlie  par  value  of  stock  certificates  may  be  any  amount  not  less 
than  810  (Laws  of  1!)01,  chap.  4896). 

15.  Preferred  Stock.  —  There  is  no  statutory  provision  expressly  author- 
izing the  issuance  of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Unless  otherwise  provided  in  the 
charter,  stock  sub.scriptions  must  be  paid  in  cash.  Incorporators  may  how- 
ever provide  in  the  charter  that  the  capital  stock,  either  in  whole  or  in  part, 
shall  be  payable  in  property,  labor,  or  services  at  a  valuation  to  be  fixed  in  the 
charter.  The  charter  must  also  set  forth  the  general  description  of  the  prop- 
erty to  be  taken  in  exchange  for  stock  (sec.  2128  as  amended  by  Laws  of 
1901,  chap.  4896). 

252 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

17.  Books.  —  The  secretary  or  other  officer  who  by  the  by-laws  is  made 
the  custodian  of  its  books,  is  required  to  keep  the  same  in  his  possession  at  all 
times  during  business  hours,  and  have  the  same  ready  to  be  inspected  by  any 
officer,  director,  or  committee  appointed  by  the  stockholdei-s  representing  one- 
tenth  of  all  the  subscribed  stock.  The  treasurer  or  cashier  is  required  to 
keep  a  stock  book  containing  a  list  of  the  stockholders  with  the  number  of 
shares  owned  by  each,  which  is  subject  to  inspection  by  any  stockholder  upon 
written  application  (sees.  2133,  21-17). 

18.  Office.  —  Every  corporation  must  have  a  place  of  business  within  the 
State,  and  the  custodian  of  its  books  and  papers  must  reside  within  tlie  State 
(sec.  2133;  see  also  sec.  2123  as  amended  by  Laws  of  1901,  chap.  4895). 

19.  Reports.  —  The  corporation  shall  annually  make  a  report  to  the  .State 
comptroller  containing  the  name  and  residence  of  each  stockholder,  with  the 
number  of  shares  and  the  par  and  cash  market  value  of  such  shares,  the  whole 
amount  of  capital  stock,  the  amount  actually  paid  in,  the  real  estate  subject 
to  assessment  of  taxes,  and  the  personal  estate.  A  statement  of  the  amount 
of  capital  stock  subscribed  and  the  amount  actually  paid  in  and  of  the  in- 
debtedness of  the  corporation  shall  be  filed  once  every  six  months  in  the 
office  of  the  State  comptroller  (sees.  2136,  2134). 

2(J.  Anti-Trust  Statute.  —  Trusts  to  control  meats,  cattle,  or  edible 
animals  are  prohibited  (Laws  of  1897,  chap.  4531). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Diversion  by  a 
corporation  of  its  funds  or  property  to  objects  other  than  those  named  in  the 
charter  or  to  payment  of  dividends,  leaving  insufficient  funds  to  meet  out- 
standing liabilities,  work  a  forfeiture  of  the  charter  (sec.  2162). 

22.  Amendments. — To  change  the  name  of  a  corporation  a  resolution 
to  that  effect  must  be  passed  by  a  majority  vote  of  the  stockholders  at  a 
meeting  called  for  that  purpose,  and  a  certificate  setting  forth  such  resolution 
under  the  corporate  seal  (attested  by  the  secretary)  must  be  filed  in  the  office 
of  the  Secretary  of  State.  Thereupon  letters  patent  shall  issue,  reciting  the 
change  in  name,  which  must  be  recorded  in  the  Secretary  of  State's  office  and  in 
the  office  of  the  clerk  of  the  circuit  court  where  the  original  charter  is  recorded. 

With  respect  to  increasing  or  reducing  the  capital  stock,  the  statute  reads 
that  any  corporation  desiring  to  alter  or  amend  its  charter  shall  do  so  in 
a  certain  prescribed  manner  as  set  forth  in  the  statute.  To  increase  the 
capital  stock,  notice  of  the  meeting  of  stockholders  called  for  that  purpo.se 
niust  be  published  once  a  week  for  four  consecutive  weeks  prior  thereto  in 
one  newspaper  jiublished  in  the  county.  In  addition  to  this  the  usual  notice 
for  stockholders'  meetings  provided  for  in  the  by-laws  must  be  served  upon  or 
mailed  to  the  stockholders.  If  at  sucli  meeting  two-thirds  of  all  the  stock- 
holders  vote  to  increase  the  capital  stock,  the  president  within  thirty  days 
tliereafler  must  make  a  return  to  the  Secretary  of  State  under  oath  of  the 
amount  of  such  increase  and  the  t<!rms  on  which  said  capital  stock  is  i.ssued, 
and  from  the  time  the  said  return  is  filed  the  increase  of  stock  shall  be  au- 
thorized, and  when  issued  shall  become  a  part  of  the  capital.  At  the  same 
time  the  capitalization  tax  must  lie  i)aid  upf>n  the  amount  of  increa.sed  capital 
Btock.  To  reduce  the  capital  .stock  or  alter  or  change  the  par  value  of  the 
shares  thereof  requin-s  the  unanimous  vote  of  all  the  stockholders  cast  at  a 
meeting  called  in  the  same  maimer  as  is  above  referred  to  in  the  case  of  the 
increase  of  the  capital  stock.  In  order  to  legalize  the  reduction  of  the  cajntal 
Btock,  the  president  must  make  within  thirty  days  thereafter  under  oath  his 

25;3 


INCOnrOUATION    AND   01?GANIZATI0N   OF   CORPORATIONS. 

return  to  the  Socielaiy  of  State  of  tlie  amount  of  such  decrease,  and  upon 
his  alhdavit  must  be  endorsed  a  certiticate  of  the  State  comptroller  that  in  his 
iud"inent  iho  ability  of  the  corporation  to  meet  its  outstanding  liabilities  and 
debts  will  not  be  impaired  thereby. 

To  amend  the  charter  in  other  respects  a  meeting  must  be  called  in  the  man- 
ner set  forth  above  with  reference  to  increasing  or  reducing  the  capitalization. 
At  this  meeting  the  proposed  amendment  must  receive  a  vote  of  three-fourths 
of  the  outstanding  capital  stock.  If  the  proposed  amendment  is  adopted,  the 
corporation  must  then  give  four  weeks'  notice,  once  each  week,  of  intention  to 
apply  to  the  governor  therefor,  in  some  newspaper  published  in  the  county 
wherein  the  jjrincipal  place  of  business  is  located,  setting  forth  the  desired 
alteration  or  amendment.  The  corporation  nmst  then  prepare  a  certificate 
which  shall  be  filed  in  the  Secretary  of  State's  odice  during  the  time  of  publi- 
cation, and  afterwards,  together  with  the  proof  of  publication  of  notice. 
These  are  all  submitted  to  the  governor,  who,  if  the  same  are  found  in  proper 
form  and  legally  adopted,  if  the  ]n-oposed  amendment  will  be  beneficial  and 
hawful  and  of  interest  to  the  community  and  in  accord  with  the  purposes  of 
the  charter,  will  approve  the  same,  and  tlicreupon  letters  patent  shall  issue 
reciting  the  amendment,  and  the  same  shall  then  be  recorded  in  the  office  of 
the  Secretary  of  State  and  in  the  ollice  of  the  clerk  of  the  circuit  court  where 
the  original  charter  was  recorded  (sees.  2148,  2149,  2150,  2151). 

23.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

24.  Extension  of  Corporate  Existence.  —  The  statute  makes  no  specific 
provision  for  extension  of  corporate  existence.     (See,  however,  sec.  2150.) 

25.  Dissolution.  —  A  majority  in  interest  of  the  stockholders  may  peti- 
tion the  circuit  court  for  the  dissolution  of  the  corporation,  and  the  court 
after  publication  for  a  reasonable  period  may  hear  the  matter  and  may  decree 
a  dissolution  (R.  S.,  sec.  2157). 

Gibbs  V.  Davis,  27  Fla.  531  ;  8  So.  633. 

26.  Foreign  Corporations.  —  There  are  no  statutory  provisions  prescrib- 
ing the  conditions  upon  which  foreign  corporations  may  do  business  in  this 
State. 

Duke  V.  Taylor,  37  Fla.  64 ;  19  So.  172. 


GEORGIA. 

(The  references  cited  below  are  to  the  Code  of  Georgia,  180.5,  unless  otherwise  stated.) 

1.  Statute  under  which  Business  Corporations  may  incorporate. — 
The  Business  Corporation  Act  of  Georgia  is  to  be  found  in  the  provisions  of 
sees.  18:31-1891,  2350,  of  the  Civil  Code  of  1895.  Under  it  a  private  corpora- 
tion may  be  formed  for  any  purpose  except  banking,  insurance,  railway,  canal 
navigation,  express  and  telegraph  companies,  by  application  to  the  superior 
court  of  the  county  in  which  the  corporation  desires  to  transact  business. 

2.  Incorporators.  —  There  must  be  at  least  two  incorporators.  There 
are  no  residential  requirements  (sec.  2350;  see  also  sec.  1854). 

3.  Contents  of  Petition  for  Charter.  — The  petition  addressed  to  the 
Superior  Court  must  state  : 

a.  Purposes.  —  The  objects  of  the  corporation  and  the  particular  business 
proposed  to  be  carried  on.     It  is  doubtful  whether  under  this  section  a  cor- 
poration may  be  incorporated  to  carry  on  more  than  one  line  of  business. 
254 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

b.  Name.  —  Similarity  of  names  is  not  permitted. 

c.  Capital  Slock.  —  The  amount  of  capital  stock  to  be  employed  and 
actually  paid  in.     Capital  stock  may  be  any  amount. 

d.  Domiciliary  Office  —  The  principal  phice  of  business  must  be  set  forth. 

e.  Duration.  —Corporate  existence  is  limited  to  twenty  years  (sec.  2350). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  conferred  :  To  receive 
donations  by  gift  or  will ;  to  create  a  lieu  upon  the  stock  for  debts  due  from 
stockholders  (sees.  1852,  2825).  The  rights  of  majority  and  minority  stock- 
holders are  enumerated  in  the  statute  (sees.  1859,  1800).  Corporations  are 
forbidden  to  buy  stock  in  other  corporations.  Corporators  have  an  interest  in 
the  franchises  of  the  corporation  of  which  they  cannot  be  deprived  except  by 
due  process  of  the  law.  :Mandanms  will  lie  against  the  corporation  to  enforce 
such  right  if  there  is  no  other  legal  remedy  (Cons.,  Art.  IV.  sec.  2,  p.  4). 

Trust  Co.  V.  State,  109  Ga.  736;  3.")  S.  E.  323. 

5.  Procuring  the  Charter  —  The  petition  must  be  published  once  a  week 
for  four  consecutive  weeks  in  the  nearest  newspaper  to  the  point  where  the 
corporate  business  is  to  be  carried  on.  When  the  court  grants  a  petition  by 
order  to  that  effect,  the  petition  and  the  order  must  be  recorded  by  the  clerk 
of  the  superior  court  in  the  record  of  "Superior  Court  charters."  The  pro- 
ceedings must  also  be  recorded  in  the  minutes  of  the  court  as  part  of  tlie 
proceedings  thereof.  The  order  itself  is  to  the  effect  that  the  petitioners  and 
tlieir  successors  are  incorporated  for  a  term  of  not  exceeding  twenty  years, 
with  the  privilege  of  renewal  at  the  expiration  of  that  time  in  the "^ manner 
provided  by  statut.i.  Before  business  can  be  commenced  ten  per  cent  of  the 
authorized  capital  stock  must  be  paid  in.  Corporate  business  must  be  com- 
menced within  two  years  after  tlie  issuance  of  the  charter  (sec.  2;]50). 

Existence  of  a  corporation  cannot  be  colhitcrally  attacked.  All  who  have 
dealt  with  the  corporation  as  such  are  estopped  from  denying  its  corporate 
existence. 

G.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  corporate  indebtedness.  If  the  corporation  desires  to  issue  bonds, 
It  must  furnish  to  the  Secretary  of  State  a  certified  statement  in  relation 
thereto  (Laws  of  1900,  chap.  139). 

7.  Organization  Tax.  —  There  is  no  organization  tax  imposed  as  such  in 
Georgia.  Under  the  statute  the  clerk  of  the  court  has  power  to  collect  tiie 
usual  fees  allowed  for  similar  services  in  other  cases.  These  fees  vary  from 
810  to  820. 

8.  Filing  and  Recording  Fees.  —  The  average  cost  for  filing  petition  for 
charter  in  the  ollice  of  the  county  clerk  and  for  docketing  and  spreading  tlie 
order  granting  petition  on  tiie  minutes.  S12.50.  The  cost  of  certified  copy  of 
tlic  charter  is  82..50  ;  cost  of  pui)lishing  articles  of  incori>oration  depends 
upon  wliether  tlu;  publication  is  made  in  a  county  or  city  newspaper,  and 
ranges  from  §5  to  S2<). 

9.  Commencing  Business. — Corporations  before  comnnncing  liusiness 
must  pay  in  ten  ]ier  cent  of  the  authorized  capital  stock  (sec.  2350).  liusiness 
must  be  commenced  within  two  years  (sec.  2350).  In  order  to  avoid  liability, 
the  incorporators  must  see  tiiat  the  minimum  capital  stock  has  been  subscribed 
for  before  commencing  busine.ss. 

McCaudless  v.  Company,  115  Ga.  9C8;  42  S.  E.  449. 


2 


r.  re 


INCORPOUATION    ANO    OIJ(^\NIZATION    OF   CORPORATIONS. 

10.  Organization  Meeting.  —  In  tlie  absence  of  any  statute  expressly 
authorizing];  tlie  liolding  oi  nu'clings  elsewhere,  organization  meetings  must  be 
held  within  tlie  State. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholdeis'  meet- 
ings  must  be  held  within  the  State.  Directors'  meetings  may  be  held  without 
the  State  if  the  by-laws  so  provide. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualijications.  —  The 
statute  makes  no  special  provision  with  relation  to  directors  other  than 
to  provide  that  they  shall  represent  the  corporation  and  its  stockholders. 
Their  number,  qualifications,  term  of  oflice,  and  powers  are  left  largely 
for  determiuatiou  to  the  by-laws  adopted  by  the  incorporators  (sees.  1858, 
18G1). 

b.  Liahililles.  —  Directors  are  liable  for  the  declaration  of  any  dividend  or 
the  distribution  of  money  among  the  stockholders  as  profits  when  such 
dividend  or  money  is  not  the  legitimate  proceeds  of  such  investments.  (See 
Code,  sec.  6!)1 ;  Laws  of  1902,  chap.  131,  p.  58). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  debts  of 
the  company  only  to  the  extent  of  their  unpaid  stock  subscriptions.  Stock- 
holders w^ho  are  incorporators  and  who  organize  the  company  and  transact 
business  under  that  name  before  the  minimum  amount  of  capital  stock  has 
been  subscribed  for,  are  liable  to  creditors  to  make  good  the  minimum  stock 
with  interest  (sees.  1889,  1890,  2350).  Whenever  a  stockholder  purchases 
stock  upon  which  there  is  a  liability  for  unpaid  subscriptions  it  shall  be 
exempt  from  further  liability  unless  the  corporation  fails  within  six  months 
from  the  date  of  the  transfer  (sec.  1888). 

Fouche  V.  Bank  of  Rome,  110  Ga.  827  ;  36  S.  E.  256  ;  Wilkinsou  y.  Bertock,  111  Ga. 
187  ;  36  S.  E.  623;  Harrcll  v.  Blount,  112  Ga.  711 ;  38  S.  E.  56. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  the  by-laws  may  designate 
for  that  purpose.     The  par  value  of  stock  certificates  may  be  any  amount. 

15.  Preferred  Stock.  —  There  is  no  statutory  provision  expressly  au- 
thorizing tlic  issuance  of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  The  statute  does  not  authorize  in 
express  terms  the  issuance  of  capital  stock  for  anything  except  cash. 

See  Ilayden  v.  Atlauta  Cotton  Factory,  61  Ga.  233. 

17.  Books.  —  The  corporation  is  required  to  keep  a  stock  register  which 
is  open  to  the  inspection  of  creditors  (Penal  Code,  sees.  591,  1891). 

18.  Office.  —  Every  corporation  must  maintain  an  office  within  the  State. 

19.  Reports.  —  No  annual  reports  are  required. 

20.  Anti-Trust  Statute.  —  V>y  statute  all  combinations  made  with  a  view 
to  les.sen  free  competition  in  the  importation  or  sale  of  articles  or  in  the 
manufacture  or  sale  of  articles  of  domestic  growth  are  illegal  and  void  (Laws 
of  189<;,  chap.  122). 

21.  Amendments.  — The  statute  does  not  give  the  right  of  amendment 
save  in  one  or  two  particulars  to  ordinary  business  corporations.  If  the  char- 
ter so  provides,  provision  may  be  made  for  increasing  or  decreasing  the  stock 
(sees.  1840,  23.50,  sub.  6). 

22.  Annual  License  Tax.  — Tliere  is  no  annual  license  tax. 

23.  Extension  of  Corporate  Existence.  —  Corfjorate  existence  may  be 
extended  by  complying  with  the  statutes  in  that  regard  (sec.  2350,  sub.  7). 

256 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

24.  Dissolution.  —  Corporations  may  be  voluntarily  dissolved  by  a  sur- 
render of  its  franchises  to  the  State.  This  is  ordinarily  done  by  application 
to  the  court.  The  court  has  statutory  power  to  appoint  a  receiver,  and  to 
administer  the  assets  (sees.  1882,  1884,  1886).  The  death  of  all  the  members 
of  the  corporation  or  so  many  of  them  as  to  leave  it  impossible  under  the 
charter  to  provide  succession  is  a  dissolution  thereof.   (See  also  sees.  1883-1887.) 

25.  Foreign  Corporations.  —  Foreign  corporations  of  States  which  give 
like  recognition  to  corporations  incorporated  in  Georgia  are  recognized  upon 
principles  of  comity.  There  are  a  few  minor  statutory  requirements  relative 
to  doing  business  within  the  State.     (See  sees.  1846-1850.) 

V.  B.  R.  R.  Co.  V.  E.  T.  &  G.  R.  R.  Co.,  14  Ga.  327 ;  A.  C.  Society  v.  Gartell,  23  Ga. 
448. 

IDAHO. 

(The  references  cited  below  are  to  the  Revised  Statutes  of  Idaho,  1887,  unless  otherwise  stated.) 

1.  Statute  under  -which  Business  Corporations  may  be  incorpo- 
rated. —  The  Business  Corporation  Act  of  Idaho  is  found  in  the  Revised 
Statutes  of  that  State,  sees.  2575  to  2653,  as  amended  by  the  Act  of  March  11, 
1901.  Special  acts  are  provided  for  bridge,  ferry,  flume,  boom,  gas,  fidelity, 
domestic  insurance,  railway,  telegraph,  telephone,  water  and  canal  companies. 

2.  Incorporators.  —  The  incorporators  may  be  any  number  of  persons 
not  less  than  five,  one  of  whom  must  be  a  resident  freeholder  of  the  State 
(sec.  2576  as  amended  by  Laws  of  1899,  p.  404). 

3.  Contents  of  the  Articles  of  Incorporation. — The  articles  must 
set  forth  : 

a.    Name.  —  Similarity  of  names  is  not  forbidden. 

h.  Purposes. — The  statute  uses  the  singular  noun  "purpose."  In  prac- 
tice, however,  the  Secretary  of  State  allows  articles  to  be  filed  providing  for 
any  number  of  purposes  not  covered  by  special  acts. 

c.  Domicilianj  Office.  —  The  place  where  the  principal  business  is  to  be 
tranisacted  must  be  set  forth. 

d.  Corporate  Existence.  —  May  be  any  number  of  years  not  exceeding 
fifty. 

e.  Board  of  Directors. — The  numl)or  of  the  directors  and  the  names  and 
residences  of  those  who  are  appointed  for  the  first  year.  The  number  must 
be  not  less  than  five,  nor  more  than  eleven.  The  directors  must  all  be  stock- 
holders and  a  majority  residents  of  the  State. 

f.  Capital  Stock:  —  The  amount  of  th(;  capital  stock  and  the  number  of 
shares  into  which  it  is  divid"d.  The  capital  stock  as  well  as  the  par  value  of 
the  shares  may  be  any  amount. 

g.  Stock  Subscriptions.  —  If  there  is  capital  stock,  the  amount  actually 
8ub.scribe(l  and  by  whom  should  be  set  forth  (.sec.  2579). 

4.  Statutory  Pov^era.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers  the  following  additional  powers  are  granted  :  To  remove 
directors;  to  authorize  voting  by  proxy;  to  forfeit  stock  for  non-payment  of 
a.s.se.ssments;  to  extend  corporate  existence  (sees.  2633,  2597,  2599,  2014- 
2626  inclusive,  2638). 

5.  Procuring  the  Charter  —The  articles  must  be  subscribed  and 
acknowledged  by  each  of  thr  incorporators,  'i'hc  articles  must  then  Ix'  filed  in 
the  office  of  the  county  recorder  of  the  county  in  which  the  [irincipal  place  of 
business  of  the  company  is  to  be  transacted,  and  a  copy  thereof,  certified  by 

17  257 


INCOUrOUATION    AND   ORGANIZATION    OF   CORPORATIONS. 

such  reoordor,  must  be  filed  with  tlie  Secretary  of  State.  Thereupon  the 
Seoretarv  of  State  issues  to  the  corporation  a  certificate  tliat  a  copy  of  the 
articles  containing  the  required  statenjeiit  of  facts  has  been  filed  in  his  office. 
Thereupon  the  corporate  existence  commences.  If  it  is  proposed  to  purchase  or 
locate  property  in  any  other  county  of  the  State,  there  must  be  filed  with  the 
county  recorder  of  that  county  within  sixty  days  after  such  purchase  or  loca- 
tion is  made,  a  certified  copy  of  the  articles  of  incorporation.  The  due  incor- 
poration of  any  company  or  its  right  to  exercise  corporate  powers  cannot  be 
inquired  into  collaterally  in  any  private  suit  to  which  such  de  faclo  corporation 
may  be  a  party  (sees.  2581,  2584,  2587,  2036). 

6.  Corporate  Indebtedness. — Must  not  exceed  amount  of  authorized 
capital  stock  (sec.  2G37). 

7.  Organization  Tax.  —  When  the  capital  stock  does  not  exceed  $25,000, 
the  organization  tax  is  $5;  w-hen  it  does  not  exceed  $100,000,  SIO;  when  it 
does  not  exceed  S.")00,000,  $20;  for  all  capitalization  in  excess  of  $500,000,  $25 
(Laws  of  1901,  p.  141). 

8.  Filing  and  Recording  Fees.  —  To  Secretary  of  State  for  copy  of 
articles  of  incorporation,  20  cents  per  folio;  for  affixing  his  certificate  and 
seal  of  State  thereto,  $1;  for  recording  articles  of  incorporation,  20  cents 
per  folio;  for  issuing  each  certificate  of  incorporation,  $3;  for  recording 
articles  in  recorder's  office  in  local  county,  50  cents;  for  certified  copy  of 
articles  of  incorporation  by  recorder  of  county  where  piincipal  place  of  busi- 
ness is  located,  20  cents  per  thousand  words. 

9.  Commenciug  Business.  —  Corporations  may  commence  business  as 
soon  as  the  articles  of  incorporation  are  filed.  Within  one  month  after  filing 
the  articles  of  incorporation  a  code  of  by-laW'S  must  be  adopted.  If  the  corpo- 
ration does  not  organize  and  commence  business  or  the  construction  of  its 
works  within  one  year  from  the  date  of  its  incorporation,  its  corporate  powers 
cease  (sees.  25S4,  2587,  2588,  2G36). 

10.  Organization  Meeting.  —  The  incorporators  within  one  month  from 
the  date  the  charter  is  issued  should  sign  a  written  agreement  fixing  the  time 
and  place  within  the  State  for  the  organization  of  the  corporation.  In  the 
absence  of  such  written  agreement  the  meeting  is  called  by  advertisement  of 
it  in  advance  of  the  date  of  the  meeting  in  some  newspaper  published  in  the 
county  in  which  the  principal  place  of  business  of  the  corporation  is  located. 
The  written  assent  of  the  holders  of  two-thirds  of  the  stock  subscribed  or 
two-thirds  of  the  members  shall  be  sufficient  to  adopt  a  code  of  by-laws  with- 
out a  meeting  for  that  purpose.  The  statute  sets  forth  certain  matters  which 
may  be  covered  by  the  by-laws  including  penalties  for  violation  of  by-laws  not 
exceeding  in  any  case  !$100  for  anyone  offence.  The  by-laws  must  be  certified 
by  a  majority  of  the  directors  and  the  secretary  of  the  corporation  and  copied 
in  the  book  of  by-laws  to  be  kept  at  the  principal  office  of  the  corporation 
within  the  State.  Immediately  after  the  adjournment  of  the  incorporators' 
meeting  the  directors  named  in  the  articles  of  incorporation  should  meet,  and 
after  the  election  of  a  chairman  and  secretary  should  proceed  to  the  election 
of  the  officers  named  in  the  by-laws.  These  officers  under  the  statute  must 
consist  of  a  president,  who  is  himself  a  director,  and  a  secretary  and  treasurer. 
The  law  provides  that  at  the  first  meeting  at  which  the  by-laws  are  adopted, 
or  at  such  subsequent  meeting  as  may  be  then  designated,  directors  must  be 
elected  to  hold  their  office  for  one  year  and  until  their  successors  are  elected 
and  qualify.      Organization  meeting  must  be  held  within  the  State  in  the 

258 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

absence  of  any  statute  authorizing  such  meetings  to  bo  held  without  the  State 
(sec.  2593). 

11.  Meetings  of  Stockholders  and  Directors.  —  All  meetings  of  direc- 
tors and  stockliolders  must  be  held  at  the  principal  place  of  business  of  the 
corporation  presumably  within  the  State  (sec.  2606.) 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — There 
must  be  not  less  than  five  directors  and  not  more  than  eleven,  all  of  whom  must 
be  stockholders  and  a  majority  citizens  and  residents  of  the  State  (sec.  2592 
as  amended  by  Laws  of  1899,  p.  404). 

b.  Liabilities.  —  Directors  are  jointly  and  severally  liable  for  authorizing 
the  payment  of  dividends  other  than  from  the  surplus  profits  arising  from  the 
business.  They  are  also  liable  for  dividing  or  withdrawing  or  paying  to  the 
stockholders  any  part  of  the  capital  stock  unless  they  enter  their  dissent  on 
the  minutes  of  the  directors  at  the  time,  or  when  not  present  as  soon  as  they 
are  informed  of  the  action  referred  to.  They  are  also  subject  to  further 
liability  for  certain  acts  specified  in  the  Revised  Statutes  (sees.  2596,  2603, 
7114-7127  iiichisive). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  amount 
unpaid  upon  the  par  or  face  value  of  the  shares  owned  by  them.  To  avail 
themselves  of  this  provision  of  the  statute  they  must  cause  to  be  written  or 
printed  under  the  corporate  name  on  its  stock  certificates,  letters,  bill  heads, 
and  all  official  documents  the  word  "limited"  (Laws  of  1899,  p.  115, 
amending  R.  S.,  sec.  2609 ;  see  also  Cons.,  Art.  XL  sec.  17). 

14.  Preferred  Stock.  —  There  is  no  statutory  provision  expressly  anthor- 
izing  the  issuance  of  ])referred  stock. 

l.j.  Payment  of  Capital  Stock.  -  Under  the  Idaho  Constitution  no  cor- 
poration can  issue  stock  except  for  labor  done,  services  performed,  or  money 
or  property  actually  received.  The  statute  however  provides  that  money 
actually  paid  upon  the  indebtedness  of  the  corporation  as  provided  by  such 
statute  may  be  credited  upon  stock  subscriptions  to  the  full  amount  so  paid 
(Cons.,  Art.  XL  sec.  9;  Laws  of  1899,  p.  11.5,  amending  sec.  2609). 

16.  Books.  —  The  stock  and  transfer  books  must  be  kept  within  the  State 
at  the  principal  office  of  the  corporation.  Also  a  book  of  by-laws  must  be 
kept  at  the  company's  office  within  the  State.  All  books  are  open  to  inspec- 
tion of  stockholders  and  creditors  (sees.  2591,  2639,  2640). 

17.  Stock  Certificates.  —  ICach  stockholder  is  entitled  to  a  certificate 
showing  the  numlier  of  siiares  owned  by  him,  signed  by  the  president  and 
secretary  (sec.  2610). 

18.  Office.  —  Every  corporation  must  maintain  an  office  within  the  State 
(sees  2.">91,  L'610). 

19.  Reports.  —  No  roports  are  requirr-d  to  be  filed. 

20.  Anti-Trust  Statute.  —  Combinations  for  fixing  prices  on  any  article 
of  commerce,  of  produce,  of  .sale,  or  of  c(jnsuniption  by  the  people  are  illegal. 

See  Cons  ,  Art.  XI.  sec.  18.) 

21.  Statutory  Ground  for  Forfeiture  of  Charter.  —  Failure  to  organize 
and  tr.'insact  the  rorporate  busi  loss  or  the  construction  of  corporate  works 
within  one  year  from  the  date  of  incorporation  is  a  ground  for  forfeiture 
(sec.  2636). 

22.  Extension  of  Corporate  Existence.  —  Every  corporation  formed 
for  a  period  le.ss  than  fifty  years  may,  at  any  time  prior  to  tlie  expiration  of 
the  terra  of  its  corporate  existence,  extend  such  term  to  a  period  not  exceed- 

259 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

Ins:  fifty  years  from  its  formation.  Such  extension  may  be  made  by  a  two- 
thirds  voto  of  the  stockholders  cast  at  a  meeting  called  by  the  directors  for 
that  purpose.  The  certificate  of  the  proceedings  must  be  signed  by  the  chair- 
man and  secretary  of  the  meeting  and  be  filed  in  the  office  of  the  county  recorder 
where  the  original  articles  of  incorporation  are  filed,  and  a  certified  copy 
thereof  must  be  filed  in  the  office  of  the  Secretary  of  State  (sees.  2049,  2G50). 

23.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

24.  Amendments.  —  Articles  may  be  amended  for  the  purpose  of  in- 
creasing or  decreasing  the  capital  stock,  by  a  majority  vote  of  the  directors 
calling  a  meeting  of  the  stockliolders  for  that  purpose.  At  this  meeting  two- 
thirds  of  the  capital  stock  must  vote  in  favor  of  increasing  or  decreasing  the 
capital  stock.  The  written  assent  of  the  holders  of  three-fourths  of  the  sub- 
scribed capital  stock  is  as  effectual  to  authorize  the  increasing  or  decreasing 
of  the  capital  stock  as  if  the  meeting  were  called  and  held  (R.  S.,  sec.  2637). 
The  act  also  authorizes  an  increase  in  the  number  of  directors  (sec.  2579), 
and  a  change  in  the  location  of  the  principal  place  of  business  (sec.  2008). 

25.  Dissolution.  —  Corporations  may  be  dissolved  upon  application  to 
the  courts  (sees.  2048,  5184-5191). 

S.  S.  T.  &  Co.  V.  Piper,  4  Llalio,  463 ;  40  Tac.  144. 

26.  Foreign  Corporations.  —  Every  foreign  corporation  before  doing  busi- 
ness within  the  State  must  file  with  the  county  recorder  of  the  county  in  which 
its  principal  business  is  to  be  transacted  a  copy  of  its  articles  of  incorporation, 
certified  by  the  Secretary  of  State  of  the  State  in  which  said  corporation  was 
organized,  and  file  in  the  office  of  the  Secretary  of  State  a  copy  of  the  articles 
certified  by  the  recorder,  and  pay  the  same  fees  as  provided  for  incorporating 
domestic  corporations.  Must  also  file  in  the  office  of  the  clerk  of  the  district 
court  of  the  county  where  such  principal  place  of  business  is  to  be  located 
and  also  in  the  office  of  the  Secretary  of  State  a  designation  of  some  person 
residing  in  said  county,  on  whom  process  may  be  served  (Cons.,  Art.  XI.  sec. 
10  ;  R.  S.,  sec.  2653,  as  amended  by  Laws  of  1903,  pp.  49-50). 

Vermont  Loan  &  Trust  Co.  v.  Hoffman,  5  Idaho,  376  ;  49  Pac.  314  ;  Beyer  v.  W. 
P.  R.  R.  Co.,  Idaho;  66  Pac.  826;  Thum  v.  Pyke,  Idaho;  66  Pac.  167. 

ILLINOIS. 

(The  reference3  cited  below  are  to  the  Revised  Statutes,  1899,  chap.  32,  unless  other- 
wise stated.) 

1 .  Statute  under  which  Business  Corporations  may  be  incorporated. 

—  The  Business  Corporation  Act  of  Illinois  is  found  in  the  Revised  Statutes  of 
that  State,  sees.  985-1063  inclusive.  Special  acts  are  provided  for  banking, 
insurance,  real  estate,  brokerage,  and  railway  corporations  (sec.  1). 

2.  Incorporators.  —  Any  number  of  persons  not  less  than  three  nor 
more  than  seven  may  form  a  corporation.  There  are  no  residential  require- 
ments (sec.  2). 

3  Statement  of  Incorporators  (sec.  2).  —  The  incorporators  must  make 
a  statement  setting  forth  : 

a.  The  Name  of  the  Proposed  Corporation.  —  Similarity  of  names  is  for 
bidden  (sees.  2,  28>^). 

b.  Purpose.  — The  statute  uses  the  singular  noun  "object."  The  Secre- 
tary of  State  permits  the  insertion  of  any  number  of  purposes  not  covered  by 
special  acts. 

260 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

c.  Capital  Stock.  —  Capital  stock  may  be  any  amount. 

d.  Number  of  Shares.  — The  par  value  of  the  shares  must  be  not  less  than 
$10  nor  more  than  $100  (sec.  7). 

e.  Domiciliary  Office.  —  The  location  of  the  principal  office  within  the 
State. 

/.    Duration.  —  The  corporate  existence  cannot  exceed  ninety-nine  years. 

•4.  Statutory  Powers.  —  The  statute  enumerates  the  common  law  powers 
of  corporations.  There  is  a  limitation  even  on  these  to  the  extent  tliAt  all 
real  estate  acquired  by  the  corporation  in  satisfaction  of  any  liability  shall  be 
offered  at  public  auction  at  least  once  in  every  year  unless  the  same  is  neces- 
sary and  suitable  for  the  business  of  the  corporation.  The  power  to  adopt 
by-laws  is  granted  to  the  board  of  directors  (sec.  6).  The  statute  expressly 
authorizes  mining  and  manufacturing  corporations  to  hold  stock  of  one  or 
more  railroads  connecting  different  plants  of  the  corporation  with  each  other 
and  with  other  railroads  or  wharves.  Whenever  consolidation  takes  place 
the  consolidated  company  is  liable  for  all  debts  of  the  two  consolidated  cor- 
porations. Power  is  also  given  to  authorize  voting  of  stockholders  by  proxy, 
to  permit  cumulative  voting  for  directors,  to  classify  directors,  and  to  forfeit 
stock  for  non-payment  of  assessments  (sees.  3,  5,  7;  Cons.,  Art.  XL  sec.  3). 

Com.  X.  B.  v.  Burch,  141  111.  519;  31  N.  E.  420. 

5.  Procuring  the  Charter.  —  The  statement  must  be  signed  and  acknowl- 
edged by  each  of  the  incorporators,  and  must  then  be  filed  in  the  office  of  the 
Secretary  of  State.  The  latter  will  then  issue  to  the  incorporators  a  license 
as  commissioners  to  open  books  to  the  subscription  for  capital  stock  at  such 
times  and  places  as  they  may  determine.  As  soon  as  the  capital  stock  is 
fully  subscribed  the  commissioners  nmst  convene  a  meeting  of  the  subscribers 
for  the  purpose  of  electing  directors  and  the  transaction  of  such  other  busi- 
ness as  may  be  proper.  Unless  the  time  and  place  of  the  meeting  are  fixed  by 
consent,  written  notice  thereof  nmst  be  given  to  each  subscriber  at  least  ten 
days  in  advance.  The  commissioners  then  make  a  full  report  of  their  pro- 
ceedings, including  a  copy  of  the  notice  of  the  meeting  or  agreement  fixing 
the  time  and  place  of  such  meeting  togetiier  with  a  copy  of  the  subscrij)tion 
list,  the  names  of  the  directors  elected  and  their  terms  of  office,  which  report, 
after  having  been  sworn  to  by  a  majority  of  the  commissioners,  is  filed  in  the 
office  of  the  Secretary  of  State.  There  must  also  be  filed  with  the  Secretary 
of  State  a  statement  setting  forth  the  post-office  address  of  the  corporation's 
business  office,  giving  street  and  number.  The  Secretary  of  State  thereupon 
issues  a  certificate  of  complete  organization  of  the  corporation.  'J'his  last  must 
be  filed  in  the  otfice  of  tlie  reconler  of  deeds  of  tlie  county  wliere  the  principal 
office  of  the  corporation  is  located.  Upon  the  recording  of  tlie  latter  the  cor- 
poration is  deemed  fully  organized  and  may  proceed  to  business  (sees.  2,  3; 
Laws  of  1!)01,  p.  IL'4). 

I'eojilo  V.  Rose,  188  111.  2t>8  ;  .-JO  N.  E.  432. 

0.  Corporate  Indebtedness  —  Corporate  indebtedness  should  not  ex- 
ceed the  authorizerl  capital  stock  (sec    16). 

7.  Organization  Tax.  —  The  organization  tax  on  any  caiiitalization  up  to 
i?j,5()0  is  8:}0;  up  to  i3o,()00  is  s^'jO  ;  over  ■•?').( )00,  .?.")0,  and  an  additional  §1 
for  each  thou.sand  dollars  of  capitalization  over  !?.'),(M)0  (Laws  of  1890, 
p.    117). 

8.  Filing  and  Recording   Fees.  —  For  receiving  and  filing  articles  ot 

2G1 


liNCOUPORATIOX    AND    ORGANIZATION    OF    CORPORATIONS. 

incorporation.  SI ;  for  afTixing  certificate  to  articles  of  iiicorjioration  f$l ;  for 
copvinij  articles  1")  cents  per  folio.  The  recording  fees  in  local  county  office 
average  ahout  152.. ')0. 

fl.  Commeucing  Business.  — Corporations  may  commence  business  as 
eoon  as  the  Secretary  of  State  issues  a  certificate  of  complete  organization 
and  the  same  is  recorded  in  the  office  of  the  recorder  of  deeds  of  the  county 
■where  the  principal  place  of  business  of  said  corporation  is  located.  The  cor- 
poration must  organize  and  proceed  to  business  within  two  years  after  the 
Secretary  of  State  issues  his  certificate  of  complete  organization  (sec.  4). 

People  V.  N.  S.  Bank,  129  111.  618;  22  N.  E.  288;  Gent.  v.  M.  &  M.  I.  Co., 
107  111.  652. 

10.  Organization  Meeting. — In  the  absence  of  any  statute  providing 
otherwise,  this  meeting  must  be  held  within  the  State.  The  commissioners 
appointed  by  the  Secretary  of  State  to  receive  stock  subscriptions  have  power 
under  tlie  statute  to  convene  a  meeting  of  the  subscribers  to  the  capital  stock 
of  the  corporation  for  the  purpose  of  electing  directors,  etc.  Notice  of  this 
meeting  may  be  waived  in  writing  (the  statute  requires  ten  days'  notice),  the 
time  and  place  fixed  for  said  meeting  to  be  designated  therein.  At  this  meet- 
ing the  subscribers  to  the  capital  stock  may  A'ote  in  person  or  by  proxy.  Cu- 
mulative voting  is  permitted  if  desired.  Stockholders  may  divide  the  board  of 
directors  into  three  classes,  to  hold  office  for  one,  two,  and  three  years  respec- 
tively. After  the  Secretary  of  State  has  issued  a  certificate  of  complete  or- 
ganization, the  board  of  directors  sliould  meet  and  after  effecting  a  tenii)orary 
organization  should  first  adopt  a  code  of  by-laws.  They  then  should  proceed 
to  the  election  of  a  president,  secretary,  and  treasurer,  and  such  other  officers 
as  shall  be  designated  by  the  by-laws  so  adopted  (sec.  3). 

11.  Meetings  of  Stockholders  and  Directors  — Stockholder's  meetings 
must  be  held  within  the  State.  Directors'  meetings  to  be  valid  must  be  held 
■within  the  State,  unless  any  action  taken  by  the  board  without  the  limits  of 
the  State  is  either  authorized  or  the  action  thereat  taken  ratified  by  a  vote  of 
two-thirds  of  the  directors  cast  at  a  regular  meeting  of  said  board  (sec.  20). 

Harding  v.  Company,  182  111.  5.51  ;  55  N.  E.  577. 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  not  less  than  five  nor  more  than  eleven  dircctoi-s.  'J'here  are  no  resi- 
dential requirements.  Directors  may  be  divided  into  classes  if  desired. 
Cumulative  voting  for  directors  is  mandatory  (sees.  3,  G), 

Fey  V.  Company,  32  111.  Ap.  618. 

b.  Liabilities.  —  If  the  indebtedness  of  any  corporation  shall  exceed  the 
amount  of  its  capital  stock,  the  directors  assenting  thereto  are  individually 
liable  for  such  excess  to  the  creditors  of  the  corporation.  They  are  also  jointly 
and  severally  liable  for  all  debts  of  the  corporation  then  existing  or  thereafter 
contracted  when  they  declare  and  pay  any  dividends  when  the  corporation  is 
insolvent  or  any  dividend  the  payment  of  which  would  render  the  corporation 
insolvent  or  which  diminishes  the  amount  of  its  capital  stock;  also  for  as- 
suming to  exercise  corporate  powers  before  all  the  capital  stock  is  subscribed 
in  good  faith  (sees.  10,  17,  18,  19,  21). 

Greene  v.  Mosten  et  al,  66  111.  Ap.  345;  Kent  v.  Clark,  181  111.  237 ;  54  N.  E.  967, 

13.  Stockholders'  Liabilities.  —  Stockholders  are  personally  liable  for 
the  amount  unpaid  njion  their  stock  (sec.  8).     The  law  also  provides  that  all 

262 


SYNOPSIS-DIGEST    OF    INCORPORATION   ACTS. 

persons  assuming  to  exercise  corporate  powers  or  to  use  a  corporate  name  with- 
out complying  with  the  law  in  regard  to  procuring  charters  before  all  stock 
named  in  the  articles  of  incorporation  is  subscribed  in  good  faith,  shall  be 
liable  for  all  debts  and  liabilities  contracted  by  them  in  the  name  of  such 
corporation  (sec.  IS). 

Sprague  r.  Nat.  Bank,  172  III.  149;  .50  N.  E.  19;  First  Nat.  Bank  v.  Companv,  191 
111.  128 ;  60  N.  E.  859 ;  Sherwood  i-.  Bank,  195  111.  112  ;  62  N.  E.  835  ;  Foote  v.  Bank, 
194  111.  600  ;  62  N.  E.  834  ;  McCoy  v.  E.xposition,  186  111.  356 ;  57  N.  E.  1043  ;  Flor- 
eheim  i-.  Bank,  192  111.  382;  61  N.  E.  491. 

14.  Preferred  Stock.  —  There  is  no  statutory  provision  expressly  author- 
izing the  issuance  of  preferred  stock. 

First  Nat.  Bank  i:  Company,  191  111.  128;  60  N.  E.  859. 

15.  Payment  of  Capital  Stock.  —  The  statute  is  silent  as  to  how  the 
capital  stock  shall  be  paid.  Under  the  common  law  rule,  in  the  absence  of  any 
statutory  prohibition,  stock  may  be  paid  for  in  cash  or  in  property  taken  in 
good  faith  at  a  fair  valuation  (Paniialee  v.  Price,  208  111.  514: ;  7U  X.  E.  725). 

16.  Books.  —  The  directors  must  keep  at  the  principal  office  within  the 
State  books  of  account  of  the  corporate  business  (sec.  13).  They  are  open  to 
inspection  of  stockholders. 

17.  Stock  Certificates.  —  Each  shareholder  is  entitled  to  a  certificate 
showing  the  number  of  shares  owned  by  him  signed  by  such  officers  as  the 
by-laws  shall  prescribe. 

18.  OfBce.  —  Every  corporation  must  maintain  an  office  within  the  State 
(.sees.  2,  1-)). 

10.  Reports.  —  Before  receiving  a  certificate  of  complete  organization, 
corporations  .'^hall  file  with  the  Secretary  of  State  a  statement  showing  the 
post-oltice  address  of  its  bu.siiiess  office,  giving  street  and  number,  and  it  shall 
annually  between  February  1st  and  March  1st  file  with  the  Secretary  of  State 
a  statement  showing  the  location  of  the  principal  office  within  the  State,  with 
town,  street,  and  number,  names  of  its  officers  and  their  residences,  —  town, 
street,  and  number,  —  date  of  expiration  of  their  terms  of  office;  whether  or 
not  the  corporation  is  pursuing  an  active  business  under  its  charter,  and  the 
kind  of  business;  report  must  be  under  the  corporate  seal,  signed  and  sworn 
to  by  some  officer  of  the  corporation,  and  a  fee  of  -SI  must  be  paid  to  the 
Secretary  of  State  (Laws  of  1903,  pp.  121.  122).  Within  twenty  days  from 
December  Ist  of  each  year,  a  statement  must  be  filed  with  the  Secretary  of 
State,  and  recorded  with  the  recorder  of  the  county  wherein  the  principal 
j)lace  of  business  of  the  corporation  is  located,  showing  the  real  estate  hold- 
ings of  the  corporation. 

20.  Anti-Trust  Statute.  —  Illinois  has  an  elaborate  statute  forbidding 
pools,  trusts,  and  coiiil)iiiations  of  every  class  and  description.  This  statute 
ha-s  in  part  at  least  been  declared  unconstitutional  (Crini.  ("ode,  sees.  209  a, 
209  b,  615). 

I).  &C.  F.  Co.  V.  People,  l.J6  111.  448;  41  N.  E.  188;  Harding  r.  Company,  182 
1)1.551  ;  55  N.  E.  577. 

21 .  Statutory  Ground  for  Forfeiture  of  Charter.  —  The  charter  may  be 
forfeiti'd  for  failure  to  org.inizi'  and  cotnmeMce  bu.>iness  within  two  years 
from  the  date  of  incorporation.  It  is  also  subject  to  forfeiture  for  entering 
into  illegal  trusts,  pools,  and  combinations  (.sees  4,  269  m). 

N.  &  S.  U.  S.  Co.  V.  People,  147  111.  234;  35  N.  E.  608;  Independent  Medical 
College  V.  People,  182  111.  274  ;  55  N.  !•:.  345. 

2G3 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

22.  BxteiiBion  of  Corporate  Existence.  —  There  is  no  statutory  provi- 
sion for  extending  corporate  existence  after  the  expiration  of  the  term  limited 
in  the  charter.     (See  sec.  10.) 

2  ).    Annual  License  Tax.  —  Tliere  is  no  annual  license  tax. 

24.  Amendments. — -The  stockholders  may  at  any  meeting  called  by 
the  directors,  by  vote  representing;  two-thirds  of  the  corporate  stock,  change 
the  corporate  name  or  place  of  business,  enlarge  or  change  the  object  for 
which  the  corporation  was  formed,  increase  or  decrease  capitalization,  change 
number  of  shares  or  number  of  directors,  managers,  or  tiustees,  increase  or 
decrease  par  value  of  shares,  decrease  capitalization  not  to  prejudice  of  credit- 
ors, or  consolidate  with  another  corporation  carrying  on  the  same  geiisral 
business  in  the  same  vicinity  (Laws  of  1903,  pp.  IIG,  117).  A  certificate  of 
the  vote  by  which  such  change,  etc.  was  made,  verified  by  the  president,  must 
be  filed  with  the  Secretary  of  State. 

25.  Dissolution.  —  Any  court  of  competent  jurisdiction  may  decree  dis- 
solution of  a  corporation  upon  ptitition  therefor.  Voluntary  dissolution  may 
be  effected  by  vote  of  two-thirds  of  capital  stock  (sees.  49  a,  49  b,  149). 

26.  Foreign  Corporations.  —  A  foreign  corporation,  in  order  to  do  busi- 
ness in  this  State  or  sue  in  its  courts,  must  designate  some  person  as  its  agent 
upon  whom  service  of  legal  process  may  be  had,  and  must  maintain  an  office 
in  the  State  fc^'  transaction  of  business,  and  where  proper  books  shall  be  kept ; 
and  it  must  file  with  the  Secretary  of  State  a  certified  copy  of  its  charter  or 
certificate  of  incorporation,  and  forward  therewith  a  statement  verified  by  one 
of  its  officers,  showing  the  proportion  of  its  capital  stock  represented  in  this 
State  by  the  corporate  property  located  and  business  transacted  therein,  also 
showing  name  and  address  of  the  agent  in  this  State;  and  shall  pay  to  the 
Secretary  of  State,  upon  the  proportion  of  its  capital  stock  so  represented, 
fees  equal  to  those  required  of  domestic  corporations.  It  must  report  to  the 
Secretary  of  State  by  verified  statement  any  change  in  name  or  address  of  its 
agent,  and  any  increase  or  decrease  of  proportion  of  its  capitalization  repre- 
sented in  this  State  by  its  property  and  business  therein  (Laws  of  1899, 
p.  118).  A  foreign  corporation  may  by  letter  of  attorney  constitute  any 
person  its  agent  to  perform  any  act  or  business  which  the  corporation  may  do 
or  carry  on  (sec.  GG,  chap.  32). 

Spry  Lumber  Co.  v.  Chappell,  184  111.  5.39  ;  56  N.  E.  794  ;  Richardson  v.  U.  S.  M. 
&  T.  Co.,  194  111.  259 ;  62  N.  E.  606. 


INDIANA. 

(The  references  are  to  the  Revised  Statutes,  1897,  unless  otherwise  .stated.) 

1 .  Statute  under  -gyhich  Business  Corporations  may  be  incorporated. — 
The  Business  Corporation  Act  of  Indiana  is  found  in  Tliornton's  Statutes,  1897 
(sees.  3490-3519,  5202-5256).  Important  amendments  to  the  original  act  are 
found  in  the  Session  Laws  of  1901  and  1903.  Special  acts  are  provided  for 
manufacturing,  mining,  mechanical,  and  chemical  companies  (sees.  5051,  5087). 

2.  Incorporators.  —  Any  number  of  persons  not  less  than  three  may  be 
incorporators.  There  are  no  residential  requirements  (Laws  of  1901,  chap. 
127  ;  Laws  of  1903,  chap.  73). 

3.  Contents  of  the  Articles  of  Association.  —  The  articles  of  associa- 
tion must  set  forth : 

204 


SYNOPSIS-DIGEST    OF   INCORPORATION   ACTS. 

a.  Name.  —  The  corporate  name  of  the  proposed  corporation.  Similarity 
of  names  is  forbidden  as  to  domestic  corporations. 

b.  Capital  Stock.  —  The  articles  must  set  forth  the  amount  of  capital  stock, 
and  the  number  of  shares  into  which  the  same  shall  be  divided,  with  the  par 
value  of  the  same.  The  capital  stock  may  be  any  amount  "(except  gas  and  oil 
companies,  where  capital  stock  is  limited  to  .?2.000,000),  and  the  par  value  of 
the  shares  may  be  any  amount  not  exceeding  §100.  (See  Laws  of  1903,  chap. 
128.) 

c.  Purposes.  —  The  object  of  the  corporation  with  the  proposed  plan  of 
doing  business  must  be  fully  set  out.  The  purposes  may  iiichide  any  or  all 
of  the  purposes  included  in  any  one  of  the  twenty-six  classes,  which  may  be 
described  in  general  terms  as  follows  :  horticultural,  literary,  drainage,  educa- 
tional, eleemosynary,  cemetery,  fraternal,  military,  fire,  shade  trees,  safe  de- 
posit, and  loan  companies,  hotels,  real  estate  and  rental  companies,  mining, 
health  resorts,  oil  and  gas  wells,  live-stock,  trading  corporations,  commission 
merchants,  title  insurance  abstract  and  loan,  women's  exchange,  bond  and 
money  brokerage,  medical  and  scientific  research,  storage,  transfer,  and  scien- 
tific purposes  (Laws  of  1901,  sees.  1-28).  The  amendment  of  1903  permits 
incorporation  for  more  than  one  of  several  designated  classes  of  purposes 
(Laws  of  1903,  chap.  73). 

d.  Incorporators.  —  Names  and  places  of  residence  of  the  incorporators 
must  be  set  forth. 

e.  Domictliary  Office.  —  The  principal  place  of  business  must  be  set  forth, 
which  by  implication  would  seem  to  refer  to  the  principal  place  of  business 
within  the  State. 

/.  Duration.  —  The  terra  of  existence  must  not  exceed  fifty  years  for 
mining  and  manufacturing  gompanies.  In  all  others  except  banks,  health 
resorts,  and  telephone  companies,  the  duration  may  be  unlimited. 

g.  Corporate  Seal.  —  A  demonstration  of  the  corporate  seal  nmst  be 
attached. 

k.  Board  of  Directors.  — The  manner  of  election  or  appointment  of  directors 
and  officers  who  are  to  manage  the  business  must  be  set  forth. 

i.  Number  and  Na)nes  of  Directors.  — The  number  of  directors  together  with 
the  names  of  those  who  shall  manage  the  affairs  for  the  first  year  must  a]>pear. 
If  desired,  the  date  of  the  annual  meeting  may  be  set  forth  in  the  articles 
(Laws  of  1901,  ciiap.  127,  sec.  1  ;  Laws  of  1903,  chaps.  37,  73,  128). 

4.  Statutory  Powers. — The  statute  fully  enumerates  the  implied  com- 
mon law  powers  of  corporations.  The  consolidation  of  two  corporations  is 
expre.ssly  permitted.  Corporations  are  expressly  I'orbiilden  to  become  stock- 
hoMers  in  otlier  corporations  except  that  railroads  may  own  stock  in  telegraph, 
telfphone,  union  railway,  and  bridge  companies  under  certain  circumstances, 
and  that  manufacturing  corporati(jns  may  own  stock  in  companies  organized 
for  th(!  purpose  of  furnishing  wati-r  power  (Laws  of  19(»1,  chap.  127,  see.  28; 
Laws  of  1903,  chap.  220).  .May  issue  jireferred  stock,  vote  by  jiroxy,  and 
forfeit  stock  for  non-payment  of  assessments  (sees.  349l',  :!.")09,  5204,  5200, 
0212  ;  Laws  of  1901,  chaps.  127,  197;  Laws  of  1903,  chap.  220). 

William"  t>.  Company,  25  Ind.  Ap.  .1.51  ;  57  N.  E.  581  ;  Indiana  Bund  Co.  v.  Ogle, 
22  Ind.  Ap.  593  ;  .54  N.  E.  407. 

0.  Procuring  the  Charter.  — The  articles  of  association  must  be  signed 
and  acknowledged  by  each  incorporator.  Tliey  must  then  be  presented  to  the 
Secretary  of  State  for  filing.      At  tlii.i  time  there  must  be  presented  a  full 

2G5 


INTOUl'ORATION    AND    OI!f; AMZATIOX    OF    CORPORATIONS. 

written  or  printoil  statement  of  tlie  proposed  plan  of  doing  business.  If 
iipon  examination  the  articles  are  found  to  be  accordintj  to  law,  the  pro- 
posed plan  of  doiuij  business  legal,  and  the  organization  tax  and  filing  foes 
paid,  the  Secretary  of  State  will  issue  to  the  corporation  a  certificate  of 
incorporation. 

This  is  prima  facie  evidence  of  incorporation.  Thereafter  the  corporation 
must  tile  a  duplicate  of  its  articles  in  the  recorder's  ollice  of  the  county  in 
which  the  principal  place  of  business  is  located,  and  upon  paying  the  filing  and 
recording  fees,  the  law  provides  that  such  record  or  a  certified  copy  thereof 
shall  be  conclusive  evidence  of  the  matters  and  things  therein  stated.  It 
appears,  however,  from  the  section  which  follows  the  preceding  (sec.  28), 
that  the  corporate  existence  does  not  commence  until  the  recording  in  the 
recorder's  othce.  The  corporation  must,  at  the  time  of  filing  its  articles 
with  the  Secretary  of  State,  file  a  copy  thereof  in  the  office  of  the  State 
Auditor,  and  must  also  file  from  time  to  time  copies  of  its  constitution  or 
by-laws  thereafter  adopted  (Laws  of  1901,  chap.  127,  sees.  27-29;  Laws  of 
1903,  chap.  73). 

Doty  V.  Paterson,  155  Ind.  60;  56  N.  E.  668 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  corporate  indebtedness. 

7.  Organization  Tax. — Where  the  capital  stock  is  -1^10,000  or  less,  $10; 
for  all  capital  stock  over  $10,000  the  tax  is  one-tenth  of  one  per  cent  (R.  S. 
1894,  sec.  7031). 

8.  Filing  and  Recording  Fees.  — The  Secretary  of  State  is  entitled  to 
a  fee  of  $1  for  recording  articles  of  incorporation  not  exceeding  two  hundred 
words,  also  50  cents  for  certificate.  The  county  recorder  is  authorized  to 
collect  10  cents  per  hundred  words  for  recording  articles  of  incorjioration. 

9.  Commencing  Business.  — Corporations  may  commence  business  as 
soon  as  the  Secretary  of  State  issues  a  certificate  of  incorporation  and  a  dupli- 
cate of  the  articles  filed  in  the  Secretary  of  State's  office  are  recorded  in  the 
recorder's  office  of  the  county  where  the  principal  place  of  business  of  the 
corporation  is  located.  Manufacturing  companies  must  pay  up  their  capital 
stock  within  eighteen  months  after  incorporation.  As  soon  as  the  last  pay- 
ment is  made  the  president  and  a  majority  of  the  directors  must  make  a 
sworn  statement  setting  forth  this  fact,  and  the  same  is  then  recorded  in  the 
office  of  the  clerk  of  the  county  where  the  principal  place  of  business  is  located 
(sees.  5211,  5213). 

10.  Organization  Meeting.  —  Organization  meeting  must  be  held  within 
the  State  (sec.  3491).  The  incorporators  should  sign  a  written  agreement 
fixing  the  time  and  place  for  holding  the  organization  meeting.  After  a 
temporary  .secretary  and  chairman  have  been  chosen,  the  corporation  shoidd 
proceed  to  the  adoption  of  by-laws.  Stockholders  may  vote  by  proxy. 
Immediately  after  the  adjournment  of  the  incorporators'  meeting  the  board  of 
directors  named  in  the  articles  of  incorporation  should  meet  and  organize  by 
the  election  of  the  officers  prescribed  in  the  by-laws.  The  statutory  officers 
are  a  president,  secretary,  and  treasurer.  The  secretary  and  treasurer  are  I'e- 
quired  to  give  bonds  vvith  such  sureties  as  shall  be  required  by  the  by-laws, 
and  must  be  sworn  to  the  faithful  discharge  of  the  duties  which  may  be 
assigned  to  either  of  them.  The  same  person  may  be  elected  to  the  office  of 
secretary  and  treasurer.  "l"he  lavv  provides  that  when  the  steps  necessary  to 
organization  have  been  completed  a  statement  thereof  must  be  filed  in  the 

2GG 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

oflSce  of  the  clerk  of  the  circuit  court  of  the  proper  county ;  that  said  court  at 
its  next  term  thereafter  shall  on  proof  of  such  organization  cause  to  be  entered 
an  order  declaring  the  existence  of  such  corporation.  The  law  provides  that 
such  order  ihall  be  conclusive  as  to  the  fact  of  such  existence  of  the  date  which 
said  court  may  fix  in  the  order. 

11.  Meetings  of  Stockholders  and  Directors.  — Stockholders'  meetings 
must  be  held  within  the  State.  It  seems  to  be  contemplated  by  the  statute 
that  directors'  meetings  should  be  held  at  the  principal  ollice  within  the  State 
(sees.  ^511,  3.51.5,  5252). 

12.  Directors'  Qualifications  and  Liabilities.  a.  Qualifications.  — 
There  must  be  not  less  than  three  nor  more  than  thirteen  directors;  cannot 
exceed  eleven  in  case  of  manufacturing,  mining,  mechanical,  and  chemical 
companies.  In  the  last-named  class  of  companies  directors  must  be  stock- 
holders and  residents  of  the  United  States.  In  other  corporations  there  are 
no  such  requirements  (sees.  3516,  52U5,  5206;  Laws  of  1903,  chap.  37). 

b.  Liabilities.  —  If  any  corporation  reducing  its  capital  stock  shall  fail  to 
file  a  certified  copy  of  the  vote  of  the  stockholders  thereon  within  thirty  days 
thereafter  in  the  office  of  the  clerk  of  the  circuit  court  in  which  the  corpora- 
tion's original  certificate  was  filed,  and  also  a  duplicate  of  the  same  in  the 
office  of  the  Secretary  of  State,  the  directors  shall  be  jointly  and  severally 
liable  for  debts  contracted  after  tlie  said  thirty  days  or  before  the  record 
of  such  vote.  Directors  are  also  jointly  and  severally  liable  for  all  damages 
resulting  in  case  any  certificate,  report,  or  public  notice  given  as  required  by 
law  shall  be  false  in  any  material  respect,  or  if  they  shall  fail  to  give  such 
notice  or  make  such  report,  and  any  person  shall  be  misled  or  deceived  thereby. 
The  directors  are  also  jointly  and  .severally  liable  for  all  debts  contracted  and 
for  the  declaration  and  payment  of  a  dividend  knowing  the  company  to  be  in- 
solvent, or  knowing  that  such  dividend  would  render  it  so,  or  if  they  violate 
any  of  the  provisions  of  the  act  which  shall  thereby  render  the  corporation 
insolvent  (sees.  5214,  5217,  5219,  5220,  5230). 

Brown  v.  Clow,  158  lud.  403;  62  N.  E.  1006;  A.  C.  I.  Co.  v.  Ellis,  156  lud.  212 
59  N.  E.  679. 

13.  Stockholders'  Liabilities. — Stockholders  and  members  of  manu- 
facturing and  mining  companies  are  oidy  liable  for  the  amount  of  stock 
subscribed  by  them  re.spectively,  with  the  exception  that  stockholders  are 
individually  liable  for  all  debts  due  or  owing  laborers,  apprentices,  and 
employees  for  services  rendered  the  corporation.  Stockholders  in  other  cor- 
porations are  liable  to  the  amount  of  stock  held  by  tiiem  at  the  time  the 
debts  were  contracted.  This  lialiility  may,  however,  be  increased  by  vote 
of  a  majority  of  the  stockholders  authorizing  tiie  directors  to  increase  tiieir 
liability  to  any  amount  not  exceeding  three  times  the  amount  of  stock  held 
by  each  8tockho]<ler  (sees.  3510,  5221,  5255).  They  are  also  liable  for  illegal 
withdrawal  of  capital  (sec.  3197;   see  generally.  Cons.,  Art.   XI.  sec.  213). 

HrinifT  V.  Brown,  i;i9  Ind.  600;  .38  N.  E.  .318;  Bent  v.  Underdown,  156  Ind.  516; 
CO  N.  K.  307;  (iniuey  v.  Gilaon,  149  lud.  58;  48  N.  E.  633 ;  Carnahau  v.  Canii)bcll,  158 
Ind. 226  ;  03  N.  E.  384. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitl<'d  to  have  a  stock 
certificate  issued  to  him  undc^r  the  seal  of  the  corporation  signed  l)v  the  treas- 
urer. Slock  in  manufacturing  companies  cannot  be  transferred  until  it  is 
paid  uji  (sec.  3493). 

207 


INCORrORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

15.  Preferred  Stock.  —  The  statute  oxpre.ssly  authorizes  business  corpo- 
rations to  is.-iuo  preferred  stock  by  providing  therefor  in  tlie  articles  of  incor- 
poration. They  may  also  do  so  after  incorporation  by  a  three-fourths  vote  of 
the  .stockholders  given  at  a  rei^ular  or  special  meeting.  By  a  vote  of  a  majority 
of  the  common  stock  they  may  authoiize  and  empower  the  board  of  directors 
to  dispose  of  and  i.ssue  such  preferred  stock  upon  such  terms  and  conditions 
as  the  board  of  directors  may  deem  best,  and  in  such  case  the  validity  and  is- 
suance and  the  disposition  made  of  such  preferred  stock  by  the  directors  shall 
be  binding  and  conclusive  upon  the  company.  Within  thirty  days  after  the 
time  such  preferred  stock  has  been  authorized  there  shall  be  filed  with  the 
Secretary  of  State  a  certificate  in  writing  signed  by  the  president  and  attested 
by  the  Secretary  duly  acknowledged  certifying  that  the  issuance  of  preferred 
stock  has  been  authorized,  the  amount  of  the  same,  the  number  of  shares 
into  which  it  is  divided,  and  the  amount  of  each  share  (sees.  5225-5231  ; 
Laws  of  1901,  chap.  197,  as  amended  by  Laws  of  190:J,  cliap.  122). 

16.  Payment  of  Capital  Stock.  —  The  statute  does  not  provide  as  to 
how  the  capital  stock  shall  he  paid  in.  In  the  absence  of  statutory  prohibition 
it  may  be  paid  for  in  money  or  money's  worth.     (See  sees.  3509,  3510.) 

17.  Books.  —  Corporations  are  required  to  keep  at  their  office  or  place  of 
business  "within  the  State  a  stock  book  open  to  inspection  during  business 
hours  to  all  stockholders  and  creditors,  who  may  take  extracts  therefrom  if 
they  desire  (sees.  3500,  3501). 

18.  OfBce.  —  Every  corporation  must  have  an  office  within  the  State  (sec. 
3500;  Laws  of  1901,  chap.  127;  Laws  of  1903,  chaps.  73,  128). 

19.  Reports.  —  The  company  shall  annually  within  twenty  days  from 
the  first  day  of  January  make  a  report,  which  it  shall  cause  to  be  published 
in  some  newspaper  printed  in  the  county  where  its  office  is  located,  if  any 
(otherwise  in  the  county  nearest  thereto),  which  shall  state  the  amount  of 
capital,  amount  of  assessments  made  and  actually  paid  in,  and  amount  of 
existing  debts,  which  report  shall  be  signed  by  the  president  and  a  majority 
of  the  directors  and  .shall  be  verified  by  the  oaths  of  the  president  and  such 
directors  and  secretary  (R.  S.,  1901,  sees.  5215,  5217). 

20.  Anti-trust  Statute.  —  There  is  a  statutory  prohibition  directed 
against  trusts  and  combinations  tending  to  le.ssen  free  competition  in  the 
importation,  sale,  or  manufacture  of  various  articles  (Laws  of  1899,  chap. 
148). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Allowing  a  judg- 
ment to  stand  against  the  corporation  for  a  period  of  one  year  without  satis- 
fying the  same  is  a  gi-ound  for  forfeiture  (sec.  3506). 

Western  Co.  v.  Central  Co.,  116  Ind.  229;  18  N.  E.  14;  Holraan  v.  Estate,  105 
lud.  569 ;  5  N.  E.  702. 

22.  Extension  of  Corporate  Existence. —  Corporations  may  extend  their 
corporate  existence  by  a  vote  of  tlie  stockholders  at  any  annual  meeting  for  a 
term  not  to  exceeil  fifty  years  from  its  first  organization  (sec.  5209). 

23.  Annual  License  Tax.  —  There  is  no  annual  licen.se  tax. 

21.  Amendments.  —  To  change  the  name  of  the  corporation  application 
to  the  courts  is  necessary  (sec.  1020).  The  power  of  amendment  in  some 
other  respects  is  given  to  the  board  of  directors.  Express  power  is  given  to 
stockholders  of  manufacturing  and  mining  corporations  to  amend  for  all 
purposes  except  change  of  name  (.sees.  3514,  3516,  3517,  5209,  5211,  5222; 
Laws  of  1903,  chap.  37). 

2G8 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

25.  IJissolution.  —  May  voluntarily  dissolve  without  recourse  to  the 
courts  by  compliance  with  the  statute  (Laws  of  1903,  chap.  152). 

State  V.  Trustees,  5  Ind.  77. 

26.  Foreign  Corporations.  —  Foreign  corporations  desiring  to  do  business 
in  Indiana  must  file  with  the  county  clerk  of  the  county  wherein  the  corpora- 
tion i)roposes  to  transact  its  business  the  written  appointment  of  its  agent, 
with  a  consent  that  service  upon  him  shall  be  deemed  sufficient  to  bind  the 
corporation.  Foreign  corporations  are  required  to  pay  a  license  fee  upon  the 
amount  of  capital  invested  in  the  State  at  the  same  rate  required  of  local  cor- 
porations but  never  less  than  825.  They  are  also  required  to  file  a  copy  of 
their  certificate  of  incorporation  and  a  sworn  statement  of  the  proportion  of 
capital  stock  represented  by  property  located  and  business  transacted  in 
Indiana  (Laws  of  1901,  chap.  265;  Laws  of  1903,  chap.  127). 

Hockett  V.  State,  105  Ind.  2.')0;  5  N.  E.  178;  Machine  Co.  v.  Caldwell,  54  Ind. 
270;  Am.  Insurance  Co.  v.  Wellman,  69  Ind.  413  ;  Singer  Manufacturing  Co.  v. 
Brown,  64  Ind.  548;  Brechbill  v.  Randall,  102  Ind.  528;  1  N.  E.  362;  P.  B.  L.  &  S. 
Ass'n  V.  Markley,  27  Ind.  Ap.  128;  60  N.  E.  1013  ;  N.  M.  N.  G.  Co.  v.  Smith,  27  Ind. 
Ap.  472;  61  N.E.  10;  S.  S.  &  L.  Ass'n  v.  Elbert,  153  Ind.  198;  .54  N.  E.  753. 

INDIAN  TERRITORY. 
(See  "  Arkansas.") 

The  Corporation  Laws  of  Indian  Territory.  —  Are,  by  Act  of  Congress 
of  February  18,  1901  (U.  S.  Stat.  1900-1901,  chap.  379,  p.  794)  adopted 
from  the  laws  of  Arkansas  as  published  in  1881  in  ^lansfield's  Digest,  which 
laws,  to  wit,  sec.  504  and  succeeding  sections  down  to  and  including  sec. 
509,  sec.  900,  and  succeeding  sections  down  to  and  including  sec.  1035,  are 
by  said  act  extended  over  and  put  in  force  in  the  Indian  Territory,  so  far 
as  applicable  and  not  in  conflict  with  previotis  congressional  legislation.  Said 
act  of  Congress  also  provides  that  in  reading  said  Arkansas  laws,  read  for 
the  word  "county  "the  words  "judicial  district;"  for  "  county  courts,"  the 
words  "  United  States  courts  ;  "  for  "  State,"  the  words  "  Indian  Territory; " 
for  "Secretary  of  State,"  the  words  "  clerk  of  the  judicial  district; "  for  "  Gen- 
eral Assembly,"  the  words  "Congress  of  the  United  States;"  for  "vest  in 
the  State,"  the  words,  "vest  in  the  United  States."  The  fees  to  be  paid 
to  the  clerk  of  the  judicial  district  or  clerk  of  the  United  States  Court  of 
Appeals  are  by  said  act  made  the  same  as  those  paid  under  the  Arkansas 
law  to  similar  officers. 

IOWA. 

(The  reference?!  are  to  Statutes  of  1897  unless  otherwise  stated.) 

1.  Statute  under  which  Business  Corporations  may  be  incorpo- 
rated. —  The  Business  Corporation  Act  of  Iowa  is  found  in  the  statutes  of 
that  State,  Title  IX.  sees.  1007-1052  inclusive,  as  amen<led  by  the  Session 
Laws  of  1901  and  190.'5.  Spcc-ial  acts  are  provided  for  banks,  building  asso- 
ciations, fidc-lity  companies,  insurance,  railroad,  telegraph,  telephone,  water  and 
wat-r-power  coinpaiiii's. 

2.  Incorporators.  —  Any  numb'-r  of  persons  may  be  incorpr)rators.  The 
law  expre.s.sly  provides  that  a  singU;  person  may  incorporati-  under  the  Ceneral 
Corporation  Act.     There  are  no  residential  requirements  (sees.  10O7,  1008). 

2G9 


INCOUrORATION    AND   ORGANIZATION   OF    CORPORATION. 

3.  Articles  of  Incorporation.  — The  act  requires  that  before  comiTienc- 
in<j  business  the  incorporators  iiiiist  adopt  articles  of  incorporation,  but  it  does 
not  point  out  specitically  tiie  contents  of  the  same.  The  act  does,  liowever, 
prescribe  the  contents  of  the  notice  of  incoriH)ration  which  is  required  to  be 
published.     Tlie  notice  here  referred  to  must  contain: 

(I.    Name.  — Simihirity  of  names  is  not  forbidden. 

b.   Domiciliary  Office.  — Tiie  principal  place  of  business  must  be  stated. 

e.  Purposes.  —  Tlie  general  nature  of  the  business  to  be  transacted  must 
be  set  forth.  There  is  no  express  authority  for  the  issuance  of  a  charter 
authorizing  the  transaction  of  more  than  one  general  line  of  business. 

d.  Capital  Stock.  —  The  amount  of  capital  stock  authorized  and  the  times 
and  conditions  on  which  it  is  to  be  paid.  The  capital  stock  may  be  any 
amount.     The  par  value  of  the  shares  may  be  any  amount. 

e.  Duration.  —  The  time  of  the  commencement  and  the  duration  of  the 
corporation.     This  is  limited  to  twenty  years  (sec.  1618). 

/.  Number  of  Directors.  —  Designation  as  to  what  otlicers  are  to  conduct 
the  corporate  affairs  and  the  times  when  and  manner  in  which  they  are  to  be 
elected.     A  board  of  directors  of  any  number  of  persons  may  be  named. 

g.  Corporate  Indebtedness.  —  The  highest  amount  of  indebtedness  to  which 
the  corporation  shall  be  at  any  time  subject.  This  must  not  in  any  case 
exceed  two-tiiirds  of  the  authorized  capital  stock.  This  section  does  not 
apply  to  railway  or  bond  and  debenture  companies. 

Heuer  v.  Carmichacl,  82  Iowa,  288;  47  N.  W.  1034. 

h.  Exemption  of  Stockholders  from  Individual  Liability  for  Corporate  Debts 
(sees.  1610,  Kil;]). 

4.  Statutory  Povrers.  —  The  Iowa  statutes  merely  enumerate  the  implied 
common  law  powers  of  coi-porations  (sec.  1609).  For  the  purpose  of  repairs, 
rebuilding,  enlarging  or  to  meet  contingencies,  or  for  the  purpose  of  creating 
a  sinking  fund,  the  corporation  may  set  apart  a  sum  which  it  may  loan  and 
take  proper  security  tlierefor  (sec.  1630).  Stock  certificates  cannot  be  issued 
without  having  endorsed  on  the  face  thereof  the  amount  paid  thereon  and 
■whether  sui'h  payment  has  been  in  money  or  property  (sec.  1627 ;  Laws  of 
1904,  chap.  55.) 

Calumet  Paper  Co.  v.  Company,  96  Iowa,  147  ;  64  N.  W.  782. 

5.  Procuring  the  Charter.  —  The  incorporators  must  sign  and  acknowl- 
edge the  articles  of  incorporation.  They  must  be  recorded  in  the  office  of  the 
recorder  of  deeds  of  the  county  where  the  principal  place  of  business  is  located. 
The  articles  bearing  the  endorsement  of  the  recorder  as  to  the  time  when  same 
■were  recorded  and  the  book  and  page  of  such  record  must  be  forwarded  to  the 
Secretary  of  State  and  by  him  recorded.  The  organization  tax  must  be  paid 
at  the  time  of  such  recording.  Within  three  months  from  the  date  of  the 
certificate  of  incorporation  a  notice  must  be  published  once  each  week  for 
four  successive  weeks  in  some  newspaper  as  convenient  as  practicable  to  the 
principal  place  of  business,  which  must  contain  substantially  all  that  is  set 
forth  in  the  articles  of  incorporation  themselves.  Proof  of  such  publication 
by  affidavit  of  the  publisher  of  the  newspaper  in  which  it  is  made  must  be 
filed  with  the  Secretary  of  State.  Both  the  corporation  and  persons  sued  by 
the  corporation  are  forbidden  to  set  up  want  of  legal  organization  on  the  part 
of  the  corporation  as  a  defence  (sees.  IGIO,  1013,  1036 ;  Laws  of  1902,  chap.  67). 

First  Nat.  Bank  v.  Davies,  43  Iowa,  424  ;  Heald  v.  Owen,  79  Iowa,  23  ;  44  N.  W. 
210. 

270 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

6.  Corporate  Indebtedness.  —  Corporate  indebtedness  except  ^vhen 
bonded  and  secured  by  mortgage  cannot  exceed  two-thirds  of  the  capital 
stock  (sec.  1611). 

Warfield  v.  Company,  72  Iowa,  666;  34  N.  W.  467. 

7.  Organization  Tax.  —  Up  to  $10,000,  S25;  and  an  additional  fee  of  $1 
per  thousand  for  all  stuck  authorized  beyond  that  amount  (R.  S.,  sec.  1610 ; 
Laws  ot  1902,  chap.  66). 

S.  Filing  and  Recording  Deeds.  — For  filing  and  recording  articles  in 
office  of  Secretary  of  State,  10  cents  per  folio;  for  furuisliing  certified  copy  of 
articles,  10  cents  per  folio,  for  preparing  same,  $1  for  certifying  the  same; 
recording  fees  in  local  county,  offices,  10  cents  per  folio.  The  legal  rate  for 
adverti.'iing  articles  of  incorporation  averaging  one  thousand  words  in  length  is 
about  S3().  It  varies,  being  based  upon  so  many  lines  of  brevier  type  of  a 
specified  length.  The  newspapers  will  usually  publish  for  fifty  or  even  twenty 
per  cent  of  the  legal  rate. 

9.  Commencing  Business  —  Corporations  may  commence  business  as 
soon  as  the  articles  of  incorporation  are  filed  and  recorded  in  the  office  of  the 
recorder  of  deeds  of  the  county  where  the  principal  place  of  business  is  located, 
and  in  the  office  of  the  Secretary  of  State;  provided  further  that  the  publi- 
cation required  by  law  is  thereafter  made  and  proof  thereof  duly  filed  in 
the  office  of  the  Secretary  of  State.  Business  must  be  commenced  within  two 
years  from  the  time  the  articles  are  filed  in  order  to  avoid  forfeiture  of  its 
franchises  (sees.  1614,  1628). 

Thornton  i;.  Balcom,  85  Iowa,  198;  52  N.  W.  190;  Johnson  v.  Kessler,  76  Iowa, 
411  ;  41  N.  W.  57. 

10.  Organization  Meetings.  —  Ordinarily  organization  meetings  are  held 
within  the  State  (sec.  1612).  The  statute  reads  as  follows:  "If  the  corpora- 
tion transacts  business  in  this  State,  the  articles  shall  fix  its  principal  place  of 
business,  which  must  be  in  this  State,  and  in  charge  of  an  agent  of  the  corpo- 
ration, at  which  place  it  shall  keep  its  stock  and  transfer  books  and  hold  its 
meetings  "  (Id.). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meet- 
ings must  ordinarily  be  held  within  the  State.  Directors'  meetings  may  be 
held  without  the  State  if  the  by-laws  so  provide.  (See  sec.  1012,  cited  at  length 
above.) 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  Any 
number  of  pfr.sf)ns  may  act  as  directors.  'I'liere  are  no  residential  or  other 
requirements. 

h.  Liahilitinx.  —  I)ircctf)rs  are  penally  liable  for  unlawful  diversion  of  cor- 
porate funds,  for  declaring  illegal  diviflenils,  and  for  keeping  false  books  or 
account.  The  payment  by  tlie  directors  of  any  dividend  when  tiie  corporation 
is  known  by  them  to  he  insolvent  or  any  dividend  the  payment  of  which  would 
render  it  insolvent  or  which  diminishes  the  amount  of  its  capital  stock,  ren- 
ders the  directors  knowingly  consenting  thereto  jointly  and  severally  liable 
for  all  debts  of  the  corporation  then  existing.  If  the  indebtedness  of  any 
corporation  shall  exceed  the  amount  of  indebtedness  permittfvl  by  law,  the 
directors  knowingly  consenting  thereto  shall  be  personally  liable  to  the  credi- 
tors of  such  for  such  excess  (si;c8.  16l'1,  1622,  162  i). 

Frost  Mfg  Co.  V.  Foster,  76  Iowa,  5.35  ;  41  N.  \V.  212;  Miller  i:  Bradisli,  09  Iowa 
278;  28  N.  \V.  594. 

271 


INCOUrOUATION    AND    ORGANIZATION    OF    COUrORATION. 

13.  Stockholders'  Liabilities  —  Fiiiline  to  comply  substantially  with 
the  roquiroments  in  relation  to  organization  and  publicity  renders  the  in- 
dividual property  of  stockholders  liable  for  corporate  debts  (sec.  IGIO).  They 
are  also  liable  to  creditors  of  the  corporatiou  for  all  unpaid  instalments  on  stock 
owned  by  them  or  transferred  by  them  for  the  purpose  of  defrauding  creditors 
(sec.  16:n).  The  receipt  of  illegal  dividends  by  stockholders  makes  them 
liable  to  the  amount  of  such  dividend  so  recinved  for  all  liabilities  of  the  cor- 
poration then  existing  (sec.  1G21).  Intentional  fraud  and  failure  to  comply 
substantially  with  the  articles  of  incorjioration  or  in  deceiving  the  public  or 
individuals  in  relation  to  their  means  or  their  liabilities  shall  be  a  misde- 
meanor and  shall  subject  those  guilty  thereof  to  fine  or  imprisonment  or  both 
at  the  discretion  of  the  court.  Any  person  who  has  sustained  injury  from  such 
fraud  may  also  recover  damages  therefor  against  those  guilty  of  participating 
in  such  fraud  (sec.  1620). 

Warfield  r.  Company,  72  Iowa,  666 ;  34  N.  W.  467  ;  Chisholm  v.  Forny,  65  Iowa 
333  ;  21  N.  W.  6G4. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  ollicers  as  may  be  designated  in  the 
by-laws.     (As  to  contents  thereof,  see  section  1027.) 

15.  Preferred  Stock.  —  The  statute  does  not  expressly  authorize  the 
issuance  of  preferred  stock  by  domestic  corporations. 

IG.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  for  money  or 
property  (sec.  1627).  A  statement  of  the  amount  of  capital  stock  as  sub- 
scribed, the  amount  of  capital  stock  actually  paid  in,  and  the  amount  of  cor- 
porate indebtedness  must  be  posted  in  the  principal  place  of  business  and  be 
subject  to  public  inspection  (sec.  1625). 

Singer  v.  Given,  61  Iowa,  93  ;  15  N.  W.  853. 

17.  Books.  —  Transfer  books  showing  the  name  of  the  person  by  whom 
and  to  whom  stock  is  transferred,  the  number  of  shares  and  the  date  of  the 
transfer,  must  be  kept  within  the  State  at  the  principal  office  of  the  corpora- 
tion (sees.  1612,  1626).     They  are  open  to  public  inspection. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  an  office  within 
the  State  with  an  agent  in  charge  thereof  in  which  must  be  posted  a  copy  of 
the  by-laws,  a  statement  of  the  amount  of  capital  stock  subscribed,  the 
amount  of  capital  stock  actually  paid  in,  and  the  amount  of  indebtedness,  all 
for  public  inspection  (sees.   1612,  1624,  1626). 

19.  Reports.  —  No  reports  are  required  to  be  published.  The  corporation 
must  annually  in  January  file  with  the  Secretary  of  State  a  list  of  its  officers 
and  directors  and  any  change  in  the  location  of  its  place  of  business  made  by 
a  vote  of  the  stockholders  (sec.   1612). 

20.  Anti-Trust  Statute.  —  Iowa  has  an  elaborate  anti-trust  statute  pro- 
hibiting certain  pools,  trusts,  and  conspiracies  (Code,  sec.  50G0). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Intentional  fraud 
in  failing  to  comply  substantially  with  the  articles  of  incorporation,  or  deceiv- 
ing the  public  in  relation  to  the  corporation's  means  and  liabilities,  or  a  di- 
version of  funds  which  results  in  the  insolvency  of  the  corporation,  works  a 
forfeiture  of  the  corporate  privileges  to  be  enforced  as  directed  by  law.  Fail- 
ure to  use  the  charter  for  two  successive  years  is  a  ground  for  forfeiture  of  the 
charter.  Charter  may  also  be  forfeited  for  violation  of  the  anti-trust  act 
(sees.  1622,  1628;  see  also  sees.  4313-4335,  50G5). 

272 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

22.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended  for  an  additional  period  of  twenty  years  if  desired  (sec.  1618;  Laws 
of  1900,  chap.  5(5;  Laws  of  1902,  chap.  60;  Laws  of  1904,  chap.  2). 

23.  Annual  License  Tcix.  —  There  is  no  annual  license  tax. 

24.  Amendments.  —  Articles  may  be  amended  in  any  respect  by  comply- 
ing with  the  statute  in  such  case  made  and  provided  (sec.  1615). 

25.  Dissolution.  —  May  be  dissolved  prior  to  the  period  fixed  in  the 
articles  of  incorporation  by  unanimous  consent  of  stockholders,  or  in  accord- 
ance with  the  provisions  of  its  articles,  and  notice  thereof  must  be  given  in  the 
same  manner  and  for  the  same  time  as  is  required  for  its  organization. 
Courts  of  equity  have  power  to  dissolve  or  close  up  the  business  (R.  S.,  sees. 
1017,  10-40). 

26.  Foreign  Corporations.  —  Every  foreign  corporation  shall  file  with 
the  Secretary  of  State  a  certified  copy  of  its  articles  of  incorporation,  accom- 
panied by  a  resolution  of  the  board  of  directors  or  stockholders  authorizing 
the  filing  thereof,  and  also  apjx)intiug  an  agent  upon  whom  service  of  process 
may  be  had  within  the  State,  and  shall  pay  the  same  fee  required  for  the 
organization  of  corporations  with  a  similar  capital  within  the  State  (R.  S.,  sec. 
1637  ;  Laws  of  1904,  chap.  54). 

Ware  Cattle  Co.  i-.  Anderson,  107  Iowa,  231  ;  77  N.  W.  1026  ;  Scottish  Union,  etc. 
Co.  V.  Herriott,  109  Iowa,  606;  80  X.  W.  665;  State  v.  Company,  91  Iowa,  517;  60 
N.  W.  121 

KANSAS. 

(The  references  cited  below  are  to  the  Revised  Statutes  of  Kansas,  1897,  chap.  66,  unless 
otherwise  stated.) 

1.  Statute  under  ■which  Business  Corporations   may   Incorporate. 

—  The  Business  Corporation  Act  of  Kansas  is  found  in  the  Revised  Statutes 
of  that  State,  1S97,  chap.  66,  and  the  Session  Laws  of  1899,  1901,  and  1903, 
Special  acts  are  provided  for  banking  and  insurance  companies  (sec.  4). 

2.  Incorporators.  —  There  nmst  at  least  be  five  incorporators,  three  of 
whom  must  be  citizens  of  the  State  (sec.  4). 

3.  Content  of  Application  for  Charter.  —  An  application  must  be  filed 
by  the  incorporators  with  the  charter  board,  setting  forth  : 

a.  Name.  —  There  can  be  only  one  corporation  of  the  same  name.  This 
must  indicate  the  nature  of  the  business  intended  to  be  carried  on.  It  must 
begin  with  the  word  "  the  "  and  end  with  the  word  "  corporation  "  "  company," 
**  association,"  or  "society"  (sec.  8) 

b.  Domiciliary  Office.  —  'I'he  place  where  its  principal  olRce  or  place  of 
business  is  to  be  located  within  the  State. 

c.  Duralion.  —  Not  to  exceed  twenty  years. 

(I.  Pur/ioses.  —  Full  nature  and  character  of  the  bu.sine8s  in  which  it  pro- 
poses to  engage.  'J'he  "  statutes  of  this  State,"  ob.serves  the  Secretary  of 
Stat*?,  "  provide  that  the  name  of  the  corporation  shall  indicate  the  character 
of  the  business  in  which  it  pmpo.ses  to  engage,  and  it  is  the  practice  of  the 
charter  board  to  limit  the  operation  of  the  corporation  to  a  single  line  of 
business,  except  as  its  engagements  in  other  business  may  be  incidental  to  or 
necessary  to  the  successful  oi)eration  of  such  business.  A  grouping  of  this 
character  is  authoriz.-d  by  sec.   12.j0  of  the  General  Statutes  of  1901." 

rarkiusou  Sugar  Co.  v.  lia.uk,  60  Kan.  474  ;  57  P.ic.  126. 

e.   Incorporators.  —  Names  and  addresses  of  the  incorporators. 
>8  273 


INCOKrOPwVTlON    AND    ORGANIZATION    OF   CORPORATIONS. 

f.  Capital  Stock.  —  This  may  be  any  amount.  Tlie  par  value  of  shares 
may  be  any  amount  (sec.  3  b). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers  the  art  confers  the  follow ing  additional  powers  :  'Jo  authorize 
voting  by  proxy,  to  permit  cumulative  voting,  to  forfeit  stock  for  non-payment 
of  assessment,  to  issue  preferred  stock  (sees.  3,  13,  21,  27,  lUl) ;  to  issue  bonds 
(sec.  18). 

5.  Procuring  the  Charter.  —  The  petition  for  a  charter  must  be  pre- 
sented to  the  cliarter  board,  composed  of  the  Attorney-Cieneral,  the  Secretary 
of  State,  and  the  State  Bank  Commissioner.  The  application  must  be  accom- 
panied by  the  payment  of  $2."),  known  as  the  "  application  fee  "  The  board  is  re- 
quired to  make  an  investigation  of  each  a[)plication,  and  if  satisfied  therewith 
it  shall  be  granted,  and  the  secretary  of  the  board  issues  his  certificate  set- 
ting forth  the  fact  that  the  persons  named  in  the  application  have  been 
authorized  by  the  charter  board  to  form  a  private  corporation.  This  author- 
ization is  in  fact  merely  a  legal  authority  to  organize  the  corporation.  There- 
upon the  charter  must  be  prepared,  containing  :  (1)  Name  of  the  corporation. 
(2)  Purposes  thereof.  (3)  Location  of  principal  place  of  business  within  the 
State.  (4)  Duration  of  corporate  existence.  (5)  Number  of  directors,  names 
and  residence  of  those  appointed  for  the  first  year,  ((i)  Amount  of  capital 
stock,  and  the  number  of  shares  into  which  it  is  to  be  divided.  (7)  Names 
and  residences  of  the  stockholders  and  the  number  of  shares  held  by  each. 
'J'his  charter  must  be  subscribed  and  acknowledged  by  at  least  five  incor- 
porators. Before  the  charter  issues  it  must  be  filed  with  the  Secretary  of 
State  and  the  organization  tax  provided  by  law  must  be  paid  to  the  State 
Treasurer.  Upon  the  payment  of  the  State  fees  the  Secretary  of  State  issues 
a  certified  copy  of  the  charter  to  the  incorporators.  This  copy  is  by  statute 
made  evidence  of  the  creation  of  the  corporation  (sees.  5,  10,  11,  12). 

6.  Corporate  Indebtedness.  —  Must  not  exceed  amount  of  authorized 
capital  stock  (sec.  18). 

7.  Organization  Tax.  —  The  application  must  be  accompanied  by  a  fee  of 
$2.5.  Before  the  charter  is  filed  applicant  must  pay  to  the  State  Treasurer  a 
charter  fee  of  one-tenth  of  one  per  cent  of  its  authorized  capital  on  the  first 
8100,000  of  its  capital,  or  any  part  thereof  ;  upon  the  next  $400,000  or  part 
thereof,  one-twentieth  of  one  per  cent  ;  and  for  each  million  dollars  or  major 
part  thereof  above  the  sum  of  |.jOO,000,  $200  (sees.  3  e,  3  f ,  as  amended  by 
Laws  of  1901,  chap.  12.'j). 

8.  Filing  and  Recording  Pees.  —  Fee  to  the  charter  board  is  ^25 ;  to  the 
Secretary  of  State  for  filing  and  recording  charter,  !ii2.50  not  exceeding  ten 
folios,  and  an  additional  fee  of  25  cents  for  each  folio  in  excess  of  ten.  The  ])ay- 
ment  of  this  fee  entitles  the  corporation  to  a  certified  copy  of  the  charter  (sec.  3  f). 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  their  petition  has  been  favorably  acted  upon  by  the  charter  board,  the 
application  fee  X)aid,  and  charter  propeily  filed  with  the  Secretary  of  State, 
the  organization  tax  and  filing  fees  paid,  and  an  affidavit  filed  with  the  Secre- 
tary of  State,  made  by  the  president  or  secretary,  setting  forth  that  not  less 
than  twenty  per  cent  of  the  authorized  capital  has  been  paid  in  cash.  Cor- 
porations mu.st  commence  business  within  one  year  after  filing  the  charter 
(.sec.  4;  Laws  of  1001,  chap.  125,  sec.  4j. 

10.  Organization  Meeting.  —  Must  be  held  within  the  State,  in  the  ab- 
sence of  any  statute  providing  otherwise. 

274 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

11.  Meetings  of  Stockholders  and  Directors.  —  All  meetings  of  stock- 
holders must  be  held  within  the  State.  Directors'  meetings  may  be  held  with- 
out the  State  if  the  by-laws  so  provide  (sec.  "27  ;  Laws  of  1901,  chap.  126). 

12.  Directors'  Qualifications  and  Liabilities.  a.  Qualifications.  — 
There  must  be  at  least  three  and  not  more  than  twenty-four  directors.  Three 
of  these  must  be  residents  of  the  State.  All  directors  must  be  stockholders. 
Cumulative  voting  for  directors  is  permitted.  The  power  to  adoj^t  by-laws 
may  be  delegated  to  the  directors.  An  oath  of  office  is  required  (sees.  13,  26, 
72, '42;  Laws  of  1901,  chap.  126). 

b.  Liabilities.  —  Directors  are  jointly  and  severally  liable  for  knowingly 
declaring  or  paying  any  dividends  when  the  corporation  is  insolvent,  or  any 
dividend  the  payment  of  which  would  render  it  insolvent.  They  may  avoid 
this  liability  by  filing  their  objections  in  writing  with  the  secretary  of  the 
corporation  (sec   32). 

13.  Stockholders'  Liabilities.  —  The  Legislature  of  1903  passed  an  act 
repealing  statutes  imposing  a  double  liability  on  stockholders.  The  constitu- 
tionality of  this  act  is  questioned  in  some  quarters,  but  the  Supreme  Court 
has  not  yet  passed  upon  it.  In  any  event  stockholders  are  liable  for  unpaid 
stock  subscriptions  (Law^s  of  1903,  chap.  152,  sec.  51). 

Musgruve  v.  As.sociatiou,  5  Kau.  Ap.  393  ;  49  Pac.  338;  Munson  v.  "Warren,  63 
Kan.  162;  65  Pac.  222. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  may  be  designated  in  the 
by-laws. 

15.  Preferred  Stock.  — Preferred  stock  may  be  issued  by  insertion  of  a 
provision  therefor  in  the  charter,  or  by  the  unanimous  consent  of  all  the 
common  stockholders  of  the  corporation  after  incorporation  (sec.  104). 

16.  Payment  of  Capital  Stock.  —  The  capital  stock  is  payable  in  such 
amounts  and  in  such  manner  as  may  be  required  by  the  by-laws  under  direc- 
tion of  the  board  of  directors  (sees.  19,  20).  It  is  payable  in  money  or 
money's  worth. 

17.  Books.  —  A  record  must  be  kept  of  all  stock  subscribed  and  trans- 
ferred and  all  business  tran.sactions.  Such  records  must  be  open  at  all  times 
to  the  inspection  of  stockholders  (.sees.  31,  42,  52). 

14.  Office.  —  Every  corporation  must  maintain  an  office  within  the  State. 
The  law  provides  that  the  office  of  the  treasurer  must  be  within  the  State 
(sees.  42,  44). 

19.  Reports.  Every  corporation,  excepting  banking,  insurance,  and  rail- 
roail  corporations,  shall  file  annually,  on  or  before  August  Ist,  a  statement  of 
condition  of  such  corporation  on  the  30tli  of  June  preceding.  Such  statement 
shall  set  forth  authorized  cai)ital  stock,  paid  up  capital  stock,  par  value  and 
market  value  of  shares  of  Kto<:k,  statement  of  as.sets  and  liabilities,  list  of 
stockholders  with  the  jiost-office  addresses  of  each  and  numl>er  of  shares  held 
ami  paid  for  by  each,  names  and  post-office  addres.ses  of  officers,  trustees,  or 
directors  and  manager  elected  for  ensuing  year,  and  a  certificate  of  the  time 
and  manner  in  which  election  was  held.  Fee  for  filing  rejiort  is  81  (Laws  of 
1901,  chap.  125,  S'-c.  3). 

20.  Anti-Trust  Statute.  —  Kansa.s  ha,s  an  elaborate  antitrust  statute 
providing  for  the  prohibition  of  certain  kin<ls  of  pools,  trusts,  or  coiiajjiracies 
(chap    145,  sees.  1-21  •■). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  board 

275 


INCORrORATION    AND    ORGANIZATION    OP   CORPORATIONS, 

is  authorized  by  law  to  declare  a  charter  void  for  failure  to  furnish  such  in- 
formation in  the  way  of  annual  reports  or  otherwise  as  may  be  required  by 
the  Secretary  of  State.  The  charter  may  be  forfeited  for  illegal  use  or  abuse 
of  corporate  powers  or  for  entering  illegal  trusts  and  combinations  or  for 
failure  to  commence  business  within  one  year  from  filing  of  charter,  or  for 
failure  to  maintain  its  domiciliary  office  and  resident  directors  (sees.  43,  45, 
98;  chap.  145,  sec.  16;  Laws  of  19U1,  chap.  125,  sec.  124). 

State  1-.  Company,  59  Kau.  151  ;  52  Pac.  422;  First  Nat.  Bank  v.  King,  60  Kan. 
733 ;  57  Pac.  952. 

22.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended  for  successive  periods  of  twenty  years,  by  filing  with  the  Secretary 
of  State  at  any  time  certificate  of  its  intention  to  so  extend  its  time  of  exist- 
ence, signed  and  duly  acknowledged  by  the  president  and  secretary  after  the 
same  has  been  authorized  by  its  board  of  directors  and  approved  either  by 
two-thirds  of  its  stockholders  in  writing  or  by  a  two-thirds  vote  of  its  stock- 
holders present  at  any  meeting  duly  called  for  that  purpose  (sec.  38). 

23.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

24.  Amendments.  —  May  change  nature  of  its  business,  change  its  name, 
increase  the  shares  of  its  capital  stock,  change  place  of  its  principal  oflice  in 
this  State,  and  make  such  other  alterations  or  amendments  as  desired,  when 
authorized  by  a  two-thirds  vote  of  stockholders  at  a  meeting  held  in  conformity 
to  by-laws,  and  as  so  amended  each  charter  shall  be  subscribed  by  directors, 
and  acknowledged  by  not  less  than  three  thereof  who  shall  be  citizens  of  the 
State.  When  name  is  changed,  notice  of  such  change  shall  be  immediately 
thereafter  published  by  president,  or  other  chief  officer,  for  six  weeks,  in 
some  newspaper  printed  and  published  in  the  county  where  the  principal 
office  is  located;  if  there  is  no  such  newspaper,  in  some  paper  of  general  circu- 
lation. For  decrease  of  capital  stock  a  meeting  of  stockholders  must  be  called 
for  that  purpose,  and  upon  two-thirds  vote  of  outstanding  stock  a  certificate 
of  such  decrease  under  the  corporate  seal  signed  by  the  president  and  secretary 
of  the  corporation  should  be  filed  in  the  office  of  the  Secretary  of  State  (sees. 
9, 14,  IG;  Laws  of  1901,  chap.  125,  sec.  7  ;  Laws  of  1903,  chap.  151). 

25.  Dissolution.  —  May  be  dissolved  on  application  to  the  courts  (sees. 
45-50). 

Brigham  v.  Nathan,  62  Kan.  243;  62  Pac.  319;  Jones  v.  Edson,  10  Kan.  A  p.  110; 
62  Pac.  249. 

26.  Foreign  Corporations.  —  Foreign  corporations  must  apply  to  the 
charter  board  for  permission  to  engage  in  business  in  the  State,  setting  forth  : 
certified  copy  of  its  charter;  place  where  its  principal  office  is  located;  nature 
and  character  of  the  business  in  which  it  proposes  to  engage;  names  and 
addresses  of  the  trustees,  officers,  or  directors  and  stockholders  of  the  corpora- 
tion ;  a  statement  of  the  assets  and  liabilities.  This  statement  must  be  sub- 
scribed and  sworn  to  by  the  president,  secretary,  and  managing  officer,  and  be 
accompanied  by  the  charter  fee  of  $25,  and  also  its  written  assent  that  actions 
may  be  commenced  against  the  corporation  by  service  of  process  upon  the 
Secretary  of  State.  This  stipulation  must  be  executed  by  the  president  and 
secretary  of  the  company,  authenticated  by  its  seal  and  accompanied  by  a 
certified  copy  of  the  resolution  of  the  board  of  directors  authorizing  same. 
Such  corporations  shall  also  pay  the  State  fees  on  their  capital  stock  as  re- 
quired of  domestic  corporations.  During  the  month  of  February  of  each 
year  foreign  corporations  must  file  with  the  Secretary  of  State  a  statement  of 

276 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

the  condition  of  such  corporation  at  close  of  business  on  the  day  of  last  annual 
statement  made  by  such  corporation  for  its  own  use,  and  within  one  hundred  and 
twenty-five  days  preceding  filing  of  such  statement  or  —  if  no  such  previous 
statement  has  been  made  —  the  statement  so  filed  shall  show  condition  of  the 
company  at  close  of  business  on  the  31st  day  of  December  preceding.  This 
statement  must  show :  name ;  location  of  principal  place  of  business  within 
the  State  and  without  the  State ;  names  and  addresses  of  officers  and  directors ; 
amount  of  authorized  capital  stock  and  par  value  of  shares  :  amount  of  capital 
stock  subscribed  and  amount  and  general  nature  of  its  sources  and  liabilities. 
This  report  must  be  signed  and  sworn  to  by  the  president  or  general  manager 
and  by  the  secretary  (Laws  of  1901,  chap.  195,  sees.  2,  3,  4;  see  generally  Laws 
of  1903,  chap.  153 ;"  Laws  of  1903,  chap.  150). 

State  V.  Topeka  Water  Co.,  61  Kan.  547  ;  60  Pac.  337  ;  Alliance  Trust  Co.  v.  Wilson, 
9  Kan.  Ap.  891  ;  59  Pac.  177. 


KENTUCKY. 

(The  references  cited  below  are  to  the  Revised  Statutes  of  1894,  unless  otherwise  stated.) 

1.  Statute  under  V7hich  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Kentucky  is  found  in  the  Kevi.-^ed 
Statutes,  1894,  sees.  538-570,  and  acts  amendatory  thereof.  Under  it  parties 
may  incorporate  for  transaction  of  any  lawful  business.  There  are  special 
provisions  applicable  to  collection  agencies,  banks,  bankers,  bridge  companies, 
building  and  loan  as-sociations,  insurance,  railroad,  and  real  estate  corporations 
(sec.  538). 

2.  Incorporators.  —  Any  number  of  persons  not  less  than  three  may  be 
incorporators.     Tfiere  are  no  residential  requirements  (sec.  538). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  articles  must 
specify  : 

a.  Xnme.  —  Similarity  of  names  as  to  existing  domestic  corporations  is 
forbidden.  The  word  "  incorporated"  must  always  follow  the  name  adopted 
(.sec.  57G). 

h.  Domiciliary  Office.  —  Location  within  the  State  of  the  principal  office  or 
place  of  business  of  the  corporation. 

c.  Purposes.  —  The  nature  of  the  business,  the  objects  or  purposes  pro- 
posed to  be  carried  on,  promoted,  or  transacted.  Tins  permits  of  incorpora- 
tion for  more  than  one  puri)ose. 

'/.  C(i/>itfd  Stock.  —  The  amount  of  capital  stock  and  the  number  of  sliares 
into  which  the  same  is  divided.  The  ca[)ital  stock  may  be  any  amount.  The 
par  value  of  shares  may  be  any  amount. 

e.  Subscribers  to  Cajiitnl  Stock.  —  The  names  and  places  of  residence  of  the 
stockholders  and  the  number  of  sliares  subscribed  by  each. 

/.  Duration.  — The  time  when  the  corporate  existence  commences  and  the 
duration  of  the  same.     This  may  be  uidimited. 

rj.  Directors  and  Officers.  —  A  designation  of  theollicers  or  persons  who  are 
to  conduct  the  affairs  of  the  corporation  and  the  time  and  place  at  which  tlu'y 
are  to  be  elected.     Tlu-re  must  be  at  h-ast  three  directors. 

h.  Corporate  [ndehtcdness.  —  The  highest  amount  of  indebtedness  or  liabil- 
ity which  the  corporation  may  at  any  time  incur.     This  may  be  uiilimili'd. 

i.    Stockholders^  Liabilitij.  —  Statement  as  to  whether  the  privat<!  property 

277 


INCORrORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

of  thi^  stockhoUlers  shall  be  subject  to  tho  payment  of  corporate  debts,  and  if 
so,  to  what  extent  (sec.  5oll). 

4.  Statutory  Powers.  —  In  addition  to  the  enumeration  of  the  common 
law  powers  of  corporations,  the  statute  gives  the  corporation  power  to  remove 
ollicers,  to  define  their  duties,  and  to  require  from  any  of  them  a  bond  for  the 
faithful  performance  of  their  duties,  and  gives  boards  of  directors  power  to 
adopt  by-laws.  The  statute  forbids  the  pin-chase  by  the  corporation  of  its 
own  capital  stock  except  to  prevent  loss  upon  debts  previously  contracted,  and 
the  stock  so  purchased  shall  in  no  case  be  held  for  more  than  one  year.  It 
also  permits  corporations  to  consolidate  and  to  issue  preferred  stock.  Also  a 
lien  on  stock  for  debts  due  the  corporation  from  stockholders  may  be  enforced 
bv  the  corporation.  Corporations  cannot  hold  any  real  estate  except  as  may 
be  necessary  for  carrying  on  its  legitimate  business  for  a  longer  period  than 
five  years.  Power  to  vote  by  proxy,  to  forfeit  stock  for  non-payment  of  assess- 
ment, to  permit  cumulative  voting,  and  to  classify  directors  is  given  (sees.  542, 
543,  551,  555,  5G4,  567;  Laws  of  1902,  chap.  58). 

German  Nat.  Bank  v.  K.  T.  Co.,  19  Ky.  Law  Rep.  361  ;  40  S.  W.  458;  C.  G.  L. 
Co.  V.  City  of  Covington,  22  Ky.  Law  Rep.  796 ;  58  S.  W.  805. 

5.  Corporate  Indebtedness.  —  There  is  no  limit  to  the  amount  of  in- 
debtedness which  a  corporation  may  incur.  No  bonds  can  be  issued  except 
for  equivalent  in  money  paid,  labor  done,  or  property  actually  received  and 
applied  to  the  purposes  for  which  the  corporation  was  created  (sec.  568). 

6.  Procuring  the  Charter.  —  The  articles  of  incorporation  must  be  signed 
and  acknowledged  by  each  of  the  incorporators.  They  must  then  be  recorded 
in  the  county  clerk's  office  of  the  county  in  which  the  principal  place  of 
business  is  to  be  located,  and  a  copy  thereof  filed  and  recorded  in  the  office  of 
the  Secretary  of  State  (sees.  540,  542,  570).  Collateral  inquiry  into  the 
legality  of  corporate  existence  is  forbidden  (sec,  566). 

7.  Organization  Tax.  —  An  organization  tax  amounting  to  one-tenth  of 
one  per  cent  on  the  amount  of  its  authorized  capital  stock  is  exacted  (Laws 
of  1902,  chap.  128,  Art.  XI.  sub.  1,  sec.  1). 

8.  Filing  and  Recording  Fees.  —  Recording  fees  in  the  office  of  the  Secre- 
tary of  State,  20  cents  per  folio.  Recording  fees  in  local  county  office  for 
articles  averaging  one  thousand  words  in  length,  |3,  which  includes  cost  of 
certified  copy  for  filing  in  the  office  of  the  Secretary  of  State. 

9.  Commencing  Business.  —  Corporations  in  order  to  transact  any  busi- 
ness with  persons  other  tlian  the  stockholders  must  procure  subscriptions  in 
good  faith  for  at  least  fifty  per  cent  of  the  authorized  capital  stock.  When 
this  has  been  done,  the  corporation  may  commence  the  transaction  of  its 
business.  Such  business  must  be  commenced  within  two  years  after  organi- 
zation (sees.  543,  565).  Before  commencing  business  the  corporation  must 
file  in  the  office  of  the  Secretary  of  State  a  statement  signed  by  its  president 
or  secretary,  giving  the  location  of  its  office  or  offices  within  the  State  and  the 
name  or  names  of  its  agent  upon  whom  process  may  be  served  (sec    571). 

10.  Organization  Meeting.  —  Organization  meeting  must  be  held  within 
the  State  in  the  absence  of  any  statute  providing  otherwise. 

11.  Meetings  of  Stockholders  and  Directors.  —  All  meetings  of  stock- 
holders must  be  held  within  the  State.  Directors'  meetings  may  be  held  with- 
out the  State  if  the  by-laws  so  provide  (sec.  551). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  — 
There  must  be  at  least  three  directors,  each  of  whom  must  own  in  his  own 

278 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

right  not  less  than  three  shares  of  stock.  There  are  no  residential  require- 
ments. Directors  may  be  classified  if  desired.  They  must  also  adopt  by-laws 
(sees.  54*2,  551). 

b.  Liabilities.  —  Directors  are  jointly  and  severally  liable  for  the  declara. 
tion  and  payment  of  dividends  when  the  corporation  is  insolvent  or  the  dec- 
laration or  payment  of  which  renders  it  insolvent  or  which  diminishes  the 
amount  of  its  capital  stock.  They  are  also  jointly  and  severally  liable  for 
knowingly  causing  to  be  published  or  given  out  any  false  statement  or  report 
of  the  condition  of  the  corporate  business,  or  for  failing  or  refusing  to  comply 
with  or  for  violation  of  any  provision  of  the  Business  Corporation  Act  appli- 
cable to  them  (sees.  548-550  inclusive). 

Prewitt  i\  Trimble,  92  Ky.  176;  17  S.  W.  .356 ;  Kruse  i-.  Humpert,  21  Kj.  Law 
Rep.  985  ;  53  S.  W.  657. 

1.3.  Stockholders' Liabilities.  —  Stockholders  inordinary  business  cor- 
porations are  liable  only  for  their  unpaid  stock  subscriptions  (Laws  of 
1902,  chap.  10). 

Cincinuati  Cooperage  Co.  v.  Bate,  16  Ky.  Law  Rep.  626;  26  S.  W.  538;  Senn  v. 
Levy,  23  Ky.  Law  Rep.  662,  1331 ;  63  S.  W.  776. 

14.  Stock  Certificates.  —  Every  shareholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  may  be  designated  in  the 
by-laws. 

If).  Preferred  Stock. — Corporations  may  provide  in  the  articles  of  in- 
corporation for  classes  of  stock  such  as  preferred,  common,  or  deferred  shares. 
Preferred  stock  cannot  be  issued  except  for  cash  or  its  equivalent,  nor  for  less 
than  the  par  value  of  the  shares.  The  rights  of  preferred  stockholders  are 
specifically  set  forth  in  the  statute  (sec.  564 ;  Laws  of  1904,  chap.  105). 

IG.  Payment  of  Capital  Stock.  —  Stock  can  be  issued  only  for  money 
paid,  labor  done,  or  property  actually  received  and  applied  to  the  purposes  for 
which  the  corporation  was  created.  No  labor  nor  property  shall  be  received 
in  payment  of  stock  at  a  greater  value  than  the  market  price  at  the  time  the 
labor  was  done  or  the  property  delivered.  All  fictitious  increases  of  stock 
shall  be  void  (sec.  568). 

17.  Books.  —  A  book  containing  the  name  and  post-office  address,  the 
number  of  shares  held  by  each  stockholder,  and  the  time  when  such  person 
became  a  stockholder  must  be  kept.  Also  a  stock  transfer  book  must  be  kept 
at  the  principal  office  of  the  corporation  within  the  State  (sec.  546).  This 
is  oi)eii  to  the  inspection  of  stockholders  and  creditors. 

18.  Office  and  Agent.  —  Every  corporation  nmst  maintain  an  office 
within  the  State  and  have  an  authorizt-d  agent  therein  upon  whom  process 
may  be  served.  The  designation  of  such  agent  must  be  filed  in  the  office 
of  the  Secretary  of  State  by  certificate  signed  by  the  president  or  secretary 
giving  location  of  the  office  of  the  company  in  the  State,  and  the  name  of 
the  agent  upon  whom  process  may  be  served  (sec.  571). 

Stari<lar<l  Oil  Co.  ?/.  Commonwcaltii,  23  Ky.  Law  Uep.  302;  62  So.  W.  897. 

19.  Reports.  —  Xo  annual  reports  are  required. 

'20.  Anti-Trust  Statute.  —  There  is  an  anti-trust  statute  in  force  directed 
against  illegal  rornbiiiatintis,  pools,  and  tru-^ts  (Cons.,  sec.  198;  K.  S.,  sees. 
3915-3921  inclusive). 

21.    Annual  License  Tblx.  —  There  is  no  animal  license  tax. 

279 


INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

22.  Extension  of  Corporate  Existence.  —  There  is  no  statutory  provision 
therofor. 

2o.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Every  charter  is 
liable  to  bo  forfeitL'd  by  suit  broui;lit  for  tluit  |)uri)Ose,  by  the  State  for 
failing  to  comply  with  any  roquireinout  or  provision  of  its  charter  or  for 
any  abuse  or  misuse  of  its  corporate  powers,  and  shall  have  thereby  be- 
come detrimental  to  the  internal  welfare  of  the  State.  The  charter  is  liable 
to  forfeiture  for  failure  to  commence  business  within  two  years  after  its 
organization,  for  entering  into  illegal  trusts,  combinations,  and  pools,  or 
for  giving  money  to  fix  the  result  of  any  election  (sees.  565,  569). 

S.  E.  Co.  V.  Commou wealth,  21  Ky.  Law  Rep.  1556 ;   55  S.  W.  684. 

24.  Amendments.  —  By  consent  in  writing  of  owners  of  two-thirds  of 
capital  stock,  the  articles  of  incorporation  may  be  amended  for  any  purpose. 
Said  alteration  or  amendment  to  be  signed  and  acknowledged  by  the 
directors  or  a  majority  of  them,  and  filed  and  recorded  as  articles  of  in- 
corporation are  required  to  be  filed  (sees.  559,  574). 

25.  Dissolution.  —  Any  corporation  may,  by  consent  in  writing  of  the 
owners  of  a  majority  of  its  stock,  close  its  business  and  wind  up  its 
affairs  (sec.   561). 

2C.  Foreign  Corporations.  —  The  only  requirements  necessary  to  be 
complied  with  in  order  to  transact  business  within  the  State  on  the  part 
of  foreign  corporations  is  the  designation  of  an  agent  upon  whom  process 
may  be  served,  and  a  declaration  of  the  name  of  such  agent  and  the  domicile 
of  the  corporation,  by  filing  same  with  the  Secretary  of  State  (Act  1890, 
p.  188;   see  also  Cons.,  sec.  202). 

Comraonwealth  v.  Read  Phosphate  Co.,  23  Ky.  Law  Rep.  2284;  67  S.  W.  45; 
Aultman  Taylor  Co.  v.  Mead,  22  Ky.  Law  Rep.  1189;  60  S.  W.  294. 

LOUISIANA. 
(The  references  cited  below  are  to  Wolff's  Revised  Statutes  of  1904  unless  otherwise  stated.) 

1.  Statutes  under  •which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Louisiana  is  found  in  the  Revised  Statutes 
of  that  State,  1904,  sees.  683-741 ;  see  also  Civ.  Code  of  Louisiana,  1870, 
sees.  427-447.  (See  Laws  of  1902,  Acts  53,  154;  Laws  of  1904,  Act  78.) 
Special  acts  are  provided  for  banking,  building  and  loan,  canal,  insurance, 
railway,  safe  deposit,  and  trust,  street  railway,  surety,  telegraph  and  telephone 
companies.  Incorporation  for  stock- jobbing  business  is  expressly  forbidden 
(,sec.  683;  Laws  of  1888,  Act  36). 

2.  Incorporators.  —  The  number  of  incorporators  varies  with  the  nature 
of  the  corporation.  For  many  purposes  six  incorporators  are  required.  There 
are  no  residential  requirements  (sec.  083;  Laws  of  1882,  Act  111;  Laws  of 
1902,  Act  154).  Three  or  more  persons  may  form  themselves  into  a  corpora- 
tion for  the  purpose  of  canying  on  any  mechanical,  mining,  or  manufacturing 
business  (except  distilling  or  manufacture  of  intoxicating  liquors),  or  for  the 
purpose  of  carrying  on  any  lawful  l)usiness  or  purpose  not  otherwise  provided 
for.     There  are  no  residential  requirements  (Laws  of  1904,  Act  78). 

Ross  V.  Crockett,  14  La.  Ann.  811;  Board  of  Trustees,  etc.  v.  Campbell,  48  La. 
Ann.  154.3;  21  So.  184. 

3.  Contents  of  the  Charter  (sec.  685).  —  The  charter  must  contain: 

280 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

a.  Name.  —  A  corporation  organized  under  "  Limited  Liability  Act  "  must 
have  the  word  "limited  "  in  its  name.       Similarity  of  names  is  not  forbidden. 

b.  Domiciliary  Office. — The  location  of  the  principal  office  or  place  of 
business  within  the  State. 

c.  Purposes.  —  Corporations  may  be  organized  for  more  than  one  purpose  if 
none  of  these  are  within  those  classes  for  which  special  acts  are  provided  and  if 
the  corporation  has  a  subscribed  capital  of  ^SjOOO  or  over  (Laws  of  1904,  Act  78). 

d.  Service  of  Process.  —  An  officer  must  be  designated  upon  whom  process 
may  be  served. 

e.  Capital  Stock.  —  Amount  of  capital  stock,  number  of  shares,  par  value 
of  same,  time  when  and  manner  in  which  payment  thereof  shall  be  made. 
The  capital  stock  of  any  corporation  carrying  on  a  mechanical,  mining,  or 
manufacturing  business  (except  the  distilling  and  manufacture  of  intoxi- 
cating liquors)  must  be  not  less  than  65, 000  nor  more  than  $1,000,000. 
Limited  liability  companies  must  have  a  capital  stock  of  not  less  than 
85,000  actually  subscribed.     The  par  value  of  the  shares  may  be  any  amount. 

/.  Election  of  Directors.  —  The  mode  in  which  the  election  of  directors 
shall  be  conducted. 

g.  Dissolution.  —  The  mode  of  liquidation  at  the  termination  of  the 
charter  (sec.  685). 

The  duration  of  charters  is  ninety-nine  years  (sec.  684). 

4.  Statutory  Powers.  —  The  statute  enumerates  the  implied  common  law 
powers  of  corporations,  and  also  confers  the  following  additional  powers  :  Busi- 
ness and  manufacturing  corporations  whose  ol)jects  are  of  the  same  general  na- 
ture may  consolidate.  The  right  to  receive  legacies  and  donations  is  also  given 
(sec.  084  ;  Laws  of  1874,  Act  approved  Dec.  12  ;  see  also  Cons.,  1898,  sec.  26.3). 

5.  Corporate  Indebtedness. — Railway,  plank  road,  turnpike,  canal, 
warehouse,  drainage,  sewage,  land  reclaimer,  levee  building,  waterworks, 
electric  lighting  and  power,  bridges,  mills  and  refineries,  saw-mills,  rice-mills, 
cotton-oil  mills,  erecting  companies,  ship-building  and  dock  corporations  may 
borrow  money  and  issue  bonds  and  mortgage  their  properties  and  franchises 
nnder  such  terms  as  the  directors  may  direct  or  deem  expedient  (Laws  of 
1902,  Act  30;  see  also  Laws  of  1902,  Act  121). 

6.  Procuring  the  Charter.  —  The  articles  must  be  signed  and  acknowl- 
edged before  a  notary.  Charters  for  commercial  and  manufacturing  pur- 
poses must  be  recorded  in  the  office  of  the  recorder  of  mortgages  of  the  parish 
of  their  domicile,  together  with  a  list  of  subscriptions  to  their  stock.  Such 
charters  must  also  be  publi.shed  in  some  daily  newspaper  within  the  parish 
of  the  domicile  five  times  within  thirty  days.  It  is  not  necessary  to  publish 
the  list  of  subscribers.  A  duly  certified  copy  of  the  charter  taken  either  from 
the  record  of  the  notarj'  before  whom  the  act  was  passed  or  from  the  record 
thereof  in  the  office  of  the  reconh.-r  in  whose  office  said  charter  shall  have 
been  recorded,  must  be  fil<'<l  in  the  office  of  the  Secretary  of  State.  To  this 
copy  inu.st  be  affixfd  the  certificate  of  the  recor<ler,  attesting  recordation  of 
the  act  in  liis  office,  etc  ;  aJHO  a  copy  of  one  issue  of  tlie  n''ws|>.'ii)er  wherein 
the  said  charter  shall  have  been  juiMished.  together  with  the  alfidavit  of  pub- 
lication (sees    G77,  080;  Laws  of  1898,  Act  5!»)- 

7.  Organization  TsuE  ^  There  i.s  no  or.;anization  tax,  jiroperly  speaking. 
The  j)reliminary  fee  to  the  Secretary  of  State  is  825.  Notary's  fees  range 
fiom  S25  upward  for  drawing  the  rliarter,  being  regulated  by  the  length  of 
the  charter  and  the  amount  of  capita!  stock. 

281 


INCOUPOKATION    AND    ORGANIZATION    OF    CORPORATIONS. 

8.  Filing  and  Recording  Fees.  —  For  filings  ami  recording  in  office  of 
Secretary  of  State,  SJo.  Notary's  fees  for  ordinary  charter  should  not  exceed 
§25for  diawiug  same;  recording  the  charter  in  county  recorder's  office,  25  cents 
per  folio ;  for  publishing  articles  in  newspaper  the  price  varies  with  the  lo- 
cality, being  much  higher  in  New  Orleans  than  elsewhere  ;  average  charge 
is  S15;  cost  of  certified  copy  of  tlie  articles  averages  about  !$5;  district 
attorney's  fees,  85  (Laws  of  1002,  Act  103). 

9.  Commencing  Business.  —  Corporations  may  begin  business  immedi- 
ately after  the  first  publication  of  the  charter.  No  specific  amount  of  the 
capital  stock  need  be  subscribed  for  or  paid  in  in  order  to  entitle  the  corporation 
to  begin  business. 

Globe  Realty  Co.  v.  Whitney,  106  La.  Ann.  257 ;  30  So.  745. 

10.  Organization  Meeting.  —  In  the  absence  of  any  statute  providing 
otherwise,  the  organization  meeting  must  be  held  within  the  State  (sec.  741). 

11.  Meetings  of  Stockholders  and  Directors.  —  All  meetings,  whether 
of  stockholders,  directors,  or  officers,  must  be  held  at  the  domicile  of  the  cor- 
poration within  the  State.  The  law  provides  that  any  such  meeting  held  else- 
where and  any  business  transacted  thereat  shall  be  unlawful  and  of  no  effect 
(sec.  741). 

12.  Directors'  Qualifications  and  Liabilities,  n.  Qualifications.  —  The 
statute  does  not  provide  the  specific  number  of  directors,  neither  are  there 
any  residential  requirements  (sec.  684). 

b.   Liabilities.  — There  are  no  statutory  liabilities  imposed  upon  directors. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  unpaid  bal- 
ance due  the  company  on  shares  owned  by  them.  The  statute  specifically 
provides  that  no  mere  informality  in  organization  shall  have  the  effect  of 
exposing  a  stockholder  to  any  liability  for  unpaid  balance  due  on  their  stock. 
The  statute  further  provides  that  the  word  "limited"  shall  be  the  last  word 
of  the  name  of  every  corporation.  The  act  further  provides  that  the  omis- 
sion of  the  word  "limited"  in  the  use  of  the  name  of  the  corporation  shall 
render  it  and  every  person  participating  in  such  omission  or  knowingly  ac- 
quiescing therein  liable  for  any  indebtedness,  damage,  or  liability  arising 
therefrom  (sec.  090;  Laws  of  1^88,  Act  36). 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  certifi- 
cate issued  to  him  signed  by  such  officers  as  may  be  designated  in  the  by-laws. 

1.5.  Preferred  Stock.  —  There  is  no  statutory  authorization  for  the  issu- 
ance of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  under  the  con- 
stitution for  labor  done  or  money  or  property  actually  received.  All  fictitious 
issues  of  stock  are  declared  void  (Cons.,  Art.  266). 

17.  Books.  —  The  corporation  is  required  to  keep  a  stock  transfer  book  at 
its  domicile  within  the  State.  This  book  must  be  kept  open  for  public  inspec- 
tion (Cons.,  Art.  273). 

Legendre  v.  Association,  45  La.  Ann.  669;  12  So.  837;  Bourdette  v.  Sieward,  107 
La.  Ann.  258;  31  So.  630. 

18.  OfBce.  —  Every  corporation  is  required  to  keep  a  public  office  or  place 
of  busine.ss  within  the  State  for  the  transaction  of  its  business  (Cons.,  Art.  264, 
273 ;  R.  S.,  sec.  740). 

19.  Reports.  —  The  president,  cashier,  secretary,  or  agent  of  every  stock 
corporation  must,  on  or  before  the  first  day  of  March  in  each  year,  make  and 
deliver  to  the  State  collectors  or  assessors  of  the  parish  in  which  such  coin- 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

pany  is  liable  to  be  taxed  a  written  statement  under  oath  specifying :  first, 
the  real  estate,  if  any,  owned  by  such  company  when  the  same  is  located  in 
this  State;  second,  the  capital  stock  actually  paid  in  and  not  invested  in  real 
estate ;  third,  the  place  of  its  principal  business  or  where  its  principal  opera- 
tions are  carried  on  in  which  it  is  liable  to  be  taxed  (sec.  736;  see  also  Laws 
of  1898,  Act  170). 

20.  Anti-Trust  Statute.  —  There  is  a  constitutional  proliibition  forbidding 
corporations  to  combine  or  conspire  together  for  the  purpose  of  forcing  up  or 
down  the  price  of  any  agricultural  product  or  article  of  necessity  for  specula- 
tive purposes  (Cons.,  Art.  190).  Under  the  Act  of  July  7,  1892,  this  Consti- 
tutional provision  is  put  in  force  in  the  form  of  an  express  anti-trust  statute 
(Laws  of  1892,  Act  90). 

21.  Annual  License  Tax  —  There  is  no  annual  license  tax,  properly  speak- 
ing, in  existence  in  Louisiana. 

22.  Extension  of  Corporate  Existence.  —  There  is  no  statutory  pro- 
vision therefor. 

23.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  for  fictitious  issues  of  stock,  for  violation  of  the  anti-trust  act  and 
for  insolvency  (Laws  of  1902,  Act  224  ;  see  also  Cons.,  Art.  266,  and  R.  S.,  sec. 
731). 

La.  Savings  Bank,  35  La.  Ann.  196. 

24.  Amendments. —  Ordinarily  amendments  may  be  adopted  by  vote  of 
three-fourths  of  the  stock  represented  at  any  meeting  called  for  that  purpose. 
The  capital  stock  may  be  increased  or  decreased,  however,  by  a  two-thirds 
vote.  Amendments  must  be  recorded  and  filed  in  the  local  office  and  in  the 
office  of  the  Secretary  of  State,  but  do  not  need  to  be  published  (Act  26,  1882  ; 
Act  July  14,  1898;  sec.  687).  The  charter  may  be  amended  in  any  other  re- 
spect desired. 

25.  Dissolution.  —  Corporations  maybe  dissolved  by  vote  of  three-fourths 
of  the  stockholders  represented  at  any  meeting  called  for  that  purpose  (Civ. 
Code,  Art.  447;  11.  S.,  sec.  688;  Laws  of  1902,  Act  224). 

Curie  v.  Santini,  16  La.  Ann.  27. 

26.  Foreign  Corporations.  —  Foreign  corporations  must  deposit  in  the 
office  of  the  Secretary  of  State  a  statement  showing  the  place  of  its  domicile, 
together  with  the  name  of  the  agent  or  officer  within  the  State  upon  whom 
service  of  process  may  be  made  (Cons.,  Art.  264  ;  Act  of  July  10, 1890 ;  Act  of 
June  28,  1900,  sec.  375).  They  are  also  required  to  file  the  same  annual 
reports  as  domestic  corporations  (sec.  736  ;  Laws  of  1898,  Act  170). 

State  cxre.l.  Watkins  y.Comiiauy,  106  La.  Ann.  621  ;  31  So.  172;  State  v.  Southern 
Pacific  Co.,  52  La.  Auu.  1822  ;  28  .So.  372;  Milwaukee  Truiit  Co.  v.  Insurance  Co.,  106 
La.  Ann.  669  ;  31  So.  298 ;  New  Orleans  v.  Insurance  Co.,  106  La.  Ann.  31 ;  30  So.  254. 

MAINE. 

(The  references  cited  below  are  to  the  Revised  .Statutes  of  1904,  chnp.  47,  unless  othenvise 
elated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
Business  corjiorations  are  organized  undrr  the  provisions  of  chap.  47  of  the 
Revised  Statutes  of  1901.  Spfcial  acts  arc  jjrovided  for  banks,  gas  and 
electric  companies,  navigation,  railway,  insurance,  and  trust  companies,  tele- 

283 


INCOUrORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

graph  aiul  telephone,  water  aiul  aqueduct  corporations.  Corporations  may, 
however,  be  formed  for  the  construction  and  operation  of  railways  without 
the  State  ;  also  telegraph  and  telephone  companies,  gas  and  electrical  com- 
panies with  the  same  limitations  (sec.  6). 

:.'.  Incorporators.  —  Any  number  of  persons  not  less  than  three  may  in- 
corporate.    'I'iiere  are  no  specific  residential  requirements  (sec.  G). 

3.  Procuring  the  Charter.  — The  incorporators  should  first  prepare  and 
sign  written  artiiles  of  association,  setting  forth  the  puri)0ses  of  the  corpora- 
tion, the  place  where  the  first  meeting  of  incorporators  shall  be  held,  and  the 
date  thereof,  together  with  the  names  and  residences  of  the  incorporators. 
They  should  then  sign  a  waiver  of  notice  of  the  first  meeting  of  incorpora- 
tors, fixing  the  time  and  place  of  holding  said  meeting,  describing  the  pur- 
poses thereof  aa  follows:  (1)  to  organize  into  a  corporation;  (2)  to  adopt  a 
corporate  name;  (3)  to  define  the  purposes  of  the  corporation  ;  (4)  to  fix  the 
amount  of  capital  stock  and  divide  the  same  into  shares  ;  (5)  to  elect  a 
president,  not  less  than  three  directors,  a  clerk,  a  treasurer,  and  all  other 
necessary  officers;  (6)  to  adopt  a  code  of  by-laws;  (7)  to  act  upon  any  other 
business  which  may  projierly  come  before  the  meeting.  The  meeting  should 
then  be  held,  whereat  a  chairman  and  a  clerk  are  chosen.  The  clerk  should 
be  forthwith  sworn.  After  the  business  described  above  is  concluded,  a  cer- 
tificate of  organization  should  be  prepared  and  signed  by  the  president  and  a 
majority  of  the  board  of  directors  (for  contents  of  certificate  of  organization 
see  sec.  -1,  post).  This  certificate  must  be  sworn  to  by  the  persons  signing  the 
same.  The  certificate  of  organization  must  next  be  submitted  to  the  Attorney- 
General  for  examination  and  approval.  After  this  is  obtained,  the  certificate 
of  organization,  together  with  the  certificate  of  the  Attorney-General  approv- 
ing the  same,  must  be  recorded  in  the  otfice  of  the  register  of  deeds  of  the 
county  where  the  principal  place  of  business  of  the  corporation  is  located. 
Next,  a  certified  copy  of  the  certificate  of  organization  must  be  filed  in  the 
office  of  the  Secretary  of  State.  As  soon  as  the  certificate  above  referred  to  is 
filed  in  the  office  of  the  Secretary  of  State,  the  corpjorate  existence  commences 
(sees.  3,  4,  6,  7,  8,  9,  10). 

4.  Contents  of  the  Certificate  of  Organization.  —  The  certificate  must 
set  forth  : 

a.  Name.  —  The  name  of  the  corporation.  Similarity  of  names  is  not 
forbidden. 

h.  Purposes.  —  As  many  purposes  as  may  be  desired  may  be  inserted  pro- 
vided they  are  not  covered  by  special  acts. 

c.  Capital  Stock.  —  The  capital  stock  cannot  be  less  than  $1,000. 

d.  Capital  Stock  paid  in.  —  No  particular  amount  required  by  statute. 

e.  Par  Value  of  Shares.  —  This  may  be  any  amount. 

/.    Stockholders.  —  Names  and  residences  of  the  subscribers  to  capital  stock. 
g.    Domiciliary  Office.  —  The  name  of  the  county  where  the  corporation  is 
located. 

Chafee  v.   Bank,  71  Me.  514. 

h.  Directors.  — Nnmber  and  names  of  directors.  There  must  be  at  least 
three,  and  all  must  be  stockholders.     There  are  no  residential  requirements. 

i.  Clerk.  — Name  and  residence  of  the  clerk.  The  clerk  must  be  a  resi- 
dent of  the  State  (sees.  3,  7). 

5.  Statutory  Po-wers.  —  Tn  addition  to  the  enumeration  of  the  common 
law  powers  of  corporations,  the  statute  grants  to  corporations  a  number  of  ad- 

284 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

ditional  powers  which  may  be  enumerated  as  follows  :  To  hold  stock  and 
bonds  in  other  corporations,  to  conduct  business  in  other  States  and  countries, 
to  issue  preferred  stock,  to  consolidate  with  other  corporations,  to  vote  by 
proxy,  to  forfeit  stock  for  non-payment  of  assessments,  to  hold  directors' 
meetings  outside  of  the  State,  to  issue  stock  for  services  and  property  (sees. 
16,  17,  37,  38,  46,  51). 

Franklin  Co.  i:   Bank,  68  Me.  43. 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  as  to  the 
amount  of  indebtedness. 

7.  Organization  Tax.  —  The  organization  tax  is  $10  for  companies  having 
a  capital  stock  of  510,000  or  less.  Beyond  that  and  up  to  8500,000  the 
organization  tax  is  850,  and  for  each  hundred  thousand  dollars  in  excess  of 
$;.oOO.tKM),  810  additional  (sec.  8). 

8.  Filing  and  Recording  Fees.  —  Fee  to  Attorney-General  for  examining 
and  approving  certificate  of  organization,  85 ;  fee  to  register  of  deeds  for  re- 
cording certificate  of  organization  and  certified  copy,  usually  from  84  to  85 ; 
fee  to  Secretary  of  State  for  filing  certified  copy  of  certificate  of  organization, 
85 ;  fee  to  Secretary  of  State  for  certified  copy  of  organization  certificate, 
S3  (sec.  8). 

9.  Commencing  Business.  —  Aside  from  the  right  to  perfect  tlte  organi- 
zation of  the  coqioration,  no  business  can  be  transacted  until  after  the  certifi- 
cate of  organization  is  approved  by  the  Attorney-General,  recorded  in  the 
office  of  the  register  of  deeds,  and  a  certified  copy  thereof  filed  in  the  office  of 
tlie  secretary  of  State  (sec.  10). 

10.  Organization  Meeting.  —  Must  be  held  within  the  State  in  the  ab- 
sence of  any  .'Statute  authorizing  it  to  be  held  elsewhere  (sec.  11).  The  first 
directors'  meeting  should  also  be  held  there  (Laws  of  1903,  chap.  182). 

Freeman  v.  Company,  .38  Me.  343. 

11.  Meetings  of  Stockholders  and  Directors.  —  All  meetings  of  stock- 
holders must  be  licld  within  the  .*^tate.  Directors'  meetings  may  be  held  with- 
out the  StatL'  if  the  by-laws  so  provide  (sees.  11,  10). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  at  least  three  directors,  each  of  whom  must  be  a  stockholder. 
There  are  no  residential  requirements.  They  may  be  classified  if  desired, 
and  may  act  through  committees  (sec.  19). 

b.  Liabililiex.  —  Directors  are  liable  for  the  illegal  declaration  of  dividends 
(sec.  32). 

13.  Stockholders'  Liabilities.  —  Stockholders  in  ordinary  busine.ss  cor- 
porations are  lialdc  only  for  thrjr  unpaid  stock  subscrijitions  (sees.  N-l,  95). 
They  arc  also  liable  to  creditors  to  the  extent  of  illegal  dividends  received  by 
them  (sec.  32). 

Grindle  v.  Stone,  78  Me.  17G  ;  3  Atl.  183. 

H.  Stock  Certificates.  —  Each  shareliolder  is  entitled  to  have  a  stock 
certificate  issueil  to  him  signed  by  tiie  president  or  vice-president  and  by  the 
cashier,  clerk,  or  tnasurer  (sec.  34). 

15.  Preferred  Stock.  —  Two  or  more  kinds  of  stock  may  be  crcatcMl  with 
such  distinctions,  prcferetices,  and  voting  jxtwers  as  shall  be  fixoil  and  de- 
termined by  the  by-laws  or  by  vote  of  the  stoikholdcrs  at  a  mpetiiig  called  for 
that  jiiirpose.  Any  or  all  of  the  capital  str)ck  may  be  preferred,  and  any 
dividend  paid  thereon  that  may  be  desired  (sec.  49). 

285 


IXCORrORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

16.  Payment  of  Capital  Stock.  —  A  corpoiiition  may  piircliase  mines, 
manulaotoiifs,  or  othor  pruporty  necessary  for  its  bu.siness,  and  tlie  stock  of 
other  companies  owning  mining,  manufactnring,  apparatus,  mills,  or  otlier 
property  necessary  for  its  business,  and  issue  stock  to  the  amount  of  tlie  value 
thereof  in  payment  therefor.  May  likewise  issue  stock  for  services  rendered 
to  such  corporation,  and  the  stock  so  issued  shall  be  full-paid  stock  and  not 
liable  to  any  further  call  or  payment  thereon,  and  in  the  absence  of  actual 
fraud  in  the  transaction  the  judgment  of  the  directors  as  to  the  value  of  the 
property  purchased  or  services  rendered  shall  be  conclusive  (sees.  50,  51). 

Libby  v.  Tobey,  82  Me.  397;  19  Atl.  904. 

17.  Books.  —  The  clerk  is  required  to  keep  at  the  office  of  the  corpora- 
tion within  the  State  all  corporate  records  and  a  stock  register  which  shall  be 
open  at  all  reasonable  hours  to  the  inspection  of  persons  interested,  who  may 
make  extracts  therefrom  (sees.  19,  21). 

IS.  Office  and  Clerk.  —  All  domestic  corporations  must  have  a  clerk  and 
must  keep  at  some  fixed  place  within  the  State  a  clerk's  office  where  shall  be 
kept  the  corporate  records  and  the  stock  register  (sees.  3,  20). 

19.  Reports.  —  Corporations  must  file  in  the  office  of  the  Secretary  of 
State  annually  on  or  before  the  first  day  of  June  a  statement  signed  and 
sworn  to  by  the  president  or  treasurer  .containing  the  names  of  the  directors, 
the  president,  treasurer,  and  clerk,  with  the  residence  of  each,  the  location  of 
its  principal  ollice  within  the  State,  and  the  amount  of  authorized  capital  stock 
sec.  26). 

20.  Auti-Trust  Statute.  —  Combinations  for  regulating  prices  are  pro- 
hibited (sees.  53,  55). 

21.  Annual  Franchise  Tax.  —  Where  the  authorized  capital  stock  does 
not  exceed  $50,000,  the  annual  franchise  tax  is  $5.  Where  the  capital  stock 
does  not  exceed  ^200,000,  the  tax  is  $10  ;  where  it  does  not  exceed  $500,000 
the  tax  is  $25  ;  where  it  does  not  exceed  $1,000,000,  the  tax  is  $50  ;  for  each 
additional  million  dollars,  or  part  thereof,  $25  additional.  This  tax  becomes 
due  and  payable  on  the  first  day  of  September,  and  is  assessed  on  or  before 
the  first  day  of  July  of  each  year  (chap.  8,  sees.  18,  22). 

22.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Failure  to  organ- 
ize within  two  years  from  the  date  when  the  certificate  of  organization  has 
been  filed  with  the  Secretary  of  State  renders  the  charter  liable  to  forfeiture. 
Also  whenever  the  annual  franchise  tax  shall  have  remained  in  arrears  for  tlie 
period  of  one  year  after  the  same  shall  have  become  payable  (chap.  1,  sees.  28, 
20  ;  chap.  8,  sees.  21,  22). 

23.  Amendments.  —  Corporations  may  change  their  names  and  location, 
increase  or  reduce  the  amount  of  authorized  capital  stock,  change  the  number 
of  shares  or  the  numl)erof  directors  by  a  majority  vote  of  the  stock  issued  and 
outstanding.  The  amendment  to  take  effect  when  a  certificate  of  the  change 
has  been  filed  in  the  office  of  the  Secretary  of  State,  which  must  be  done 
within  ten  days  after  the  vote  is  taken.  The  purposes  of  the  corporation 
cannot  be  changed  except  by  act  of  the  legislature  (sees.  36,  39,  40,  44,  45, 
47,  52). 

24.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  the 
extension  of  corporate  existence. 

25.  Dissolution.  —  Corporations  may  be  dissolved  upon  application  to 
the  courts  (sees.  77,  83). 

26.  Foreign  Corporations.  —  There  are  no  statutory  requirements  as  to 

28G 


SYNOPSIS-DIGEST   OF  INCORPORATION  ACTS. 

the  transactions  of  business  by  foreign  corporations  within  the  State.     No 
license  fee  is  exacted. 

Cousens  v.  Lovejov,  81  Me.  467  ;  17  Atl.  49.5  ;  Childs  v.  Cleaves,  95  Me.  498 ;  50  Atl. 
714. 

MARYLAND. 

(The  references  cited  below  are  to  Art.  XXIII.  of  the  Public  General  Laws,  1888,  unless 
otherwise  stated.) 

1.  Statutes  under  -which  Business  Corporations  may  incorporate. 
—  The  Business  Corporation  Act  of  Maryland  is  found  in  the  Public  General 
Laws  of  ^Maryland,  1888,  sees.  1-303  inclusive.  Under  this  act  corporations 
may  be  formed  for  any  purpose  designated  in  twenty-five  classes. 

2.  Incorporators.  —  Five  or  more  persons,  wlio  must  be  citizens  of  the 
United  .States  and  a  majority  of  them  citizens  of  Maryland  (sees.  14,  42). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
set  forth : 

a.  Incorporators''  Names.  —  Xames  in  full  and  places  of  residence  of  the 
incorporators  (sec.  42,  sub.  1.) 

b.  Name.  —  Corporate  name,  which  shall  always  include  the  name  of  the 
county  or  city  in  which  it  may  be  formed.  Similarity  of  names  not  forbidden 
(sec.  42,  sub.  2). 

c.  Purposes.  —  The  objects  or  purposes  for  which  the  corporation  is  formed. 
The  statute  expressly  provides  that  companies  may  be  incorporated  for  two 
or  more  of  the  purposes  designated  in  the  various  classes  (sees.  38,  42,  sub.  3). 

d.  Duration.  —  Time  of  existence  not  to  exceed  forty  years  (sec.  42,  sub.  3). 

e.  Provision  for  the  Re/julation  of  Internal  Affairs.  —  Articles,  conditions, 
and  provisions  under  which  the  corporation  is  formed  (sec.  42,  sub.  3). 

/.  Domicile.  —  Places  where  the  operations  of  the  corporation  shall  be 
carried  on  and  location  of  the  domiciliary  office  within  the  State  (sec.  42, 
sub.  4). 

g.  Capital  Slock.  —  Amount  of  capital  stock,  if  any.  This  is  unlimited  as 
to  amount  (sec.  42,  sub.  5). 

h.  Shares.  —  Number  and  par  value  of  shares.  Par  value  of  shares  may 
be  any  amount  (sec.  42,  sub.  0). 

J.  Directors.  —  Number  of  directors  and  names  of  the  board  for  the  first 
year  (sec.  42,  sub.  7). 

4.  Statutory  Powers— In  addition  to  the  statutory  enumeration  of 
common  law  powers,  corporations  have  the  following  additional  powers :  To 
vote  by  proxy  at  stockholders'  meeting,  to  forfeit  tlie  slock  for  nonpayment 
of  assessments,  to  consolidate  with  other  corporations,  to  remove  directors, 
and  to  liold  property  within  or  without  the  State  (sees.  7,  11,  39,  39  a,  50-50). 

Booth  el  a!.  V.  Kobinson  etal.,  55  Md.  419. 

5.  Procuring  the  Charter.  —  Charter  must  be  executed  and  acknowl- 
edged aii<l  tlwn  submitted  to  one  of  the  judges  of  the  judicial  circuit  within 
which  the  principal  ofKce  of  tlie  corpf)ration  is  to  be  located  (in  Baltimore,  to 
one  of  the  judj,r(>.s  of  tlie  Supreme  Bench  of  Baltimore  City).  If  lie  api)rovo9 
it,  he  certifies  that  fact  upon  the  certificate.  The  certificate  is  then  recorded 
ill  the  office  of  the  clerk  of  the  circuit  court  of  the  county  in  which  tlie  princi- 
pal office  is  to  be  located  (in  Baltimore  in  the  office  of  the  clerk  of  Superior 
Court  of  Baltimore  City).     Upon  so  recording  corporate  existence  commences. 

287 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

The  certificate  of  the  judge  is  made  conclusive  evidence  that  the  certificate 
does  ct)uforiu  to  law. 

Bouaparte  v.  B.  H.,  etc.  Co.,  75  Md.  340;  23  Atl.  784. 

6.  Corporate  Indebtedness.  —  Corporate  indebtedness  must  not  exceed 
total  amount  of  authorized  capital  stock  (sec.  75). 

7.  Organization  Tax. —  The  organization  tax  is  one-eighth  of  one  per 
cent  upon  the  capital  stock  authorized  (G.  L.,  Art.  LXXXI.  sec.  88  f). 

8.  Filing  and  Recording  Fees.  —  Filing  fees  in  local  county  office,  10 
cents  per  folio;  clerk  of  courts  foes,  $5;  cost  of  certified  copy  of  the  certifi- 
cate of  incorporation  for  filing  with  State  tax  commissioner,  $;}.00. 

9.  Commencing  Business.  —  Corporations  cannot  comnience  business 
until  a  certified  copy  of  the  articles  is  filed  with  the  tax  commissioner.  No 
special  amount  of  stock  need  be  subscribed,  but  one-fourth  of  the  capital  stock 
must  be  paid  in  each  year. 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
■within  the  State,  in  the  absence  of  any  statute  providing  otherwise. 

11.  Meetings  of  Stockholders  and  Directors.—  Stockholders'  meetings 
must  be  held  witliin  the  State.  Directors'  meetings  may  be  held  witliout  the 
State  if  the  by-laws  so  provide  (sees.  6,  7). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualijications.  —  Must 
not  be  less  than  four  nor  more  than  twelve.  All  must  be  citizens  of  the 
United  States  and  a  majority  of  them  citizens  of  Maryland.  They  may  be 
removed  by  the  stockholders  (sec.  57).  Cumulative  voting  may  be  provided 
for  if  desired  (sec.  58). 

h.  Liah'dilies.  —  Directors  are  liable  for  illegal  payment  of  dividends  and 
for  loans  to  stockholders.  The  president  and  a  majority  of  the  directors  must 
within  thirty  days  after  the  payment  of  the  last  instalment  of  the  capital  stock 
make  a  certificate  stating  the  amount  of  capital  stock  paid  in  and  of  all 
property  received  in  payment  of  stock  subscriptions  and  the  extent  to  which 
such  payments  have  been  made  in  property.  The  certificate  must  be  then 
signed  and  sworn  to  by  the  president,  and  must  be  filed  with  the  clerk  of  the 
court  in  which  the  certificate  of  incorporation  is  recorded  (sees.  65,  67,  68,  69). 

Fisher  v.  I'arr,  92  Md.  24.5 ;  48  Atl.  621. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent  of 
their  unpaid  stock  subscriptions.  They  are  also  liable  to  creditors  to  an 
amount  equal  to  the  amount  of  their  stockholdings  for  all  debts  contracted  in 
the  name  of  the  corporation  until  the  amount  of  capital  stock  fixed  in  the 
certificate  of  incorporation  has  been  paid  in,  and  a  certificate  thereof  made 
and  filed  by  the  secretary  and  board  of  directors  as  provided  by  law  (sees.  64, 
66,  271). 

Rider  v.  Morrison,  54  Md.  429. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
signed  by  such  officers  as  the  by-laws  may  prescribe. 

15.  Preferred  Stock.  —  Preferred  stock  maybe  issued  either  by  provid- 
ing for  such  issuance  in  the  certificate  of  incorporation,  or  by  vote  of  the 
common  stockholders  thereafter  had  (sec.  294). 

Scott  V.  Company,  93  Md.  475  ;  49  Atl.  327. 

16.  Payment  of  Capital  Stock.  --  Stock  subscriptions  may  be  paid  for 
in  land  or  other  property  at  a  valuation  agreed  upon  between  the  corporation 

288 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

and  the  subscribers  where  the  property  is  such  as  is  suitable  for  corporate 
purposes  (sec.  61 ;  see  also  sec.  6.5). 

17.  Books.  —  A  book  must  be  kept  containing  a  list  of  stockholders,  show- 
ing place  of  residence  and  number  of  shares  held  by  them,  time  when  they 
became  owners  of  such  shares,  and  such  book  must  be  kept  open  for  inspection 
during  business  hours  by  the  stockholders  (sec.  72 ;  see  also  sec.  5). 

Weihenmayer  v.  Bitner,  88  Md.  325 ;  42  Atl.  245 ;  Brant  v.  Ehleu,  59  Md.  1 ; 
Cahill  V.  Association,  94  Md.  353;  50  Atl.  1044. 

18.  Office.  —  Must  maintain  an  office  in  the  State  (sec.  42). 

19.  Reports.  —  Stockholders  owning  five  per  cent  of  the  capital  stock  are 
entitled,  upon  written  request,  to  have  a  report  iu  detail  of  assets  and  liabilities 
of  the  corporation.  In  January  or  July  the  president  and  treasurer  file 
statement  of  affairs  in  records  of  the  corporation  (sees.  5,  71,  73). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  Maryland. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  for  failure  to  pay  taxes  for  a  period  of  two  years,  or  for  non-user  or 
misuser  of  corporate  powers  (sees.  88  e,  255,  263;  Laws  of  1900,  chap.  272). 

22.  Amendments.  —  Charters  may  be  amended  for  any  purpo.se  desired. 
A  peculiar  provision  is  in  force  in  Maryland  which  has  the  effect  of  permit- 
ting a  change  in  the  par  value  of  the  shares.  Where  the  par  value  of  the 
stock  is  reduced  by  losses,  the  stockholders  may  establish  tlie  true  value  of 
the  stock  at  a  meeting  called  for  that  purpose,  and  may  provide  for  calling  in 
and  cancelling  the  whole  or  any  part  of  such  stock  and  issue  stock  in  lieu 
thereof  at  such  par  value  as  they  may  decide  so  as  to  represent  the  amount 
of  the  true  value  .so  established  (sees.  47,  74-78,  79,  80). 

23.  Extension  of  Corporate  Existence.  —  (See  Laws  of  1900,  chap.  272). 

24.  Dissolution.  —  I>y  the  State  (.Attorney- General)  forfeited  for  misuse, 
etc.,  or  by  vote  of  stockholders  for  any  reason,  by  bill  in  equity  in  name  of 
the  corporation.  There  can  be  no  dissolution  until  all  State  taxes  are  paid 
(C,  Art.  XXIII.  sees.  255,  264,  265;  Act  1892,  chap.  399;  Laws  of  1902, 
chap.  108). 

25.  Annual  Franchise  Tax.  —  None  after  organization,  but  one-eighth 
of  one  per  cent  each  year,  unless  the  company  is  organized  within  two  years 
from  date  of  certificate  of  incorporation  (Laws  of  1900,  ch.np.  272). 

20.  Foreign  Corporations.  —  File  with  Secretary  of  State  their  charter, 
with  fee  of  S'-5  and  a  statement  setting  forth  amount  of  capital  stock  author- 
ized and  issued,  assets  and  liabilities,  character  of  business,  principal  office 
•in  State,  and  appoint  agent  to  receive  process  (Laws  of  1898,  chap.  270,  sees. 
109  a,  b,  c,  d,  e). 

Crook  V.  Company,  87  .Md.  138;  39  Atl.  94  ;  Condou  v.  Association,  89  Md.  99  ;  42 
Atl.  944. 

MASSACHUSETTS. 

(The  referencps  cited  below  are  to  the  Laws  of  I'Jl).'},  clinp.  437, 'commonly  known  as  the 
"  Hu.siness  Corporation  Law.") 

1.    Statutes  under  -which  Business  Corporations  may  incorporate. — 

Under  the  act  that  went  into  effect  August  1,  1903,  parties  may  incorporate 
for  any  lawful  purpose  not  covered  by  s()ccial  act,  except  to  buy  and  sell  real 
estate  or  to  distil  and  manufacture  intoxicating  litjuors.  Special  acts  are 
provided  for  banking,  trust,  surety,  safe  depo.sit,  insurance,  railway,  street 
19  289 


INCOUrOU  VTION    AND    ORGANIZATION    OF   CORPORATIONS. 

railway,  telograph,  telephono,  gas,  electric  light,  heat,  power,  canal,  aiiueduct, 
cemeterv,  ami  crematory  companies. 

2.  Incorporators.  —  There  must  be  at  least  three  incorporators.  There 
are  no  resiilonlial  nnpiirements  (sec.  7). 

Walworth  v.  lirackott,  98  Mass.  98. 

;>.  Articles  of  Incorporation  and  Organization.  —  The  incorporators 
should  first  prepare  and  sign  an  agreement  of  association,  stating  (a)  that  the 
subscribers  thereto  associate  themselves  together  with  the  intention  of  form- 
ing a  corporation.  The  agreement  should  also  set  forth  (/>)  the  corporate  name 
to  be  assumed,  (c)  the  location  of  the  principal  ollice  of  the  corporation  in  the 
commonwealth  and  elsewhere,  as  well  as  if  the  corporation  is  organized  to  do 
business  wholly  outside  of  tlie  Commonwealth.  In  addition  to  tlie  foregoing 
the  agreement  should  also  set  forth  (/I)  the  purposes  for  which  the  corporation 
is  formed,  the  nature  of  the  business  to  be  transacted,!  (e)  total  amount  of 
authorized  capital  stock  of  the  corporation  not  to  be  less  than  $1,000,  par 
value  of  the  shares  not  to  be  less  than  $5,  and  the  number  of  shares  into 
which  the  capital  stock  is  to  be  divided,  and  the  restrictions  if  any  imposed 
upon  its  transfer.  If  there  are  more  than  two  classes  of  stock,  a  description 
of  the  classes  and  a  statement  of  the  terms  upon  -which  they  are  to  be  created 
and  the  method  of  voting  thereon.  (/)  If  desired,  provisions  may  be  inserted 
for  the  conduct  and  the  regulation  of  the  business  of  the  corporation,  for  its 
voluntary  dissolution,  or  for  limiting  or  defining  or  regulating  the  powers  of 
the  corporation  or  of  its  directors  or  stockholders,  (r/)  The  subscribers  by 
■whom  the  first  meeting  of  the  corporation  is  to  be  called  must  be  stated,  or, 
in  lieu  thereof,  the  notice  of  said  meeting  is  waived  in  writing  by  each  of  the 
incorporators,  (h)  There  must  also  appear  the  names  and  residences  of  the 
incorporators,  and  the  amount  of  stock  subscribed  for  by  each.  The  meeting 
should  then  be  held,  whereat  a  chairman  and  temporary  clerk  should  be 
chosen.  The  clerk  should  be  forthwith  sworn.  After  by-laws  have  been 
adopted  the  incorporators  must  proceed  to  the  election  of  directors,  a  treasurer, 
clerk,  and  such  other  officers  as  the  by-laws  may  prescribe.  A  majority  of  the 
directors  must  forthwith  make,  sign,  and  make  oath  to  the  articles  of  organi- 
zation (for  contents  of  articles  of  organization  see  sec.  4,  post).  The  articles 
of  organization  and  the  records  of  the  first  meeting  of  incorporators  must  be 
submitted  to  the  commissioner  of  corporations  for  examination,  and  he  may 
require  such  amendments  thereof  and  such  additional  information  as  he  may 
think  necessary.  If  he  finds  the  articles  conform  to  the  provisions  of  the 
statute,  he  shall  so  certify  and  endorse  his  approval  thereon.  Thereupon  the 
articles  shall  upon  payment  of  the  organization  tax  be  filed  for  record  in 
the  office  of  the  Secretary  of  State  of  the  Commonwealth,  who  will  issue  a 
certificate  of  incor])oration.  The  corporate  existence  commences  upon  the 
filing  of  the  articles  of  organization  in  the  office  of  the  Secretary  of  the  Com- 
monwealth. The  certificate  of  incorporation  or  a  certified  copy  thereof  is 
conclusive  evidence  of  the  existence  of  the  corporation  (sees.  8,  9,  10,  11,  12). 

Bird  V.  Daggett,  97  Mass.  494. 

4.  Contents  of  the  Articles  of  Organization.  —  The  articles  of  organi- 
zation must  set  forth  :  (a)  A  true  copy  of  the  agreement  of  association,  and 
the  names  of  the  subscribers  thereto,     (b)    The  date  of  the  first  meeting  and 

1  The  Secretary  of  State  permits  the  insertion  of  any  number  of  purposes  in  the  article 
of  association  not  covered  bv  special  act. 

290 


SYNOPSIS-DIGEST   OF    IXCORPOUATIOX    ACTS. 

all  adjournments  thereof,  if  any,  (c)  Amount  of  capital  stock  to  be  issued, 
tiie  amount  thereof  to  be  paid  for  in  casli,  by  instalments,  and  the  instal- 
ment to  be  paid  before  the  corporation  commences  business,  and  the  amount 
thereof  to  be  paid  for  in  property.  If  such  property  consists  in  part  of  real 
estate,  its  location  and  the  amount  of  stock  to  be  issued  therefor  shall  be  stated. 
If  any  part  of  such  property  is  personal,  it  shall  be  described  in  such  detail  as 
the  commissioner  of  corporations  may  require  and  the  amount  of  stock  to  be 
issued  therefor  shall  be  stated.  If  any  part  of  the  capital  stock  is  issued  for 
services  or  expenses,  the  nature  thereof  and  the  amount  of  stock  which  is 
issued  therefor  shall  be  stated,  (d)  Tlie  name,  residence,  and  post-office 
address  of  each  of  the  officers  of  the  corporation  (sec.  11). 

5.  Corporate  Name.  —  The  name  used  sliall  indicate  that  it  is  a  corpora- 
tion as  distinguished  from  a  natural  person  or  partnership.  It  is  forbidden 
to  use  the  name  of  another  domestic  corporation  or  of  a  foreign  corporation, 
or  of  any  partnership  or  association  carrying  on  business  in  the  Common- 
wealth at  the  time  of  such  organization  or  within  three  years  prior  thereto,  or 
a  name  so  similar  thereto  as  to  be  liable  to  be  mistaken  for  it,  except  with  the 
consent  in  writing  of  said  corporation,  association,  or  partnersliip.  Courts. 
are  given  express  jurisdiction  in  equity  to  enjoin  the  illegal  use  of  the  cor- 
porate name  (sec.  5). 

G.  Statutory  Powers.  —  In  addition  to  the  enumeration  of  common  law 
powers  of  corporations,  the  statute  grants  to  corporations  a  number  of  ex- 
traordinary powers  which  may  be  enumerated  as  follows  :  To  have  perpetual 
succession  ;  to  insert  in  the  agreement  of  association  rules  for  the  regulation 
of  the  internal  affairs  of  the  corporation;  to  appoint  an  executive  committee 
from  its  board  of  directors,  to  whom  may  be  delegated  the  management  of  the 
current  and  ordinary  affairs  of  the  corporation.  The  act  expressly  forbids 
a  corporation  to  vote  upon  any  share  of  its  own  stock.  It  authorizes  corpora- 
tions to  vote  by  proxy,  to  forfeit  shares  for  non-payment  of  assessments,  to 
issue  preferred  stock,  and  to  cla.ssify  directors  (sees,  i,  IG,  19,  23,  24). 
Commonwealth  v.  Railway,  142  Mass.  146;  7  N.  K.  716. 

7.  Corporate  Indebtedness.  —  There  is  no  limit  to  the  amount  of  cor- 
porate indebtedness  in  Massachusetts. 

8.  Organization  Tax.  —  The  organization  tax  is  2.j  cents  on  each  thou- 
sand dollars  of  authorized  capital  stock,  except  that  in  no  ca.se  shall  it  be  less 
than  1310  (sec.  88). 

U.  Filing  and  Recording  Fees.  — There  are  no  filing  fees  in  the  office  of 
the  Secretary  of  Stati;  otiiei-  tiian  tlie  organization  tax.  For  certified  copy  of 
tlie  articles  of  incorporation,  •■?.">  (sees.  89,  90). 

10.  Commencing  Business.  —  Aside  from  the  right  to  perfect  the  organi- 
zation of  the  corporation,  no  business  can  be  transacted  until  the  articles  of 
organization  have  been  approved  by  the  commissioner  of  cor|)orations,  the 
organization  tax  paid,  and  the  certificate  recorded  in  the  ofRce  of  the  Secretary 
of  the  Commonwealth  (sec.  12). 

Chn.se  Elevator  Co.  v.  Company,  1. 52  Ma.s8.  428 ;  2S  N.  E.  .300;  II.iwps  i-.  An[,'lo- 
Saxon  Co  ,  101  .Mass.  .3S.5  ;  A.  M.  F.  Iiisuranco  Co.  i'.  JcHsor,  87  MasH.  446. 

11.  Organization  Meeting. —  The  various  steps  necessary  to  jtrocure  the 
organization  of  the  corporation  have  already  been  set  forth  in  sec.  •i,(iiile. 
The  organization  meeting  must  take  place  within  tlie  Commonwealth.  The 
statutory  officers  in  Massachusetts  are  a  president,  il.-rk,  and  treasurer  (sees. 
9,  10,  20). 

291 


INCOnrORATION    AND   ORGANIZATION    OF    CORPORATIONS. 

12.  Meetings  of  Stockholders  and  Directors. —  All  meetings  of  stock- 
holders imisl  be  lieia  within  the  State.  Directors' meetings  may  he  held  with- 
out the  State  if  the  by-laws  so  provide  (sees.  '-'0,  25  ;  J.awsof  U»Ol,  chap.  207). 

13.  Diiectors'    Qualificatious,  Powers,  and  Liabilities,     a.    Qualijiai- 

^,-Q,^,_ There  must  be  at  least  three  directors,  each  of  whom  must  be  a 

stockholder  uuless  the  by-laws  otherwise  j)rovide.  There  are  no  residential 
requirements.  The  president  of  the  corporation  must  be  elected  annually  by 
and  from  the  board  of  directors.  The  other  otlicers  are  elected  by  the  stock- 
holders. Directors  may  be  divided  into  classes  not  exceeding  five,  if  desired 
(sec.  18).  Under  the  statute  the  board  may  elect  from  its  members  an  execu- 
tive committee,  to  whom  may  be  delegated  the  management  of  the  current 
and  ordinary  business  of  the  corporation  (sees.  17,  18,  19). 

b.  Liabilities.  —  Directors  who  make  oath  falsely  to  articles  of  organization 
are  jointly  and  severally  liable  to  any  stockholder  for  actual  damages  caused 
by  false  statements  tlierein  and  whicii  they  knew  to  be  false.  Also,  for  debts 
and  contracts  of  the  corporation  where  they  declare  or  assent  to  a  dividend 
when  the  corporation  is  or  thereby  is  rendered  bankrupt  or  insolvent,  to  the 
extent  of  such  dividend.  Also,  for  debts  contracted  between  the  time  of 
making  or  assenting  to  a  loan  to  the  directors  and  the  time  of  its  repayment, 
to  the  extent  of  such  loan  unless  they  voted  against  such  dividend  or  the  pay- 
ing of  such  loan  (sees.  34,  35).  No  director  can  be  held  liable  for  its  debts 
or'contracts  unless  the  corporation  has  been  duly  adjudicated  bankrupt  or 
unless  a  judgment  has  been  recovered  against  it  and  it  has  neglected  for  thirty 
days  after  demand  made  upon  it  to  pay  the  amount  due  (sees.  14,  30). 

Cole  V.  Cassidy,  138  Mass.  4.37. 

14.  Stockholders'  Liabilities. —  Stockholders  are  liable  for  the  debts  of 
the  corporation  in  any  event  to  the  extent  of  their  unpaid  stock  subscriptions. 
The  statute  also  provides  that  stockholders  who  vote  to  reduce  the  capital 
stock  of  the  corporation  contrary  to  law  shall  be  liable  for  the  payment  of 
the  debts  and  contracts  of  the  corporation  existing  at  the  time  of  such  reduc- 
tion to  the  extent  of  the  amount  withdrawn.  Stockholders  are  also  liable  for 
all  moneys  due  to  operatives  for  services  rendered  within  six  months  before 
demand  made  upon  the  corporation  and  its  neglect  or  refusal  to  make  such 
payment  (sees.  33,  36,  39). 

Hancock  National  Bank  v.  Ellis,  166  Mass.  414  ;  44  N.  E.  349  ;  Tettibone  v.  Com- 
pany, 148  Mass.  411  ;  19  N.  E.  337. 

15.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him,  signed  by  the  president  and  treasurer  (sec,  26), 

Wyman  v.  Powder  Co.,  62  Mass.  168;  Sibley  v.  Bank,  1.33  Mass.  515. 

10.  Preferred  Stock.  —  One  or  more  kinds  of  stock  may  be  created  under 
such  terms  and  conditions  as  may  be  provided  for  in  the  agreement  of  associ- 
ation or  in  an  amendment  thereto  adopted  as  provided  by  statute  (sees.  27,40). 

Am.  Tube  Works  v.  Machine  Co.,  139  Mass.  5  ;  29  N.  E.  63. 

17.  Payment  of  Capital  Stock.  —  Capital  stock  may  be  issued  for  cash, 
property,  services,  or  expenses.  If  it  is  paid  for  in  instalments,  this  fact  must 
be  set  forth  upon  the  certificate.  If  any  stock  be  issued  subsequent  to  the 
issue  of  stock  authorized  by  the  articles  of  association,  then  a  certificate  is  pre- 
pared within  tiiirty  days  after  the  date  when  said  stock  has  been  authorized. 
and  is  signed  and  sworn  to  by  the  president,  treasurer,  and  a  majority  of  the 
directors,  setting  forth  :  (a)  Total  amount  of  capital  stock  authorized.  (//) 
The  amount  of  stock  already  issued  for  cash,  payable  in  instalments,  and  the 
202 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

amount  paid  thereon  ;  also  the  amount  of  full-paid  stock  already  issued  for 
either  property,  services,  or  expenses,  (f)  A  description  of  said  property  and 
the  nature  of  said  services  or  expenses.  This  certificate  must  be  submitted  to 
the  Commissioner  of  Corporations.  If  he  finds  it  conforms  to  the  law,  he 
sliall  so  certify  and  endorse  his  approval  thereon.  The  certificate  must  then 
be  filed  in  the'office  of  the  Secretary  of  the  Commonwealth,  who  upon  payment 
of  tlie  proper  fee  shall  cause  it  and  the  endorsement  thereon  to  be  recorded. 
The  law  provides  that  no  stock  shall  be  at  any  time  issued  unless  the  cash  or 
property,  services  or  expenses  for  which  it  was  autliovized  to  be  issued  has 
been  actually  received  or  incurred  by  or  conveyed  or  rendered  to  the  corpora- 
tion, and  the  president,  treasurer,  and  directors  shall  be  jointly  and  severally 
liable  to  any  stockholder  of  the  corporation  for  actual  damages  caused  to  him 
by  such  issue  (sec.  14). 

18.  Books.  —  The  clerk  is  required  to  keep  a  record  of  all  proceedings  of 
the  stockholders  and  board  of  directors.  The  corporation  is  required  to  Icecp 
a  stock  transfer  book  within  the  State.  These  books  are  open  to  the  inspection 
of  stockholders  at  all  times  (sec.  30). 

19.  Office  and  Clerk.  —  All  corporations  must  have  an  office  within  the 
State,  and  must  appoint  a  clerk  who  is  a  resident  of  the  Commonwealth  (sees. 
8,18). 

20.  Reports.  —  Every  corporation  shall  annually  within  thirty  days  after 
the  date  fixed  by  the  by-laws  for  the  annual  meeting,  or  within  thirty  days 
aft.^r  the  final  adjournment  of  such  meeting,  prepare  a  report  of  the  condition 
of  the  company,  signed  and  sworn  to  by  its  president,  treasurer,  and  at  least  a 
majority  of  its  directors,  stating  the  name  of  the  corporation  ;  location  of  its 
principal  office  in  the  Commonwealth  or  elsewhere  in  case  the  corporation  is 
organized  to  do  business  wholly  outside  of  the  Commonwealth  ;  date  of  its  last 
preceding  annual  meeting;  total  amount  of  its  authorized  capital  stock; 
amount  due  and  outstanding  and  amount  then  paid  thereon  ;  the  class,  or 
classes,  if  any,  into  which  it  is  divided  ;  the  par  value  and  number  of  its 
shares  ;  names  and  addresses  of  all  the  directors  and  officers,  and  the  date  on 
which  the  term  of  office  of  each  expires  ;  statement  of  the  assets  and  liabilities 
of  the  corporation  as  of  the  date  of  the  end  of  its  last  fiscal  year.  •  This  report 
nmst  be  submitted  to  the  commissioner  of  corporations  for  his  approval  and 
who  sliall  endorse  his  approval  thereon  in  conformity  with  the  law.  If  the 
corporation  has  a  ca[)ital  stock  of  S100,000  or  more,  it  shall  be  accompanied 
by  a  written  statement  of  the  aftairs  of  such  corporation.  The  statement  of 
the  auditor  of  the  corporation's  books  must  be  filed  with  the  annual  report. 

In  addition  to  the  foregoing,  every  corporation  shall  annually,  between  the 
first  and  tentii  of  -May,  make  a  return  to  the  tax  commissioner  under  oath  of 
its  treasurer,  stating  the  name  of  the  corporation  and  setting  forth  tiie  follow- 
ing as  of  the  first  day  of  >hiy  of  the  year  in  which  the  return  is  made:  the 
total  amount  of  the  capital  stock  of  tlie  corporation,  amount  issued  and  out- 
standing, and  the  amount  then  paid  thereon  ;  classes  into  which  it  is  divided  ; 
par  value  of  shares  ;  immber  of  its  shar.-.s,  and  tlieir  market  value,  as  to  each 
class  of  shares,  if  there  are  two  or  more  classes;  statement  of  the  real  estate, 
machinery,  merchandise,  and  other  assets  belonging  to  the  corporation  within 
and  without  the  Commonwealth  ;  a  list  of  th.;  stockholders  of  the  corporation, 
their  residences,  the  amount  an<l  class  of  stock  (if  more  than  one)  belonging 
to  each.  If  stock  is  pledged,  the  name  and  residence  of  the  pledgor  and 
pledgee  must  be  given  (sees.  45-50  inclusive). 

293 


INCORrOPvATION    AND    ORGANIZATION    OF    CORrOIlATIONS. 

21.  Anti-TruBt  Statute.  —  There  is  no  anti-trust  statute. 

22.  Annual  Franchise  Tax.  —  The  annual  franchise  tax  is  based  upon 
the  vahie  of  the  corporate  franchises.  This  tax  upon  tlie  vahie  of  the  corpo- 
rate franchises,  after  making  certain  deductions  enumerated  in  the  act,  shall 
necessitate  a  tax  levied  at  a  rate  to  be  determined  by  a  proportionate  part  of 
tlie  whole  amount  of  money  to  be  raised  by  taxation  upon  property  in  the 
Commonwealth  during  the  same  year,  as  returned  by  the  assessors  of  the 
several  cities  and  towns  of  the  State,  containing  an  amount,  less  said  deduc- 
tions, of  not  exceeding  twenty  per  cent  in  excess  of  the  value  as  found  by  the 
tax  commissioner  of  the  i"eal  estate,  machinery,  merchandise,  and  securities, 
which,  if  owned  by  a  natural  person  resident  of  the  Commonwealth,  would  be 
liable  to  taxation;  and  the  total  amount  of  taxes  to  be  paid  by  such  cor- 
poration in  any  year  upon  its  property  to  be  taxed  in  the  Commonwealth,  and 
upon  the  value  of  its  corporate  franchises,  shall  amount  to  not  less  than  one- 
tenth  of  one  per  cent  of  the  market  value  of  its  capital  stock  at  the  time  such 
assessment  is  made  by  the  tax  commissioner  (sees.  71,  76-87  inclusive).  Tlie 
tax  becomes  due  and  payable  on  November  1st  (See  also  Laws  of  190i,  chaps. 
225,  445.) 

23.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  for  usurpation  of  franchises  or  privileges  not  conferred  by  law 
(P.  S.,  chap.  ISO,  sec.  1724).  Also  for  failure  to  pay  annual  taxes  and  make 
annual  statements  for  two  successive  years  (sees.  49,  78). 

Kussell  V.  M'Lellan,  14  Pick.  63. 

24.  Amendments.  —  Articles  of  association  for  the  purposes  hereinafter 
designated  may  be  amended  at  a  meeting  called  for  that  purpose  by  a  vote 
of  two-thirds  of  all  its  stock,  or  two-thirds  of  each  class  of  stock  outstanding 
and  entitled  to  vote,  or  by  a  larger  vote  if  the  agreement  of  association  so  re- 
quires, to  wit:  changing  the  corporate  name,  nature  of  its  business,  classes 
of  stock  and  voting  jwwers  thereof,  sell,  lease,  or  exchange  its  property  or 
assets,  including  its  good-will  and  its  corporate  franchises.  After  a  vote  of  a 
majority  of  its  stockholders  at  a  meeting  duly  called  for  that  purpose  the  cor- 
poration may  authorize  the  change  of  the  location  of  its  principal  office  or  place 
of  business  in  the  Commonwealth,  or  change  the  par  value  of  the  shares  of  its 
capital  stock,  and  increase  or  reduce  the  same,  or  authorize  proceedings  for 
dissolution  (sees.  40,  42,  43,  44). 

Salem  M.  D.  Corp.  j;.  Ropes,  23  Mass.  23. 

25.  Extension  of  Corporate  Existence.  —  There  is  no  express  provision 
for  the  extension  of  corporate  existence.     (See  however  sec.  40.) 

20.    Dissolution.  —  By  a  majority  vote  of  all  classes  of  stock  entitled  to 
vote,  a  petition  for  dissolution,  to  be  addressed  to  the  courts  having  jurisdic- 
tion in  the  premises,  may  be  authorized  (sees.  51-55  inclusive). 
Stone  V.  Fraiiiingham,  109  Mass.  303. 

27.  Foreign  Corporations.  —  Every  foreign  corporation  which  has  a 
usual  place  of  business  within  the  Commonwealth  or  which  is  engaged  therein 
pf-rmanently  or  temporarily,  and  with  or  without  the  usual  place  of  business 
therein,  in  the  construction,  erection,  alteration,  or  repair  of  buildings,  bridges, 
railroads,  or  structures  of  any  kind,  shall,  before  doing  business  in  this  Com- 
monwealth, in  writing  appoint  the  commissioner  of  corporations  to  be  its 
attorney  upon  whom  all  lawful  process  may  be  served.  A  copy  of  the  power 
of  attorney  and  a  copy  of  the  vota  authorizing  its  execution,  duly  certified, 
must  be  filed  in  the  office  of  the  State  commissioner,  and  a  copy  of  its  char- 
294 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

ter,  a  certified  copy  of  its  articles  of  association,  and  also  a  true  copy  of  its 
by-laws,  and  a  certificate  in  such  form  as  the  commissioner  of  corporations 
may  require,  setting  forth  the  name  of  the  corporation,  location  of  its  prin- 
cipal office,  names  and  addresses  of  its  president,  treasurer,  clerk,  or  secretary, 
or  the  members  of  its  board  of  directors,  date  of  its  annual  meeting  and  for 
the  election  of  officers,  amount  of  its  capital  stock  authorized  and  due,  number 
and  par  value  of  its  shares  and  the  amount  paid  in,  and  if  any  part  of  such 
payment  has  been  made  otherwise  than  in  money,  the  details  of  such  pay- 
ment. This  certificate  nmst  be  signed  and  sworn  to  by  the  president  and 
treasurer  and  by  a  majority  of  its  directors.  No  foreign  corporation  can  tran- 
sact any  business  which  is  not  permitted  to  domestic  corporations  by  the  laws 
of  the  Commonwealth. 

Before  transacting  business  within  the  State  foreign  corporations  must 
pay  8'25  for  filing  copies  of  the  charter,  by-laws,  and  certificate  required  by 
the  act.  They  are  also  required  to  make  an  annual  certificate  of  the  condi- 
tion of  the  corporation  (sees.  5G-70  inclusive,  also  sec.  91).  Each  year 
foreign  corporations  are  required  to  pay  an  excise  tax  of  one  hundredth  of  one 
per  cent  of  the  par  value  of  its  authorized  capital  stock,  as  stated  in  its  annual 
statement  of  condition,  this  amount  never  to  exceed  §2,000  (sec.  75). 

Broadway  Nat.  Bank  v.  Baker,  176  Mass.  294;  57  N.  E.  603  ;  Kennebec  Ins.  Co.  v. 
Augusta  Ins.  Co.,  6  Gray,  204  ;  American  Ins.  Co.  v.  Owen,  15  Gray,  491 ;  Enterprise 
Brewing  Co.  v.  Grime,  173  Mass.  252  ;  53  N.  E.  855;  Hayward  v.  Leeson,  176  Mass. 
310 ;  57  N.  E.  656 ;  Bishop  v.  Globe  Co.,  135  Mass.  132 ;  Johnston  v.  Insurance  Co.,  132 
Mass.  432. 

MICHIGAN. 
(The  references  below  are  to  the  Session  Laws  of  1903,  chap.  232,  unless  otherwise  stated.) 

1.  Statutes  under  w^hich  Business  Corporations  may  incorporate. — 

The  business  Corporation  Act  of  Michigan  is  found  in  the  Session  Laws  of 
1903,  chap.  2-'5"2.  Special  acts  are  provided  for  banking,  insurance,  and  rail- 
way companies.  Under  the  act  referred  to  above,  corporations  may  be  organ- 
ized for  any  lawful  purpose.  Special  provision  is  however  made  for  mining 
corporations.     (See  Laws  of  190:3,  chaps.  130,  233,  214.) 

2.  Incorporators.  —  Three  or  more  persons  may  incorporate.  There  are 
no  residential  lequirements  (Laws  of  l!((i;!.  chap.  232,  sec.  1). 

3.  Contents  of  the  Articles  of  Association.  —  The  articles  of  associa- 
tion should  contain  : 

a.  Name.  — Similarity  of  names  among  domestic  corporations  is  forbidden 
(Laws  of  1903,  chap.  232,  sec.  2). 

h.  Purpoxes.  —  A  company  may  incorporate  and  carry  on  manufacturing 
or  mercantile  busine.s8or  any  union  of  the  two,  or  for  buying,  selling,  or  breed- 
ing live  stock,  or  for  engaging  in  maritime  commerce  or  navigation;  or  for 
purchasing,  holding,  or  dealing  in  real  estate  ;  or  for  conducting  warehouses 
ami  storage  business,  or  for  erecting  and  owning  buildings,  or  for  the  produc- 
tion and  supplying  of  gas  and  electricity  ;  or  for  printing,  publishing,  and 
liook-inaking,  or  for  carrying  on  any  other  lawful  business  except  such  as  is 
excludcid  by  sec.  36  of  the  act,  but  a  company  cannot  combine  any  two  lines 
of  husiness  except  manufacturing  and  nu-rcantilc  which  is  expressly  provided 
for  in  the  act  (Laws  of  1903,  cliap.  232,  sees.  1.2). 

c.  Lorntlon  of  Business.  —  Location  of  the  principal  place  or  places  where 
the  corporate  operations  are  to  V)0  conducted  (M  ). 

295 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

d.  Ciipitd!  Stock.  —  Tlie  total  authorized  capital  stock,  wliich  shall  not  be 
loss  than  $1,OUO  nor  more  than  $25,000,000  (Id. ;  see  also  Laws  of  1903,  chap. 

233). 

e.  XinnhtT  and  7'<ir  Value  of  Shares.  —  The  par  value  of  the  shares  must  be 

either  ?10  or  8100  (Id.). 

f.  The  Avwnnt  of  Stock  Suh^crii)lion.<t.  —  This  must  be  not  less  than  fifty 
per  cent  of  tlie  authorized  capital  stock  (Id.). 

(J.  Preferred  Slocl:.  —  If  preferred  stock  is  desired,  this  must  be  provided 
for  hi  the  articles,  and  an  exact  statement  of  the  terms  upon  which  the  common 
and  preferred  stock  are  created,  and  the  amount  of  each  subscribed  and  the 
amount  of  each  paid  in  (Id.). 

h.  Capital  Stock  paid  in.  —  Tlie  amount  of  capital  stock  paid  in  at  the 
time  of  executing  the  articles,  which  sliall  not  be  less  than  ten  per  cent  of  the 
authorized  capital,  and  not  less  than  !i?l,001),  except  where  the  capitalization 
is  >!2,000  or  under,  when  it  shall  be  twenty-five  per  cent  thereof.  Under  this 
section  the  manner  of  payment  of  the  capital  stock  is  required  to  be  set  forth 
in  detail  —  this  to  include  an  itemized  description  of  tlie  property  in  which 
the  stock  payment  is  made,  with  tlie  value  at  which  each  item  is  taken,  which 
valuation  shall  be  conclusive  in  the  absence  of  actual  fraud  (Id.). 

i.  Domiciliari/  OJice.  —  The  location  of  the  office  in  the  State  of  Michigan 
for  the  transaction  of  business  (Id.). 

/.  Duration.  —  The  corporate  existence,  which  shall  not  exceed  thirty 
years  (Id.). 

k.  Stockholders.  —  The  names  of  stockholders,  residences,  and  number  of 
shares  of  stock  subscribed  for  by  each  must  be  set  forth  (Id.). 

People  ex  rel  v.  Company,  111  Mich.  405  ;  69  N.  W.  6.^)3. 

4.  Statutory  Po-wers.  —  In  addition  to  the  statutory  enumeration  of  the 
common  law  powers  of  corporations,  tlie  act  gives  the  following  extraordinary 
powers:  The  corporation  may  conduct  its  business  in  whole  or  in  part,  if  it 
desires,  without  the  State  and  within  the  United  States.  Also  the  power  to 
issue  capital  stock  in  exchange  for  real  and  personal  property,  with  the  power 
to  make  such  capital  stock  full-paid  stock  and  not  liable  for  any  further  call, 
and  to  relieve  the  holders  thereof  from  any  stockholders'  liability  in  the  ab- 
sence of  actual  fraud  in  the  transaction.  To  vote  by  proxy,  to  forfeit  stock 
for  non-payment  of  assessments,  to  enforce  a  lien  for  non-payment  of  debts, 
to  cumulate  votes  in  the  election  of  directors,  to  issue  preferred  stock  (Laws 
of  1903,  chaps.  223,  232,  sees.  10,  11,  13,  II,  20;  see  also  Laws  of  1901,  chaps. 
176,  lb3). 

Eakins  v.  Company,  75  Mich.  568  ;  42  N.  W.  982 ;  Shadford  v.  Company,  130  Mich. 
300  ;  89  N.  W.  900. 

5.  Procuring  the  Charter. — The  articles  of  asso?iation  must  be  signed 
and  acknowledged  by  each  of  the  incorporators.  It  seems  to  be  contemplated 
by  the  statute  that  the  corporation  shall  be  organized  before  the  articles  are 
filed  in  any  State  or  local  office  (see  Organization  Meeting,  post,  sec.  10). 
The  statute  provides  that  before  any  corporation  organized  to  operate  in  the 
State  shall  commence  business  the  president  shall  cause  the  articles  of  associ- 
ation to  be  recorded  in  the  office  of  tlie  Secretary  of  State  and  in  the  office  of  the 
county  clerk  of  the  county  in  which  its  operations  are  to  be  carried  on.  If  it  is 
organized  to  operate  outside  of  the  State,  the  requirement  is  the  same,  except 
that  the  articles  must  then  be  filed  in  the  office  of  the  Secretary  of  State  and 
in  the  office  of  the  county  clerk  of  the  county  in  the  State  where  the  domicili- 

206 


SYNOPSIS-DIGEST   OF    INCORPORATION    ACTS. 

ary  office  is  located.     The  corporate  existence,  however,  commences  as  soon  as 
articles  are  subscribed  and  acknowledged  (Id.  sees.  2,  9). 

6.  Corporate  Indebtedness. — There  is  no  limit  prescribed  by  statute 
upon  the  creation  of  corporate  indebtedness. 

7.  Organization  Tax.  —  One-half  of  one  mill  on  each  dollar  of  authorized 
capital  stock,  that  is,  50  cents  on  each  tliousand  dollars,  with  a  nnuimum  fee  of 
$5  (Laws  of  1S91,  chap.  2  ;  Laws  of  189:5,  chap.  79  ;  C.  L.  of  1897,  sec.  8574). 

8.  Filing  and  Recording  Fees.  —  Bailing  articles  of  association  in  the 
Secretary  of  State's  office,  50  cents,  and  for  recording  same,  20  cents  per 
folio.  Cost  of  certified  copy  of  the  articles,  SI  if  copy  is  prepared  and 
submitted  for  certification.  For  filing  in  local  county  office,  50  cents,  and 
for  recording  the  same  20  cents  per  folio  (Id.  sec.  19). 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  articles  of  association  are  filed  and  recorded  in  the  office  of 
the  Secretary  of  State,  and  —  in  the  case  of  corporations  formed  to  carry  on 
its  business  witliin  the  State  —  in  the  office  of  the  clerk  of  the  county  in 
which  its  corporate  business  is  to  be  carried  on,  or  —  in  the  case  of  non- 
resident corporations  — in  the  office  of  the  county  clerk  of  the  county  where 
the  domiciliary  office  is  located  (Id.  sec.  9).  In  the  case  of  manufacturing, 
commercial  companies,  etc.,  before  commencing  business,  at  leasL  ten  per  cent 
of  the  capital  must  be  paid  in  and  fifty  per  cent  subscribed  (Laws  of  1903, 
chap.  2;32,  sec.  2). 

C.  V.  &  P.  Co.  !,■.  Secretary  of  State,  8  Detroit  Leg.  News,  795. 

10.  Organization  Meeting.  —  Any  two  of  the  stockholders  named  in 
the  articles  of  association  may  call  a  meeting  of  the  stockholders  for  the 
purpose  of  organization,  by  publishing  notice  thereof  in  the  manner  required 
by  statute.  This  notice  may  be  waived  in  writing  by  all  the  stockholders 
specifying  the  time  for  the  organization  meeting.  Tlie  organization  meeting 
should  be  held  within  the  State  in  order  to  avoid  any  possible  question  as 
to  the  legality  thereof  (Id.  sec.  3). 

11.  Meetings  of  Stockholders  and  Directors.  —  The  statute  specifically 
provides  that  corporations  may  establish  an  office  or  offices  for  the  tran.saction 
of  business  without  the  State  and  within  the  United  States,  and  to  hold  any 
meetings  of  the  stockholders  and  directors  tliereat.  The  place  must  be 
chosen  by  a  vote  of  a  majority  of  the  stockholders  at  a  meeting  duly  called 
for  that  purpose,  and  after  being  fixed  cannot  be  changed  within  one  year, 
and  must  be  certified  by  the  directors  of  the  corporation  to  the  Secretary 
of  State  within  two  months  from  the  time  such  office  is  located  (Id.  sec.  20). 

12.  Directors' Qualifications  and  Liabilities,  n.  Qualificalinns.  —  There 
must  be  at  least  three  directors  who  shall  be  stockholders.  TJiere  are  no 
residential  requirements  (Id.  sec.  4).  Cunmlative  voting  is  provided  for 
(Laws  of  1903,  chap.  224). 

Anderson  Carri.ige  Co.  v.  Pungs,  127  Mich.  543;  86  N.  W.  1040. 

b.  Liahilities.  —  The  directors  are  liable  to  creditors  for  failure  to  make 
annual  reports  a.s  provided  by  law,  for  declaration  of  dividends  when  the 
company  is  in.solvent,  or  when  the  payment  of  the  same  would  render 
i*^  insolvent,  an<l  are  jointly  and  severally  liable  to  the  extent  of  tliree  times 
the  amount  paid  on  the  stock  outstanding  in  their  name  for  violation  of 
any  provision  of  the  Business  Corporation  Act  (Id.  sees.    12,  22,  23) 

Baiikr.  I'ierson,  112  Mich.  410;  70  N.  \V.  901  ;  M.  I.  W.  C.  &  S.  Co.  i-.  MoKlier, 
114  Mich.  64;  72  N.  W.  117. 

297 


INCORPOKATFON    AND    ORGANIZATION    OP    CORPORATIONS. 

l:V  Stockholders'  Liabilities. —  If  tho  cajntal  stock  of  a  corporation  is 
witlulrawn  bi'toro  tlu'  payment  of  the  corporate  debts  for  which  such  stock 
woiikl  liavo  been  liable,  the  stockliolders  are  jointly  and  severally  liable  to 
any  creditor  to  the  amount  that  has  been  withdrawn.  Stockholders  are 
individually  liable  for  all  labor  performed  for  the  corporation.  They  are 
also  liable  to  the  amount  of  their  unpaid  stock  subscriptions  (Id.  sees.  14, 
21,  '29). 

A.  M.  &  G.  B.  Co.  c.  Bulkley,  107  Mich.  447 ;  65  N.  W.  291  ;  Graves  v.  Rrooks, 
117  Midi.  424;  75  N.  W.  932;  A.  S.  &  \V.  Co.  v.  Eddy,  1.30  Mich.  266;  89  N.  W. 
932  :  McBryaii  v.  Company,  130  Mich.  Ill  ;  89  N.  W.  683. 

1-1.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  him  signed  by  such  officers  as  the  by-laws  may  j)rescribe. 
The  par  value  of  shares  may  be  either  SIO  or  !?100  (Id.  sec.  2). 

1.3.  Preferred  Stock.  —  The  corporation  may  provide  in  its  articles  of 
association,  or  by  amendment  thereto,  for  the  issuance  of  preferred  stock, 
not  to  exceed  two-thirds  of  the  capital  stock  paid  in,  which  shall  be  subject  to 
redemption  at  par  at  a  certain  time  to  be  fixed  by  the  by-laws  of  the  corpora- 
tion and  to  be  expressed  in  the  certificate  therefor.  The  holders  of  preferred 
stock  shall  be  entitled  to  a  dividend  payable  quarterly,  half  yearly,  or  yearly, 
same  to  be  cunmlative,  and  not  to  exceed  eight  per  cent  per  annum.  Preferred 
stockholders  are  not  liable  for  the  debts  of  the  corporation  excepting  debts 
for  labor.  Preferred  stockholders  shall  have  voting"  power  except  when  other- 
wise provided  in  the  articles  of  association  or  amendments  thereto.  The 
right  to  vote  is  also  given  under  certain  other  conditions  (Id.  sec.  35). 

16.  Payment  of  Capital  Stock.  —  The  statutes  of  INIichigan  are  peculiar 
with  respect  to  the  manner  of  the  payment  of  capital  stock.  Such  stock 
may  be  paid  for  either  in  cash  or  in  real  or  personal  property.  If  paid  in 
property,  an  itemized  description  thereof  must  be  inserted  in  the  articles  of 
association,  together  with  the  valuation  of  each  item  taken,  and  this  valuation 
is  conclusive  in  the  absence  of  actual  fraud  (Laws  of  1903,  chap.  232,  sees. 
2,  14). 

17.  Books.  —  Books  containing  accounts  of  the  company  must  be  kept  at 
the  office  of  the  treasurer  of  the  corporation  within  the  State  for  the  inspection 
of  stockholders  (Id.  sec.  15).  Corporations  having  their  principal  place  of 
business  within  the  State  are  required  to  keep  their  stock  transfer  book  at 
fluch  office. 

18.  OflBce  and  Agent.  —  Every  corporation  must  maintain  an  office 
within  the  State  and  an  agent  to  receive  process.  Such  office  cannot  be 
changed  within  one  year  (Laws  of  1903,  chap.  232,  sec.  2). 

19.  Reports. —  Annual  reports  must  be  made  in  January  or  February 
stating  condition  of  stock;  amount  of  capital  invested  in  real  or  personal 
estate  and  actual  value;  amounts  of  debts  and  credits  ;  names  and  addresses 
of  the  stockholders,  and  number  of  shares  owned  by  each.  Duplicates  of  this 
report  must  be  filed  with  the  Secretary  of  State,  who  later  on  files  one  with 
the  county  clerk  of  the  county  where  the  principal  business  is  carried  on 
(Id.  sec.  12). 

20.  Anti-Trust  Statute.  —  Under  the  Act  of  March  3,  1899,  all  trusts  or 
combinations  intended  to  prevent  free  competition  in  business  are  prohibited 
(Stat.,  sees.  9351  j-9354  p;  Laws  of  1899,  chap.  255). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  for  entering  illegal  trusts  or  combines,  for  attempting  to  act  aa  a 

2tJS 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

corporation  when  not  legally  incorporated,  or  for  misuser  or  non-user  (Stat., 
sees.  8018,  8657,  935-i  m). 

22.  Ameudmeuts.  — The  articles  of  association  may,  at  any  meeting  duly 
called  for  that  purpose  by  a  resolution  adopted  by  a  vote  of  two-thirds  in 
interest  of  its  capital  stock,  amend  its  articles  of  association  in  any  manner 
desired  not  inconsistent  with  the  provisions  of  the  Business  Corporation  Act. 
To  render  such  amendment  effective  a  copy  of  the  resolution  signed  by  the 
president  and  secretary  must  be  recorded  in  the  same  manner  as  is  provided 
for  original  articles  of  association.  Special  provisions  are  made  as  to  the 
manner  in  which  the  capital  stock  may  be  increased  or  decreased.  Also 
special  provisions  exist  for  changing  the  place  of  business  of  the  corporation 
from  one  place  to  another  (Id.  sees.  2,  17,  18). 

2o.  Extension  of  Corporate  Existence.  —  At  any  meeting  called  for 
that  purpose  to  be  held  within  one  year  ininiediately  preceding  the  date  of  the 
termination  of  the  corporate  existence  as  fixed  by  the  articles  of  association, 
the  corporation  may  by  a  vote  of  two-thirds  of  its  capital  stock  direct  the  con- 
tinuance of  the  corporate  existence  for  a  further  term  not  exceeding  thirty 
years.  After  the  adoption  of  this  resolution,  the  president  and  secretary  sliall 
make,  sign,  and  acknowledge  articles  of  association  as  in  the  case  of  the  new 
corporation,  to  whicli  shall  be  appended  a  copy  of  such  resolution  verified  by 
the  oath  of  the  secretary,  which  shall  be  filed  and  recorded  as  in  the  case  of  a 
new  coriioration   (Id.  sec.  33). 

24.  Dissolution.  —  Corporations  may  be  dissolved  only  upon  application 
to  the  courts  (Stat.,  sees.  4101  b,  4161  d  7-4164  inclusive,  8174,  8211  a). 

2').  Foreign  Corporations.  —  Foreign  corporations  must  file  certified  copy 
of  their  articles  with  the  Secretary  of  State  and  evidence  of  appointment  of 
agent  to  receive  process.  Must  pay  franchise  fee  of  one-half  of  one  mill  on 
each  dollar  to  be  determined  by  the  Secretary  of  State  upon  the  proportion  of 
capital  stock  represented  by  its  business  in  Michigan,  but  which  fee  shall 
never  be  less  than  $2b  (Laws  of  1901,  chap.  206,  as  amended  by  Laws  of 
1903,  chap.  34).  At  the  time  articles  are  filed  the  corporation  mu.st  make 
and  file  a  statement  with  the  Secretary  duly  sworn  to  by  at  least  two  officers 
of  the  corporation  setting  forth  the  location  of  its  offices  in  Michigan ;  names 
and  addresses  of  the  officers  and  agents  in  charge  of  its  business  in  ^Michigan, 
value  of  property  owned  and  used  by  the  company;  aggregate  amount  of 
business  transacted  by  the  company  therein  and  the  capital  stock  of  such  cor- 
poration invested  in  Michigan.  Foreign  corporations  must  also  file  an  annual 
report  with  the  auditor-general  duly  sworn  to  by  its  president  or  other  officer 
(C.  L.  of  isOtJ,  sec.  7106).  The  anti-trust  act  applies  to  foreign  corporations 
as  well  as  domestic.     (See  Laws  of  1899,  chap.  205,  sec.  12.) 

People  V.  Ilawkiii.'^,  106  Mich.  479;  64  N.  W.  736;  Rough  v.  Brcitunpr,  117  Mich. 
48;  75  N.  \V.  147;  Wilcox  Cordage  Co.  v.  Mosher,  114  Mich.  64  ;  72  N.  VV.  117. 


MINNESOTA. 

(The  references  cited  below  arc  to  the  General  Statutes  of  1894  unless  othenvisc  stated.) 

1.  Statute  under  w^hich  Business  Corporations  may  incorporate. — 
The  Business  Cor[)oration  Act  of  .Minnesota  i.s  found  in  the  (Jcneral  Slatutes 
of  that  State  (1894),  Title  2,  chap.  34,  sees.  2593-2837,  3391-3436,  588!»-5911. 
Special  attention  is  called  to  the  fact  that  Title  2,  chap.  34,  really  embraces 

21)9 


INCOnPORATION  AND    ORfiANIZATION    OF    COUPOUATIONS. 

three  separate  incorporation  acts, — ono  being  a  general  act  and  tlie  others 
being  applicable  to  mining  and  niannfactnring  companies.  Special  acts  are 
provided  for  banking,  bnilding  and  loan,  electric,  insurance,  plank  roads, 
tin-npike,  railway,  safe  deposit  anil  trust,  bridge,  telegraph,  telephone,  water 
and  eleemosynary  corporations.     (See  sees.  '2TJi,  2805.) 

'2.  Incorporators. —  Any  number  of  persons  not  less  thau  three.  There 
are  no  residential  requirements  (sees.  2794,  2805,  2827). 

State  r.  Crilchett,  37  Miuu.  13  ;  32  N.  W.  787. 

3.  Contents  of  the  Articles  of  Incorporation.  —  The  articles  must  set 
forth  : 

a.  Corporate  Name,  —  Similarity  of  names  among  domestic  corporations  is 
forbidden. 

b.  Nature  of  the  Business.  —  The  Secretary  of  State  permits  the  insertion 
of  any  number  of  purposes  in  the  articles  not  covered  by  special  act. 

c.  Principal  Place  of  Business.  —  The  location  of  the  principal  place  for 
the  transaction  of  the  corporate  business  must  be  set  forth. 

d.  Duration.  —  Time  of  the  commencement  and  period  of  existence,  which 
cannot  exceed  thirty  years  (sees.  2802,  2826). 

e.  Capital  Stock.  —  The  amount  of  ca])ital  stock  and  how  paid  in.  The 
authorized  capital  cannot  be  less  than  S10,000  (sees.  2797,  2830  ;  Laws  of 
1901,  chap.  347). 

/.  Corporate  Indebtedness.  —  The  highest  amount  of  indebtedness  or  liabil- 
ity which  the  corporation  shall  at  any  time  incur. 

g.  Incorporators.  —  The  names  and  residences  of  the  incorporators  must 
be  set  forth. 

h.  Directors.  —  The  names  and  residences  of  the  first  board  of  directors 
and  in  what  officers  the  government  of  the  corporation  and  the  management 
of  its  affairs  shall  be  vested,  and  when  the  same  shall  be  elected. 

i.  The  Par  Value  of  the  Shares.  —  The  number  and  par  value  of  the  shares 
of  the  capital  stock.  This  must  not  be  less  than  $1  nor  more  than  SI 00  (sees. 
2594,  2796  ;  Laws  of  1897,  chap.  249;  Laws  of  1901,  chap.  99;  sec.  2797,  as 
amended  by  Laws  of  1901,  chap.  347).  Special  provision  is  made  with  refer- 
ence to  articles  of  incorporation  of  mining  and  manufacturing  corporations 
(sees.  2827,  2828). 

State  V.  Company,  40  Minn.  213;  41  N.  W.  1020. 

4.  Statutory  Powers  — In  addition  to  the  statutory  enumeration  of  the 
common  law  powers  of  corporations,  the  act  gives  the  following  extraordinary 
powers:  The  right  to  enforce  a  lien  upon  the  stock  of  its  members  for  all 
debts  due  from  them  to  the  corporation  ;  the  power  to  hold  real  and  personal 
property  as  shall  be  necessary  for  the  business  of  the  corporation,  or  such  as 
may  be  taken  in  payment  of  or  security  for  del)t3.  Express  power  is  conferred 
upon  the  directors  to  meet  without  the  State,  and  the  corporation  is  em- 
powered to  establish  offices  without  the  State  for  the  transaction  of  its  busi- 
ness. If  a  majority  of  the  stockholders  shall  so  elect,  the  corporation  may 
take,  acquire,  and  hold  stock  in  other  corporations.  Also  to  vote  by  proxy 
(sees.  2794,  2795,  2798,  2799,  2816,  2817,  2833,  2834,  2835,  3412).  Also  to 
issue  preferred  stock  and  to  forfeit  stock  for  non-payment  of  assessment  (sees. 
3414,  3415).     Also  to  classify  directors  (sec.  3407). 

Blien  v.  Rand,  77  Minn.  110;  79  N.  W.  606;  N.  T.  E.  Co.  r.  Company,  76  Minn. 
334;  79  N.  W.  315. 
300 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

5.  Procuring  the  Charter.  —  The  articles  should  be  signed  and  acknowl- 
edged by  each  of  the  incorporators.  The  articles  must  then  be  published  in  a 
legal  newspaper  published  at  the  capitol  of  the  State  or  at  the  county  where 
the  corporation  is  organized.  Two  publications  are  sufficient.  Upon  filing 
an  affidavit  of  proof  of  such  publication  in  the  office  of  the  Secretary  of  State 
the  persons  named  in  such  articles  thereupon  become  a  corporation.  The 
articles  of  incorporation  must  be  recorded  in  the  office  of  the  register  of  deeds 
of  the  county  where  the  principal  place  of  business  is  to  be  located  as  well  as 
in  the  office  of  the  Secretary  of  State.  In  the  case  of  niiiiing  and  manufactur- 
ing corporations  the  articles  are  required  to  be  executed  in  duplicate,  one  of 
which  is  deposited  for  record  in  the  office  of  the  register  of  deeds  in  the  county 
where  the  corporation  shall  establish  its  principal  office,  and  the  other  with 
the  Secretary  of  State,  and  upon  being  so  deposited  the  corporation  is  deemed 
to  exist  for  the  purposes  specified  in  its  articles.  There  must  be  filed  with 
the  articles  with  the  Secretary  of  State  a  duplicate  receipt  of  the  State 
Treasurer  showing  the  payment  of  the  organization  tax  required  by  law. 
This  provision  does  not  apply  to  any  manufacturing  corporation  whose  articles 
provide  that  its  functions  shall  be  limited  to  manufacturing  and  to  business 
essential  thereto,  or  to  mining  any  stone  quarry,  or  the  quarrying,  manufactur- 
ing, or  marketing  of  any  kind  of  stone,  or  for  raising  or  improving  live  stock, 
or  for  cultivating  or  improving  farms,  gardens  or  horticultural  lands,  growing 
sugar  beets  or  for  canning  fruits  or  vegetables,  or  to  local  telephone  companies 
connecting  towns  or  villages  of  less  than  two  thousand  inhabitants  (sees. 
2.yj:3,  2'iQb,  279G,  2813,  2829 ;  Laws  of  1901,  chap.  99  ;  Laws  of  190:5,  chap.  300). 
The  Secretary  of  State  issues  a  certificate  of  incorporation  in  the  form  pro- 
vided by  statute  (sec.  3314). 

Fiimegau  v.  Noereuberg,  52  Minn.  239;  53  N.  W.  1150. 

6.  Corporate  Indebtedness.  —  There  is  no  limit  upon  the  creation  of 
corporate  indebtedness,  save  as  to  certain  classes  of  corporations  :  to  wit,  those 
empowered  to  take  private  property  for  public  uses  (sec.  2722). 

7.  Organization  Tax.  —  Fifty  dollars  for  the  first  fifty  thousand  dollars 
of  the  capital  stock  and  an  additional  five  dollars  for  every  additional  ten 
tliousand  dollars  of  its  capital  stock.  Manufacturing  corporations,  when 
their  articles  confine  their  business  exclusively  to  manufactuiing,  are  not  re- 
quired to  pay  incorporation  fees  (Laws  of  1901,  chap.  206). 

8.  Filing  and  Recording  Fees.  —  Filing  fees  in  the  office  of  the  Secretary 
of  State,  lo  cents  per  folio.  Cost  of  certified  copy  of  articles  of  incorporation, 
50  cents  per  folio.  For  issuing  certificate  of  incorporation,  .ijl.  Filing  affida- 
vits and  proofs  of  publication,  free.  Filing  and  recording  fees  in  local  county 
offices  average  about  83.  Cost  of  publishing  articles,  about  815.  A  dis- 
count of  usually  50  per  cent  on  this  amount  can  bo  obtained  by  the  attorneys. 
Cost  of  filing  certificate  preliminary  to  the  commencement  of  business  in  the 
office  of  the  Secretary  of  State  and  with  the  register  of  deeds,  about  $1. 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  article's  of  incorporation  are  fileil  and  recorded  in  the  office  of  the 
Secretary  of  State  and  in  the  office  of  the  register  of  deeds  of  the  county  where 
the  principal  jilace  of  business  is  located,  and  as  soon  as  tlic  articles  an-  jmb- 
lished  as  required  by  law,  and  an  affidavit  in  proof  thereof  filed  in  the  office 
of  the  Secretary  of  State  (sees.  2591,  2790). 

10.  Organization  Meeting.  —  Organization  meeting  must  l)o  held  within 
the  State  in  the  absence  of  any  statute  expressly  authorizing  the  holding  of 

301 


INCOnrORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

such  niocting  outsi.le  of  tlic  State.      (See,  however,  sees.  2808,  2833,  3107, 

310S.) 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders  as  well 
a,s  ilirootors  inav  nuH't  and  transact  business  witliout  the  State  if  the  by-laws 
so  provide;  otherwise  the  meetings  must  be  held  within  the  State  (sees.  2808, 
283:5,  3407,  3108  ;  see  also  Laws  of  1903.  chap.  152). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  at  k-ast  tliree  directors  and  not  more  than  fifteen.  There  are  no  resi- 
dential requirements.  The  board  may  by  a  resolution  divide  the  directors 
into  three  classes,  one-third  to  be  elected  annually  (sees.  2809,  2831,  3407). 

b.  Liabilities.  —  Directors  are  liable  for  the  declaration  and  payment  of 
unlawful  dividends.  They  are  also  liable  if  they  suffer  the  corporate  funds 
or  property  to  be  wasted  or  lost  through  gross  negligence  or  inattention  to 
duty.  Directors  and  officers  may  be  removed  by  the  district  court  of  the 
county  in  which  is  located  the  principal  business  of  the  corporation,  or  be 
suspended  upon  proof  of  abuse  of  trust  or  gross  misconduct  (sees.  2793,  2800, 
2822,  2823,  5895,  0(i99,  6700,  G7G4,  G765). 

13.  Stockholders'  Liabilities.  —  Stockholders  in  all  classes  of  corpora- 
tions are  liable  in  any  event  to  the  amount  of  stock  subscribed  by  them  and 
unpaid.  Stockholders  of  all  ordinary  business  corporations  that  may  be  or- 
ganized under  the  General  Act,  except  those  organized  to  carry  on  exclusively 
a  manufacturing  or  mining  business,  are  liable  to  the  amount  of  stock  held 
or  owned  by  tliHui.  This  is  a  constitutional  liability  not  requiring  any  statute 
to  put  it  in  effect,  the  Supreme  Court  having  held  it  to  be  self-executing. 
Stockholders  in  corporations  organized  to  carry  on  an  exclusively  manufac- 
turing or  mechanical  business  are  only  liable  to  the  extent  of  their  unpaid  stock 
subscriptions  (Cons.,  Art.  X.  sees.  3,  2600).  Stockholders  are  also  liable 
to  the  extent  of  capital  illegally  withdrawn  from  the  corporation  and  received  by 
them  (sec.  2822).  They  are  also  liable  for  a  failure  on  the  part  of  the  corpora- 
tion to  comply  substantially  with  the  provisions  with  reference  to  organization 
and  publicity  (sec.  2600). 

Wallace  v.  Company,  70  Minn.  321  ;  73  N.  W.  189;  Frost  v.  Company,  57  Minn. 
32.5  ;  59  N.  W.  308  ;  P.'  F.  Co.  v.  Company,  64  Minn.  386  ;  67  N.  W.  217  ;  Fanisworth 
V.  Robbins,  36  Minn.  369;  31  N.  W.  349;  S.  M.  Co.  v.  Company,  81  Miuu.  294;  84 
N.  W.  109. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  i.ssued  to  him  signed  by  such  officers  as  the  by-laws  may  prescribe 
(sec.  3416).  The  par  value  of  the  shares  may  be  any  amount  not  less  than 
SI  nor  more  than  iSlOO  (Laws  of  1901,  chap.  347;  .see  also  sec.  2830, 
where  par  value  of  shares  of  mining  and  manufacturing  companies  is  fixed 
at  not  less  than  810  and  not  more  than  f  100  each  ;  see  also  sec.  2806). 

15.  Preferred  Stock.  —  Corporations  may  by  their  original  articles  or  by 
amendment  thereto  provide  for  special,  preferred,  and  common  stock,  and  any 
corporation  may  without  changing  its  articles  of  incorporation  issue  its  capital 
stock  as  part  special  and  part  preferred  and  part  common,  or  part  common 
and  part  either  special  or  preferred,  by  direction  of  its  board  of  directors 
when  authorized  by  a  majority  of  the  stockholders  at  a  meeting  called  for 
that  purpose  (sec.  3415). 

16.  Payment  of  Capital  Stock.  —  Stock  is  payable  in  money  or  money's 
worth.  Stock  cannot  be  issued  for  a  less  amount  to  be  actually  paid  in  on 
each  share  than  the  par  value  of  the  shares  so  issued.     The  foregoing  pro- 

302 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

vision  does  not  apply  to  railroad,  navigation,  manufacturing  corporations  and 
corporations  organized  for  dealing  in  real  estate.  This  latter  class  are 
authorized  to  create,  issue,  and  dispose  of  such  amount  of  special,  preferred,  or 
full-paid  stock  as  the  directors  may  deem  advisable  (sec.  ;]415). 

17.  Books.  —  Books  of  account  shall  be  kept,  and  shall  at  all  reasonable 
times  be  open  to  inspection,  in  the  county  where  such  corporation  is  located  or 
at  the  office  of  the  treasurer  within  the  State  (sees.  25!»!),  2800,  2818,  342.0  e). 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  an  office  with- 
in the  State,  and  must  at  all  times  have  an  agent  within  the  State  upon  whom 
process  may  be  served  (sees.  2801,  2833,  3-107). 

19.  Reports.  —  Xo  reports  are  required  to  be  published.  The  directors 
are  however  i-equired  to  make  a  statement  of  the  accounts  of  the  corporation 
at  least  once  a  year  to  tiie  stockholders. 

20.  Anti- Trust  Statute.  —  Under  the  Act  of  April  10,  1901,  all  pools, 
trusts,  and  conspiracies  for  certain  unlawful  purposes  are  declared  illegal  (Laws 
of  1901,  chap.  194 ;  see  also  Laws  of  1899,  chap.  3.59). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  for  violation  of  law,  for  misuser  and  non-user  of  corporate  powers. 
It  may  also  be  forfeited  if  the  charter  was  procured  upon  some  fraudulent 
suggestion  or  the  concealment  of  material  facts  by  the  persons  incorporating 
or  some  of  them  or  with  their  knowledge  and  consent  (sec.  5G92).  The 
charter  may  be  forfeited  also  if  it  remains  insolvent  for  one  j'ear  or  for  one 
year  refu.ses  to  discharge  its  debts,  or  for  one  year  suspends  its  lawful  business 
(sec.  5899).     Also  for  violation  of  Anti-Trust  Acts. 

M.  C.  R.  Co.  V.  Melviii,  21  Miun.  339. 

22.  Amendments.  —  The  charter  may  be  amended  by  a  resolution  of  the 
board  of  directors  ratified  bj^  a  majority  of  the  stockholders  in  the  following 
respects  :  Changing  the  name  or  the  nature  of  the  business,  the  principal  ])lace 
of  transacting  the  same,  changing  the  amount  of  capital  stock  and  how  to  be 
paid  in,  the  amount  of  corporate  liability,  and  the  number  and  amount  of  the 
shares  of  the  capital  stock.  Also  the  number  of  directors  and  their  term  of 
office  and  th(!  manner  of  their  election.  The  amended  articles  are  required 
to  be  filed,  published,  and  recorded  in  the  same  manner  as  the  original  articles 
are  required  to  be  filed,  published,  and  recorded  (sees.  2595,  2738,  2803,  2804  ; 
Laws  of  1901,  chap.  245). 

23.  Extension  of  Corporate  Existence.  —  Corporations  may  renew  the 
term  of  their  corporate  existence  for  a  term  not  exceeding  the  original  period 
of  its  existence  by  adopting  a  resolution  expressing  such  renewal  by  a  two- 
thirds  vote  of  its  stockholders  at  a  meeting  duly  called  for  that  purpose 
and  by  filing  and  publishing  the  same  in  the  same  manner  as  is  provided  for 
original  articles  of  incorporation  (Laws  of  1901,  chap.  2o7  ;  Laws  of  1903, 
chap.  332). 

21.    Annual  License  Tax,  — There  i.s  no  annual  license  tax. 

25.  Dissolution. — Corjtorations  may  bt;  dissolved  upon  application  to 
the  courts  (sees.  3130,  31;').');   Laws  of  19(13,  chap.  331). 

20.  Foreign  Corporations.  -  Kvcry  foreign  corporation  bifore  filing 
business  within  the  State  must  file  in  the  office  of  the  Secretary  of  Slate  a 
copy  of  its  charter  or  articles  of  inc()ri)oration  duly  certified  and  authenticated. 
The  same  must  be  duly  certified  by  the  )>reMident,  secretary,  or  other  chief 
executive  officer  of  such  corporation,  and  the  corporate  seal  attached  thereto 

803 


INCOIirORATlON    AND    ORGANIZATION    OF    CORPORATIONS. 

(Laws  of  ISOO.  oliaps.  09,  70).     Foreign  corporations  are  taxed  the  same  as 
iloiucstio  corporations. 

State  t:  Company,  43   Minn.  17;   44  N.  W.  1032;    Ileilcinan  Co.  v.  rcimeisl,  85 
Minn.  121  ;  88  N.  W.  441. 

MISSISSIPPI. 

(The  references  cited  below  are  to  chap.  25  of  the  Annotated  Code  of  1892,  unless  other- 
wise stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. 

Tlie  Business  Corporation  Act  of  Mississippi  is  found  in  the  Annotated 

Code  of  1892,  chap.   25,  sees.  832-860  inclusive.     Special  acts  are  provided 
for  railway  and  insurance  corporations. 

2.  Incorporators.  —  There  must  be  at  least  two  incorporators.  There 
are  no  residential  recpiireinents  (sec.  8:33). 

3.  Contents  of  the  Charter.  —  The  charter  must  contain  : 

a.  Purposes.  —  Any  number  of  purposes  not  including  those  for  which 
corporations  can  be  organized  only  under  special  acts  may  be  inserted. 

b.  Incorporators.  —  The  names  of  the  incorporators  must  be  inserted. 

c.  Name.  —  Similarity  of  natnes  is  not  forbidden. 

d.  Corporate  Powers.  —  The  powers  to  be  exercised  must  be  set  forth. 

e.  Duration.  —  This  cannot  exceed  fifty  years. 

/.  Capital  Stock.  —  There  is  no  maxinmm  or  minimum  amount  of  capital 
stock  fixed  by  law  for  corporations.  There  is  an  implied  limit  by  reason  of 
the  provision  that  no  corporation,  except  manufacturing  companies  and  banks, 
may  hold  real  and  personal  estate  exceeding  ^250,000  in  amount.  Manu- 
facturing companies  and  banks  may  purchase  and  hold  property  to  the  amount 
of  $1,000,000. 

g.  Any  provisions  that  may  be  desired  for  the  regulation  of  the  internal 
affairs  of  tiie  corporation  (sec.  833). 

4.  Statutory  Powers.  —  The  act  enumerates  the  common  law  powers 
of  corporations.  In  addition  thereto  it  limits,  except  in  the  case  of  manu- 
facturing companies  and  banks,  the  amount  of  real  and  personal  property 
necessary  and  proper  for  its  purposes  to  $250,000  in  amount.  Corporations 
are  forbidden  to  own  or  purchase  the  capital  stock  of  other  corporations 
or  to  acquire  the  franchise,  plant,  or  equipments  of  other  corporations.  Cor- 
porations are  expressly  given  power  to  execute  bonds  in  suits  in  which 
the  corporation  is  interested  (sec  836).  Voting  by  proxy  is  permitted; 
also  forfeiture  of  stock  for  non-payment  of  assessments  (sees.  836,  837,  838, 
843).     May  cumulate  votes  in  election  of  directors  (sec.  837). 

Greenville  Compress  &  Warehouse  Co.  v.  Company,  70  Miss.  663 ;   13  So.  879. 

5.  Procuring  the  Charter.  —  The  charter  must  be  si-n<'d  and  acknowl- 
edged by  each  of  the  incorporators.  It  nmst  then  be  published  for  three 
consecutive  weeks  in  a  newspaper  published  at  the  domicile  of  the  corpora- 
tion. After  publication  it  must  be  submitted  for  approval  to  the  governor, 
who  is  required  to  take  advice  of  the  Attorney-General  as  to  the  constitii- 
tionality  and  legality  of  the  provisions  of  the  charter.  If  the  charter  is 
approved,  the  governor  so  endorses  such  approval  thereon,  and  the  Secretary 
of  State  shall  affix  the  State  seal  thereto.  Upon  the  payment  of  the  organiza- 
tion tax  and  upon  recording  the  charter  in  the  office  of  the  Secretary  of  State 
the  corporate  existence  commences.     The  law  provides  that  it  shall  not  be 

304 


SYNOPSIS -DIG  EST   OF   INCORPORATION   ACTS. 

a  defence  to  any  suit  against  the  corporation  tliat  there  was  a  defect  or 
informality  in  the  organization  thereof  (sees.  833,  835).  The  charter  must 
be  recorded  also  in  the  office  of  the  clerk  of  the  chancery  court  of  the 
county  in  which  the  corporation  does  business.  Colhiteral  inquiry  into  the 
legality  of  corporate  existence  is  forbidden  by  statute  (sees.  833,  835,  8il). 

6.  Corporate  Indebtedness.  —  ^Manufacturing  and  trading  companies 
are  not  permitted  to  contract  debts  to  exceed  the  amount  of  their  capital 
stock  paid  in.  No  loan  of  money  can  be  made  by  the  corporation  to  a 
stockholder  (sees.  851,  853). 

Fargasou  v.  Company,  78  Miss.  65  ;  27  So.  877. 

7.  Organization  Tax.  —  Capital  stock  not  exceeding  ^10,000,  $20;  be- 
tween 810,000,  and  §30,000,  S40;  between  S30,000,  and  650,000,  §60;  exceed- 
ing S50,000,  one  tenth  of  one  per  cent,  but  no  fee  to  exceed  §250  (Laws  of 
1900,  chap.  45). 

8.  Filing  and  Recording  Fees.  —  There  is  no  filing  or  recording  fee 
other  than  the  organization  tax  to  be  paid  to  the  Secretary  of  State.  For 
certified  copy  of  a  domestic  charter,  §10  (Laws  of  1900,  chap.  45).  Publication 
fee  about  §10. 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  the  charter  is  duly  executed,  published,  and  approved  by  the  governor, 
the  organization  tax  paid,'  and  the  charter  recorded  in  the  office  of  the 
Secretary  of  State  and  with  the  clerk  of  the  chancery  court  of  the  county  in 
which  the  corporation  does  business  (sees.  833-835  inclusive). 

10.  Organization  Meeting. — The  organization  meeting  must  be  held 
within  the  State.  Unless  the  incorporators  sign  an  agreement  fixing  the 
time  and  place  for  the  organization  meeting  of  the  corporation,  a  notice 
signed  by  one  or  more  persons  named  in  the  charter  must  be  published  in 
some  business  newspaper  for  at  least  ten  days  before  the  time  appointed 
for  such  meeting.  At  this  meeting  the  by-laws  must  be  adopted  and  the 
board  of  directors  chosen.  Immediately  after  the  adjournment  of  the  organi- 
zation meeting  the  board  of  directors  elected  thereat  should  meet  and  elect 
such  officers  as  may  be  provided  for  in  the  by-laws  (sec.  836). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meet- 
ings must  be  held  within  the  State.  Directors'  meetings  may  be  held  without 
the  State  if  the  by-laws  so  provide  (sec.  837). 

Thompson  v.  Company,  68  Miss.  423 ;   9  So.  821. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  The 
corporation  may  have  any  number  of  diicctors  desired.  There  are  no  resi- 
dential requirements.  No  person  can  serve  on  the  board  of  directors  who  is 
engaged  or  interested  in  a  competing  business  without  the  consent  of  a 
majority  in  interest  of  the  stockholders  tiiejeof  (.sec.   837). 

h.  LiahUiiies.  —  Directors  are  jointly  and  severally  liable  for  the  payment 
of  dividends  when  the  comi)any  is  insolvent  or  wiien  such  payment  would 
render  it  insolvent.  Directors  are  also  liable  for  ilii'gal  witiidrawal  of  capital 
stock.  Officers  and  directors  are  jointly  and  severally  liable  for  permitting 
the  loan  of  money  to  stockholders.  They  are  also  liable  in  ca.se  debts  aro 
contracted  in  excess  of  the  amount  ot  capital  stock  paid  in  (sees.  851, 
852,   853). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  in  any  event 
to  the  amount  of  stf)ck  subscribed  by  thefji  and  unpaid  (sees.  H41,  8.')i)). 

Scott  V.  Windham,  73  Mi-ss.  76;  16  So.  206. 

20  30.> 


INCORrOUATIOX    AND    ORGANIZATION   OF   CORPORATIONS. 

11.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  i.s.>;ucil  to  liiiii  .signed  by  such  ollicers  as  the  by-laws  may  prescribe. 
Tlio  par  value  of  .sharos  may  be  any  amount. 

\o.  Preferred  Stock.  —  The  act  does  not  provide  in  terms  for  the  is- 
suance vi  pri'fi'rred  stock. 

Ui.  Payment  of  Capital  Stock.  —  The  statute  seems  to  contemplate 
that  stoc-k  must  be  paid  for  either  in  money  or  money's  worth.  The  act 
provides  that  a  note,  obligation,  or  security  of  any  kind  given  or  transferred 
by  any  subscriber  for  stock  shall  not  be  considered,  taken,  or  held  as  payment 
of  any  part  of  the  capital  stock  of  the  company  (sees.  81-4,  850). 

Fargasou  v.  Company,  78  Miss.  65 ;  27  So.  877. 

17.  Books.  —  There  are  no  statutory  regulations  concerning  books. 

18.  Office  and  Agent.  —  The  statute  by  implication  would  seem  to 
require  the  maintenance  of  a  domiciliary  office  within  the  State. 

19.  Reports.  —  No  reports  to  State  officials  are  required. 

20.  Auti- Trust  Statute.  —  All  pools,  trusts,  or  combinations  for  certain 
designated  purposes  are  declared  illegal  (chap.  88,  Laws  of  1900). 

Woodberry  v.  McCkirg,  78  Miss.  831  ;  29  So.  514. 

:21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  for  entering  unlawful  trusts  or  combines  or  for  misuse  or  abuse  of 
its  powers  (Act  of  March  12,  1900,  sees.  3520-3.729;  see  also  sec.  838). 

22.  Amendments.  —  Provisions  for  the  amendment  of  charters  are  the 
same  as  govern  with  respect  to  the  issuance  of  the  charter  in  the  first  instance 
(sec.  831). 

23.  Extension  of  Corporate  Existence.  —  The  act  refers  to  renewals  of 
charters,  but  contains  no  express  provision  with  reference  thereto  (sec.  834). 

21.  Dissolution.  —  Corporations  may  be  dissolved  upon  application  to  the 
courts  (sees.  847,  848). 

25.  Foreign  Corporations.  —  Every  foreign  corporation  before  doing  busi- 
ness within  the  State  must  file  in  the  office  of  the  Secretary  of  State  a  copy  of 
its  charter  or  articles  of  incorporation  duly  certified  and  authenticated.  The 
same  must  be  duly  certified  by  the  president,  secretary,  or  other  chief  execu- 
tive officer  of  such  corporation,  and  the  corporate  seal  attached  thereto.  Fee 
of  Secretary  of  State  for  filing  charter,  S15  (Laws  of  1900,  chap.  45;  sec.  849). 

Williams  v.  Bank  of  Commerce,  71  Miss.  858;  16  So.  238. 


MISSOURI. 

(The  references  cited  below  are  to  the  Revised  Statutes  of  1899  unless  otherwise  stated.) 

1.  Statutes  under  w^hich  Business  Corporations  may  incorporate.  — 

The  Busine.s.s  Corporation  Act  of  Missouri  is  found  in  the  Revised  Statutes  of 
18{i9,  sees.  9J3-1541  inclusive.  Special  acts  are  provided  for  banking,  bond, 
investment,  booming  and  rafting,  savings  and  loan,  building,  railway,  street 
railway,  telegraph,  telephone,  and  trust  companies. 

2.  Incorporators.  —  Any  number  not  less  than  three.  There  are  no  res- 
idential requirements  (sec.  1312,  as  amended  by  the  Session  Laws  of  1901, 
page  91). 

306 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

3.  Contents  of  the  Articles  of  Incorporation.  —  The  articles  must  set 
f  ortli : 

a.  Name. —  Similarity  of  names  is  forbidden.  When  the  name  of  a  person 
or  firm  is  assumed,  it  must  designate  the  nature  of  the  business  to  be 
carried  on  and  end  with  "company  "  or  "corporation"  (sees.  959,  1312). 

b.  Domiciliary  Office.  —  The  name  of  the  city  or  town  in  the  county  in 
which  the  corporation  is  to  be  located  (sec.  1312). 

c.  Capital  Stock.  —  The  amount  of  capital  stock,  the  number  of  shares 
into  which  it  is  to  be  divided,  and  the  par  value  thereof,  together  with  a  state- 
ment that  the  same  has  been  bona  Jide  subscribed  and  one-half  thereof  actu- 
ally paid  up  in  lawful  money  of  the  United  States,  and  in  the  custody  of  the 
persons  named  as  the  first  board  of  directors.  Capital  stock  cannot  be  less 
than  §2,000  nor  more  than  §10,000,000.  The  par  value  of  the  shares  may  be 
any  amount  (sees.  1312,  1320;  Laws  of  1903,  p.  124). 

d.  Stockholders.  —  The  names  and  places  of  residence  of  the  stockholders 
and  the  number  of  shares  subscribed  by  each  (sec.  1312). 

e.  Board  of  Directors.  —  Number  of  directors  and  names  of  the  board  for 
the  first  year.  There  must  be  not  less  than  three  nor  more  than  thirteen. 
Three  of  these  must  be  citizens  and  residents  of  the  State,  and  all  must  be 
stockholders  (sees.  973,  1022,  1312,  1320;  Laws  of  1903,  p.  124). 

/.  Duration.  —  The  number  of  years  the  corporation  is  to  continue,  which 
must  not  exceed  fifty  (50)  years  (sec.  1312;  Laws  of  1903,  p.  124). 

(J.  Purposes.  —  The  statute  specifies  eleven  classes  of  corporations  which 
may  be  organized  under  the  General  Act  (sec.  1319). 

/(.  Preferred  Stock.  —  If  preferred  stock  is  desired,  the  articles  must  set 
out  the  amount  thereof,  the  number  of  shares  thereof,  the  names  of  the  sub- 
scribers therefor,  the  number  of  shares  subscribed  by  each  person,  and  the 
preferences,  priorities,  qualifications,  and  character  thereof  as  provided  in  sec. 
1332  of  the  Eevised  Statutes  of  Missouri,  1899,  as  amended  Laws  of  1901, 
p.  91. 

State  v.  McGrath,  92  Mo.  355;  5  S.  W.  29. 

4.  Statutory  Powers.  —  The  Missouri  statutes  enumerate  the  common 
law  powers  of  corporations,  and  also  confer  the  following  additional  powers  ; 
Termitting  the  use  of  proxies;  authorizing  cumulative  voting  for  directors; 
allowing  directors  to  forfeit  stock  for  non-payment  of  assessment;  permitting 
the  classification  of  directors;  allowing  the  issuance  of  preferred  stock,  and  the 
issuance  of  stock  for  services  or  property  (.sees.  953,  901,  962,  971,  1322). 
Corp<^rations  engaged  in  a  similar  line  of  business  may  consolidate  (sec. 
1331).  IJonds  may  l)e  issued  and  afterwards  converted  into  stock  if  desired 
(si-c.  1337;  .see  also  Laws  of  1903,  pp.  Ill,  121). 

5.  Procuring  the  Charter.  —  The  articles  must  be  signed  and  acknowl- 
edged by  the  incorporators.  They  must  then  be  recorded  in  the  office  of 
the  recorder  of  deeds  of  the  county  or  city  wln-re  the  corporation  is  to  be 
locat<!d.  A  certified  copy  of  the  articles  must  then  be  filed  with  the  Secre- 
tary of  State,  and  the  corjiorate  existence  commences  from  the  time  of  the 
filing  of  such  copy.  A  ceitificate  by  tlie  Secretary  of  State  that  such  corpo- 
ration has  been  duly  organized  is  evidence  of  the  corporate  existence  of  the 
corporation.  A  certified  copy  of  such  certificate  must  be  filed  and  reconled 
in  the  office  of  the  recorder  of  deeds  of  the  county  in  which  the  corporation 
is  organized.  Before  the  articles  can  be  filed  in  the  office  of  thi;  .S'cn-tary  of 
State  the   organization  tax  must  be  paid  to  the   State,  and  a  duplicate  re- 

307 


INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS. 

ceipt  of  the  State  Tioasuivr  showing  the  paj'ment  of  such  tax  must  be  filed 
with  the  Secretary  of  State  (sees.  955,  i)5G,  1313;  Laws  of  1003,  pp.  123,  125). 
Hurt  V.  Salisbury,  55  Mo.  310;  Cora'rs  i'.  Shields,  G2  Mo.   247;  Grauby  Co.  v. 
Kicliartls,  93  Mo.  106  ;  8  S.  W.  246. 

(5.  Organization  Tax.  —  Fifty  dollars  for  tlie  first  fifty  thousand  dollars 
or  less  of  capital  stock,  and  <§.")  for  each  additional  ten  thousand  dollars. 

7.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  issuing 
aud  recording  certificate  of  corporate  existence,  ^1.50.  For  certifying  copies 
of  records,  SI.     Recording  fees  in  local  county  olfices  averages  $1.75. 

S.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon 
the  amount  of  debts  a  corporation  may  contract,  except  that  the  bonded  in- 
debtedness must  not  exceed  the  amount  of  autliorized  capital  (sec.  962). 

9.  Commencing  Business.  —  As  soon  as  the  certificate  of  organization 
is  issued  by  the  Secretary  of  State  and  a  certified  copy  thereof  filed  in  the 
office  of  the  recorder  of  deeds  the  company  may  at  once  commence  business. 
As  a  preliminary  to  procuring  the  charter  one-half  of  the  capital  stock  must 
first  be  paid  in  and  the  balance  subscribed  for  (sec.  1312). 

Shepard  v.  Drake,  61  Mo.  Ap.  i;54;  Relnliard  v.  Miniug  Co.,  107  Mo.  616;  18 
S.  W.  17  ;  St.  J.  &  1.  R.  R.  Co.  v.  Shambaugh,  106  Mo.  557  ;  17  S.  W.  581 ;  Q.  C.  ¥.  &  C. 
Co.  V.  Crawford,  127  Mo.  356;  30  S.  W.  1C3. 

10.  Organization  Meetings.  —  Must  be  lield  within  the  State. 
Camp  r.  Byrne  ct  «/.,  41  Mo.  525  ;  N.  M.  R.  R.  Co.  v.  "Winkler,  33  Mo.  354. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  State.  All  meetings  of  directors,  other  than  boards 
of  raining  and  railway  corporations,  must  be  held  at  the  general  office  of  the 
corporation  within  the  State  (R.  S.,  sec.  973). 

0.  &  M.  R.  R.  Co.  V.  McPherson,  35  Mo.  13;  M.  L.  M.  &  S.  Co.  v.  Reinliard,  114 
Mo.  218;  21  S.  W.  488. 

12.  Directors'  Qualifications,  Duties,  and  Liabilities.  —  There  must  be 
not  less  than  three  nor  more  than  thirteen  directors.  Tliree  of  them  must  be 
citizens  and  residents  of  the  State,  and  each  must  be  a  shareholder.  Direc- 
tors may  be  classified  if  desired.  Cumulative  voting  for  directors  permitted 
(sees.  971,  973,  1022,  1312,  1320).  Inspectors  of  election  are  provided  for 
(sees.  947,  94b). 

Ilap  I'.  Mill  Co.,  39  Mo.  Ap.  453. 

fl.  Linhiliiies. — Directors  are  liable  for  knowingly  declaring  and  paying 
dividends  when  the  corporation  is  insolvent  or  which  will  render  it  insolvent. 
This  liability  is  a  joint  and  .several  one,  and  extends  to  debts  of  the  corpora- 
tion then  existing  or  thereafter  contracted.  Directors  voting  against  the 
declaration  of  such  dividends  are  not  liable  (sees.  983,  1321).  They  are  also 
liable  for  making  loans  to  stockholders  (.sec.  1323). 

13.  Stockholders'  Liabilities.  —  Stockholdei's  are  liable  for  corporate 
debts  to  the  extent  of  their  unpaid  stock  subscriptions  (Cons.,  Art.  XII.  sec. 
9 ;  sec.  985). 

Ramsey  v.  Mfg.  Co.,  116  Mo.  313;  22  S.  W.  719 ;  OUesheimer  v.  Mfg.  Co.,  44  Mo. 
Ap.  172 

308  ■ 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

U.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  have  a  cer- 
tificate issued  to  him,  sitrued  by  such  officers  as  the  by-laws  may  provide. 
Par  value  of  shares  may  be  any  amount. 

15.  Preferred  Stock.  —  Preferred  stock  may  be  issued  if  provision  is 
made  therefor  in  the  articles  of  incorporation  or  if  all  stockholders  consent 
(sec.  1302;  Cons.,  Art.  XI.  sec.  10;  Laws  of  19U1,  pp.  91,  92). 

Wiuscott  V.  Investment  Co.,  63  Mo.  Ap.  367. 

If).  Payment  of  Capital  Stock.  —  Stock  can  only  he  issued  for  money 
paid,  labor  done,  or  pniperty  actually  received.  All  fictitious  increase  of  stock 
is  void  (Cons.,  Art.  XII.  sees.  8,  962,  1323). 

Schickle  v.  Watts,  94  .Mo.  410;  7  S.  W.  274 ;  Grocer  Co.  v.  Crow,  36  Mo.  Ap.  288  ; 
Garrett  v.  Mining  Co.,  113  Mo.  330  ;  20  S.  W.  965;  McDaniel  v.  Harvey,  51  Mo.  Ap. 
198  ;  Berry  v.  Rood,  168  Mo.  316  ;  67  S.  W.  644. 

17.  Books.  —  A  transfer  book  and  stock  register  shall  be  kept  at  the  gen- 
eral olfice  of  the  corporation,  which  shall  be  open  to  inspection  of  stockholders 
during  usual  business  hours  for  thirty  days  previous  to  an  election  of  directors 
(sec.  960).  The  books  and  records  of  the  proceedings  of  such  corporation 
shall  be  kept  open  for  the  inspection  of  all  persons  interested  (sec.  lo22-lo26). 

!>..  Office.  —  Every  domestic  corporation  is  required  to  keep  an  office 
within  the  State  (sec.  1022). 

Cleatoui".  Emery, 49  INIo.Ap. 345;  M.  L.  M.  &  S.  Co.  i-.  Reinhard,  114  Mo.  218;  21 
S.  \V.  488. 

19.  Reports.  — Corporations  shall  annually,  on  or  before  July  1,  report  to 
Secretary  of  State  the  location  of  the  principal  office,  name  of  president  and 
secretary,  amount  of  capital  stock,  both  subscribed  and  paid  up,  par  value  of 
stock  and  actual  value  of  stock  at  the  time,  cash  value  of  all  the  personal 
property  and  real  estate  within  this  State  on  June  1st  preceding,  aiul  amount 
of  taxes  paid  by  tiie  corporation  in  this  State  for  year  last  preceding  the 
report  (sec.  10b!). 

20.  Anti-Trust  Statute.  —  All  combinations  to  limit  prices  of  certain  des- 
ignated articles  are  by  statute  declared  to  be  illegal  (Laws  of  1901,  chap.  143). 
An  anti-trust  affidavit  is  required  to  be  made  out  and  sworn  to  by  the  presi- 
dent, secretary,  or  treasurer  of  each  corporation  on  or  before  July  1st  of  each 
year  (sec.  8973). 

2'.  Statutory  Ground  for  Forfeiture  of  Charter. —  The  charter  may 
be  forfeited  for  entering  illegal  trusts  or  combinations;  also  for  failure  to 
maintain  an  office  within  the  State  for  six  months  consecutively  ;  also  for 
abusi',  iKiii-iise,  or  misuse  of  corporat'-  rights  and  privili'ges  (sees.  8971,  1022). 

22.  Extension  of  Corporate  Existence.  —  Corjiorate  existence  may  be 
extended  for  a  further  period  of  fifty  years  by  complying  with  the  law  in  re- 
8i>ect  thereto  (sec.  972).  Corporations  may  also  reincorporate  under  tiie  old 
name  if  tiiey  so  desire  (sec.  lOOS). 

23.  Annual  Franchise  Tax.  —  Tlir:re  is  no  annual  fraiidiisc-  tax. 

21.  Amendments. — Articles  may  be  amended  for  tlie  following  pur- 
poses: To  increase  or  diminish  the  capital  stock,  to  change  the  corporate 
name,  extend  the  corporate  purposes,  to  increase  or  diminish  the  numl>er 
of  directors  to  not  less  than  three  nor  more  than  thirteen  (sees.  958,  902, 
904,  97f,  1327-1329;  Laws  of  1903,  ]..  111). 

OUcsheimer  v.  Mfg.  Co.,  44  Mu.  A  p.  122. 

309 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

25.  Dissolution.  —  A  corporation  may  be  dissolved  only  on  application  to 
the  court,s  for  caii.'^o  .siiown  by  majority  vote  of  the  stockholders  or  without 
cause  shown  by  a  two-thirds  vote  thereof  (sec.   977). 

2G.  Foreign  Corporations.  —  Foreijj;n  corporations  in  order  to  transact 
business  within  the  State  must  file  in  the  office  of  the  Secretary  of  State  a 
copy  of  their  cliarter,  duly  authenticated  by  the  proper  authority,  together 
wiih  a  sworn  statement  under  the  corporate  seal  setting  forth  the  business  of 
the  corporation  which  it  is  engaged  in  carrying  on  or  which  it  proposes  to 
carry  on  in  the  State ;  and  the  principal  officer  or  agent  in  Missouri  must 
make  and  forward  to  the  Secretary  of  State  with  the  affidavits  required,  a 
statement  sworn  to,  of  the  proportion  of  capital  stock  which  is  represented 
by  its  property  located  and  business  transacted  in  Missouri,  and  setting  forth 
the  location  of  its  principal  office  within  the  State  where  legal  service  may  be 
obtained  upon  it.  The  corporation  is  required  to  pay  into  the  State  treasury 
upon  the  proportion  of  its  capital  stock  represented  by  its  property  and  busi- 
ness in  Missouri  incorporating  taxes  and  fees  equal  to  those  required  of  similar 
domestic  corporations  with  an  addition  of  ten  dollars  as  the  license  fee.  The 
Secretary  of  State  is  not  permitted  to  issue  a  license  to  any  foreign  corporation 
bearing  the  same  name  as  that  of  a  domestic  corporation  (Laws  of  1903, 
pp.  121-123). 

In  addition  to  the  foregoing,  every  foreign  corporation  must  maintain  a 
place  of  business  within  the  State  where  service  of  process  may  be  made  and 
where  books  shall  be  kept  showing  all  of  the  corporate  assets  and  liabilities  as 
■well  as  the  names  and  residences  of  the  sliareholders  and  the  officers  and 
managers  of  the  corporation  (Laws  of  1903,  pp.  119-121). 

Car.son-Kand  Co.  v.  Stern,  129  Mo.  381;  31  S.  W.  772;  Tooney  v.  S.  L.  K.  P., 
74  Mo.  Ap.  129 ;  Woollen  Mills  Co.  v.  Edwards,  84  Mo.  Ap.  448 ;  Kimball  v.  Davi.s, 
52  Mo.  194  ;  Hays  v.  Merkle,  70  Mo.  509, 

MONTANA. 

(The  references  cited  below  are  to  Civil  Code  of  1895  unless  otherwise  stated.) 

1.  Statutes  under  Twhich  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Montana  is  found  in  sees.  390-5G3  of  the 
Civil  Code  of  Montana.  Special  acts  are  provided  for  banking,  trust,  mutual 
insurance,  building  and  loan,  railway,  telegraph,  and  telephone  companies 
(sees.  393,  411).  Corporations  may  be  formed  under  the  General  Act  for 
any  kind  of  business. 

2.  Incorporators.  —  There  must  be  at  least  three  incorporators.  There 
are  no  residential  requirements  except  that  it  is  customary  to  have  at  least 
one  resident  incorporator  (sec.  405). 

3.  Contents  of  the  Articles  of  Incorporation  (sec.  403).  —  The  articles 
must  contain : 

a.  Name.  —  Similarity  of  names  is  not  expressly  forbidden  (sec.  403). 

b.  Purposes.  —  The  purposes  for  which  it  is  formed  must  be  set  forth. 
The  laws  set  forth  specifically  the  purposes  for  which  corporations  may 
be  formed  (sec.  393).  The  Secretary  of  State  permits  the  insertion  in  the 
articles  of  incorporation  of  any  number  of  purposes  not  covered  by  special 
acts. 

c.  DomicUinry  Office.  —  The  place  where  the  principal  business  is  to  be 
transacted  must  appear  (sec.  403). 

310 


SYNOPSIS-DIGEST   OF    INCORPORATION    ACTS. 

d.  Duration.  —  Term  for  which  the  corporation  is  to  exist  —  not  to 
exceed  twenty  years  (sec.  403 ;  see  also  sec.  411). 

e.  Board  of  Directors.  —  The  number,  which  shall  not  be  less  than  three 
nor  more  than  thirteen,  and  the  names  and  residences  of  those  who  are 
to  serve  for  the  first  three  months  (sec.  403). 

/.  Capital  Stock.  —  Amount  of  capital  stock  and  the  number  of  shares 
into  whicli  it  is  divided.  The  capital  stock  and  par  value  of  shares  may 
be  any  amount  (sec.  403). 

g.  Stock  Subscriptions.  —  Amount  actually  subscribed,  and  by  whom 
(sec.   40.3). 

h.    Stock  A.isessments.  —  If  stock  is  assessable,  it  must  be  so  stated  (sec.  403) : 

4.  Statutory  Powers.  —  The  Montana  statutes  enumerate  the  common 
law  powers  of  corporations  and  also  confer  the  following  additional  powers. 
To  remove  directors  ;  permitting  stockholders  to  vote  by  proxy  ;  permitting 
mining  companies  to  consolidate ;  authorizing  forfeiture  of  stock  for  non- 
payment of  assessments;  permitting  tlie  impo.sition  of  fines,  not  to  exceed 
SlOO,  for  violation  of  b5'-laws  ;  allowing  cumulative  voting  for  directors 
(sees.  432,  436,  430,  452.  476,  520,  526 ;  Laws  of  1899,  chap.  527). 

5.  Procuring  the  Charter.  —  The  articles  must  be  signed  and  acknowl- 
edged by  each  of  the  incorporators.  They  must  then  be  filed  in  the  office  of 
the  county  clerk  of  the  county  in  which  the  principal  place  of  business  is  to  be 
located,  and  a  copy  thereof  certified  by  the  county  clerk  with  the  Secretary  of 
State.  Thereupon  tlie  latter  official  issues  a  certificate  that  a  copy  of  the  arti- 
cles containing  the  required  statement  of  facts  has  been  filed  in  his  office. 
Thereupon  the  corporate  existence  commences  (sees.  405,  406).  Collateral 
inquiry  as  to  the  legality  of  corporate  existence  is  forbidden  (sec.  395). 

6.  Organization  Tax.  —  No  fee  less  than  SIO;  the  fee  of  the  Secretary 
of  State  is  25  cents  on  each  thousand  dollars  of  capital  stock  up  to 
8100,000;  additional  from  $100,000  to  $250,000,  20  cents  per  81,000;  addi- 
tional from  82.'j0,000  to  $500,000,  15  cents  per  !§1,000 ;  additional  from  $.500,000 
to  81,000,000,  10  cents  per  81,000;  additional  over  81,000,000,  5  cents  per  81,000 
(Laws  of  1899,  chap.  151,  as  amended  by  Laws  of  1903,  chap.  127). 

7.  Filing  and  Recording  Fees.  —  For  i.ssuing  certificate  of  incorporation, 
83.  The  recording  and  filing  fees  are  included  in  the  organization  tax. 
Recording  fees  in  local  county  office,  15  cents  per  hundred  words ;  50  cents  for 
ackiiowli-dginent,  and  10  cents  for  indexing.  Usually  83  covers  this  entire 
service  (J>aws  of  1903,  cliap.  127). 

8.  Corporate  Indebtedness.  —  Mu.st  never  exceed  the  amount  of  capital 
stock  (sees.  438.  525,  sub.  2). 

0.  Commencing  Business. —  As  soon  as  the  certificate  of  incorporation 
has  been  recorded  in  the  office  of  the  county  clerk  and  a  copy  thereof  duly 
certified  with  the  Secretary  of  State,  and  the  latter  has  issued  a  certificate 
that  a  copy  of  the  articles,  properly  drawn,  has  been  filed  in  his  office,  the 
corporation  may  commence  business  (.sec.  406).  By-laws  must  be  adopted 
within  one  month  after  filing  articles  (sec.  430).  No  corporation  can  purchase, 
locate,  or  hold  property  in  any  county  in  the  State,  without  filing  a  certified 
copy  of  its  articles  of  incorporation  in  the  office  of  the  county  clerk  of  the 
county  ill  which  such  property  is  situated,  within  sixty  days  after  such  purchase 
or  location  is  made  (sec.  4fl9).  The  corporation  must  organize  and  commence 
business  within  one  year  after  date  of  incorporation  (sec.  523). 

Morrison  v.  Clarke,  24  Mont.  51.^;   63  Pac.  98. 

311 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

10.  Organization  Meetings.  —  Tlioso  nmst  be  held  within  the  State,  in 
the  absoMOi'  of  any  statute  providing  otherwise. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meet- 
in'^s  must  be  held  at  the  olliee  or  principal  place  of  business  of  the  corpora- 
tion within  the  State.  Directors'  meeting  may  be  held  within  or  without  the 
State  if  tl)e  by-laws  so  provide.  If  held  without  the  State,  either  the  original 
or  a  copy  of  all  proceedings  had  at  such  meeting,  certified  by  the  president  and 
secretary  under  the  coi'porate  seal  shall  be  sent  to  and  kept  at  the  principal 
otlioe  of  the  corporation  in  Montana,  and  shall  be  part  of  the  records  thereat 
(sec.  448). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  not  less  tlian  three  nor  more  than  thirteen  directors,  who  must 
likewise  be  stockholders  to  the  amount  prescribed  in  the  by-laws.  The  only 
exception  is  that  the  directors  authorized  by  tlie  articles  of  incorporation  to 
act  as  such  for  the  first  three  months  need  not  be  stockholders  (.sec.  4:54). 

h.  Liabilities.  —  Directors  are  jointly  and  severally  liable  to  tlie  corporation 
and  the  creditors  in  the  event  of  its  dissolution,  to  the  full  amount  of  capital 
stock  divided,  withdrawn,  paid  out  or  reduced,  and  for  debts  contracted  in 
violation  of  law.  Dissenting  directors  may  protect  themselves  by  causing  their 
dissent  to  be  entered  at  large  in  the  minutes  of  the  directors'  meetings  (sec.  438). 
They  are  also  liable  for  wilfully  making  false  certificates  or  reports  and  for 
failure  to  make  annual  reports  (sec.  445 ;  Laws  of  1903,  chap.  32). 

Cans  V.  Switzer,  9  Mont.  408;  24  Pac.  18;  State  Sav.  Bank  o.  Johnson,  18  Mont. 
440 ;  45  Pac.  662. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable,  to  the  extent  of 
their  unpaid  stock  subscriptions,  for  all  acts  and  contracts  made  by  such  cor- 
poration until  the  whole  amount  of  capital  stock  subscribed  by  them  shall 
have  been  paid  in  (sec.  470). 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate  of 
stock  signed  by  the  president  and  secretary  (Civ.  Code,  sec.  471).  Par  value 
of  shares  may  be  any  amount. 

l.j.  Preferred  Stock.  —  There  is  no  express  power  given  by  statute  to 
issue  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Corporations  can  issue  stock  or  bonds 
only  for  labor  done,  services  performed,  money  or  property  actually  received. 
All  fictitious  increase  of  stock  is  void  (Cons.,  Art.  XV.  sec.  10;  sec.  525). 
The  Code  provides  that  the  directors  may  purchase  mines,  manufactories,  and 
other  property  necessary  for  its  business,  and  issue  stock  in  the  amount  of  the 
value  thereof  in  payment  thereof,  and  the  stock  so  issued  shall  be  declared  and 
deemed  to  be  full-paid  stock  and  not  liable  to  any  further  call.  Neither  shall 
the  holders  thereof  be  liable  for  unpaid  stock  subscriptions  as  provided  in  sec. 
470  of  the  Code.  The  law  provides  that  any  arbitrary  value  may  be  fixed  on 
for  mines,  irrespective  of  actual  value.  Wherever  stock  has  been  issued 
therefor,  such  stock  shall  be  deemed  full-paid  stock  regardless  of  the  actual 
value  of  the  mine  at  the  time  of  such  purcha.se  (sec.  410). 

17.  Books.  —  liooks  of  by-laws,  stock  register,  transfer  book,  and  record 
book  of  corpioration  must  be  kept  at  principal  office  within  the  State.  Stock- 
holders have  the  right  of  inspection  at  any  time  during  business  hours 
(sec.  541). 

18.  Office.  —  Every  domestic  corporation  is  required  to  keep  an  office 
within  the  State.     The  statute  provides  that  the  principal  place  of  business 

;U2 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

within    the    State   must   be   named   in   the    articles   of    incorporation    (sees. 
4U3,  448). 

1!).  Reports.  —  Ollicers  and  directors  are  iield  individually  liable  for  debts 
of  the  corporation  if  the  president  and  a  majority  of  directors  fail  between 
December  olst  and  January  20th  following  to  make,  file,  and  publish  a  verified 
statement  of  amount  of  stock,  amount  paid  in,  and  amount  of  existing  debts 
(sec.  451;   Laws  of  l!Hi;3.  chap.  32). 

20.  Anti-Trust  Statute.  —  Certain  kinds  of  trusts  and  combinations  are 
declared  illegal  by  statutes.  (See  Cons.,  Art.  XV.  sec.  20  ;  Penal  Code, 
chap.  S,  sees.  321,  ;>2.").) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  upon  direct  pi'oceedings  taken  by  the  State  for  misuser  or  non- 
user  thereof.  Also  for  failure  to  organize  and  commence  business  within  one 
year  from  date  of  incorporation  (Code  Civ.  Pro.,  sec.  1411;  Civil  Code, 
sec.  523). 

22.  Extension  of  Corporate  Existence.  —  The  corporate  existence  may 
be  extended  by  compliance  with  the  statute  in  such  case  made  and  provided 
(sees.  412,  502). 

23.  Annual  Franchise  Tax. —  There  is  no  annual  franchise  tax. 

24.  Amendments.  —  Amendments  may  be  made  increasing  or  decreasing 
capital  stock,  changing  par  value,  location  of  principal  office,  or  the  character 
of  business  (sees.  413,  450,  525). 

25.  Dissolution. —  Dissolution  may  be  had  only  by  application  to  the 
courts  (Code  Civ.  Pro.,  title  VI.  part  III.;  title  X.  part  II.  chap.  5,  sees. 
2190-2196;  .see  also  Civ.  Code,  sec.  501). 

Cans  V.  Switzer,  9  Mont.  408;  24  Pac.  18. 

20.  Foreign  Corporations.  —  Foreign  corporation-^  desiring  to  do  busi- 
ness in  Montana  must  tile  in  the  office  of  the  Secretary  of  Slate  and  in  the 
office  of  the  county  recorder  of  the  county  wherein  they  propose  to  carry  on 
their  busimss,  a  duly  authenticated  copy  of  their  charter  or  certificate  of 
incorporation,  and  a  verified  statement  made  by  the  president  and  secretary, 
and  attested  by  a  majority  of  the  board  of  directors,  showing  name  of  corpo- 
ration and  location  of  its  principal  place  of  business  within  the  State;  amount 
of  capital  stock,  amount  of  capital  stock  paid  in  in  money,  paid  in  in  any 
other  way ;  amount  of  assets  of  the  corjioration,  of  what  they  consist  and 
actual  value  thereof  ;  statement  of  the  liabilities  of  the  cor])oration.  secured  and 
unsecured.  The  corporation  must  also  appoint  an  agent,  who  shall  be  a  citizen 
of  the  State,  upon  whom  .service  of  process  may  be  made  (Act  of  March  !), 
1901,  repealing  .sees.  1030  and  103S  of  C.  C).     ^lust  also  file  annual  reports. 

Powder  River  Cattle  Co.  i>.  Commissioners,  9  Mont.  145;  23  Pac.  383;  Amor. 
H.  S.  Co.  V.  O'Uourke,  23  Mont.  530;  59  Pac.  910;  McNaughton  Co.  v.  McUirl,  20 
Mont.  124;  49  Pac.  651. 

NEBRASKA. 

(The  references  arc  to  llie  ('oiii[iili'(l  Lhw.m  of  1903  unless  otlicrwisc  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. — 
The  Piisiness  Corporation  Act  of  Xehra.ska  is  found  in  the  Compiled  Statutes 
of  Nei)raska,  1903.  Special  acts  are  provirlcd  for  banks,  building  and  loan 
railway,  safe  deposit  and  trust,  street  railway,  fidelity,  and  guaranty  conipa- 


INCORPORATION    AND   ORGANIZATION   Of'  CORPORATIONS. 

nies.  Under  the  (ienoral  Act  parties  may  iiicorjwrate  for  any  lawful  business, 
inohulin!::  the  eoiistriietion  of  canals,  railways,  bridges,  and  other  works  of  inter- 
nal improvement. 

•J.  lucorporators.  —  Any  number  of  persons  may  incorporate.  There 
are  no  residential  requirements  (C.  L.,  sec.  'JOSl). 

;{.  Contents  of  the  Articles  of  Incorporation.  —  It  is  customary  to  pro- 
vide in  the  articles  of  incorporation  for  the  following  matters: 

a.  Name. — The  name  of  the  corporation.  Similarity  of  names  is  not 
forbidden  (C  L.,  sec.  2088). 

b.  Domiciliary  Office.  —  The  principal  place  within  the  State  for  the  trans- 
action of  business  (Id.). 

e.  Purposes.  —  The  general  nature  of  the  business  to  be  transacted.  This 
would  seem  to  permit  of  the  incoi'poi'ation  of  a  company  for  more  than  one 
purpose.  The  Secretary  of  State  construes  the  act  to  permit  of  the  insertion 
of  any  number  of  purposes  (Id.). 

(/.  Capital  Slock.  —  The  amount  of  capital  stock  authorized  and  time  and 
conditions  upon  which  it  is  to  be  paid  in.  The  capital  stock  may  be  any 
amount.  The  par  value  of  shares  may  be  any  amount.  It  is  customary 
to  insert  provision  that  in  case  new  stock  is  issued  it  shall  be  distributed  pro- 
rata among  the  existing  stockholders  (Id.). 

e.  Duration.  —  Time  of  the  commencement  and  termination  of  the  corpo- 
ration.    The  corporate  existence  may  be  perpetual  if  desired  (Id.). 

/.  Corporate  Indebtedness.  —  Highest  amount  of  indebtedness  or  liability  to 
■which  the  corporation  is  at  any  time  to  subject  itself.  The  corporate  indebt- 
edness cannot  exceed  two-thirds  of  the  capital  stock  (C.  L.,  sees.  208."),  2088). 

g.  Directors.  —  A  statement  must  be  made  to  the  effect  that  the  affairs 
and  business  of  the  corporation  shall  be  conducted  by  a  board  of  directors  of 
a  certain  designated  number  and  by  the  officers  l)y  them  to  be  elected  as  here- 
inafter provided  (C.  L.,  sec.  2088). 

h.  Orr/anization  and  Annual  Meeting.  —  A  statement  to  the  effect  that  the 
first  meeting  of  the  corporation  shall  be  held  upon  the  day  of  the  organization 
of  the  corporation,  and  thereafter  the  annual  meeting  shall  be  held  at  the 
office  of  the  corporation  on  a  certain  designated  day.  This  should  be  followed 
by  a  statement  that  at  such  meeting  and  at  the  annual  meetings  thereafter 
the  board  of  directors  shall  be  elected  by  the  stockholders  from  their  own 
number  to  hold  office  until  the  annual  meeting  next  after  their  election  and 
until  their  successors  are  elected  and  qualify  (Id.). 

i.  Officers.  —  A  provision  to  the  following  effect  should  be  inserted. 
The  directors  shall  iu  each  instance  as  soon  as  convenient  after  their  election 
elect  from  their  own  number  a  president,  vice-president,  secretary,  and 
treasurer,  who  .shall  hold  office  until  the  annual  meeting  next  after  their  elec- 
tion and  until  their  successors  are  elected  and  qualify.  Any  two  of  said 
offices  may  be  held  by  one  and  the  same  person,  excepting  the  offices  of 
president  and  vice-president  (Id.). 

J.  By-Laws. — The  board  of  directors  shall  have  full  power  and  authority 
to  make  all  rules  and  by-laws  for  the  proper  government  and  control  of  the 
business  affairs  of  the  corporation,  and  (if  desired)  they  may  alter  and  amend 
the  same  at  pleasure  (Id.). 

k.  Fillinr/  of  Vacancies.  —  Vacancies  occurring  in  the  board  of  directors 
shall  be  filled  by  the  .stockholders.  Offices  vacated  from  whatever  cause  shall 
be  filled  by  the  board  of  directors  (Id.). 

314 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

I.  Amendments.  —  Provisions  may  be  inserted  providing  as  follows : 
These  articles  of  incorporation  may  be  amended  at  any  time.  Every 
amendment  shall  be  first  approved  by  a  two-thirds  vote  of  the  entire  board 
of  directors,  and  upon  being  so  approved,  it  shall  be  entered  at  large  upon 
the  records  of  the  board.  A  draft  of  the  proposed  amendment,  or  amend- 
ments as  the  case  may  be,  shall  then  be  submitted  to  each  stockholder,  with 
the  notice  of  the  meeting  called  for  the  purpose  of  voting  upon  the  same, 
which  notice  shall  be  given  at  least  ten  days  prior  to  the  date  fixed  for  tlie 
meeting.  If  such  amendment  or  amendments,  or  either  of  them,  shall  then  be 
approved  by  the  holder  or  holders  of  two-thirds  of  the  capital  stock  of  the 
corporation,  each  and  every  amendment  so  approved  shall  be  considered 
adopted  and  be  made  a  part  of  the  articles  of  incorporation,  and  the  board  of 
directors  shall  thereafter  siibscribe,  acknowledge,  record,  and  publish  the 
same,  as  by  law  required  (Id). 

■4.  Statutory  Powers.  —  The  statute  merely  enumerates  the  common  law 
powers  of  corporations  (C.  L.,  sec.  2082;  see  C.  L.,  sec.  1989).  By  constitu- 
tional provision  the  legislature  is  required  to  provide  by  law  for  cumulative 
voting  by  person  or  by  proxy  in  the  election  of  directors  (Cons.,  Art.  XIII. 
sec.  5). 

Williams  V.  Lowe,  4  Neb.  382  ;  Enterprise  Ditch  Co.  v.  Moffitt,  58  Neb.  642 ;  79  N.  W. 
560;  Fremont  Carriage  Co.  v.  Thomson,  91  N.  W.  376. 

5.  Procuring  the  Charter.  —  The  articles  of  incorporation  must  be  signed 
by  each  of  the  incorporators.  After  the  articles  have  been  signed  and  acknowl- 
edged they  must  be  filed  in  the  office  of  the  Secretary  of  State.  Before  such 
copy  can  be  filed  the  organization  tax  must  be  paid  together  with  the  filing 
fees.  Thereupon  the  corporation  becomes  a  body  corporate.  The  law 
specifically  provides  that  no  body  of  men  acting  as  a  corporation  under  the 
provisions  of  the  Business  Corporation  Act  shall  be  permitted  to  set  up  the 
•want  of  legal  organization  as  a  defence  to  any  action  brought  against  them 
as  a  corporation;  nor  shall  any  person  suing  on  a  contract  made  with  such 
corporation,  or  for  an  injury  to  the  property  of  said  corporation,  be  per- 
mitted to  set  up  the  want  of  legal  organization  in  defence  of  said  action. 
The  articles  of  incorporation  must  also  be  filed  with  the  county  clerk  in  the 
county  where  the  corporation's  headquarters  are  to  be  located  (C.  L.,  sec. 
2083  ;'  .see  also  C.  L.,  sec.  1988). 

f).  Corporate  Indebtedness.  —  Tlie  amount  of  corporate  indebtedness 
must  not  exceed  two-thirds  of  the  capital  stock  (sec.  3-11). 

7.  Organization  Tax.  —  On  filing  the  articles  the  Secretary  of  State  must 
be  paid  a  foe  of  !$1U  if  the  capital  stock  does  not  exceed  !8100,000.  Where 
it  exce<'(ls  that  amount  an  additional  10  cents  for  each  additional  •'?1,0C0  of 
authorized  capital  stock  in  excess  of  $100,000. 

8.  Filing  Fees.  —  Filing  fees  in  the  office  of  the  Secretary  of  State,  10 
cents  i)er  folio.  Certified  copy  of  articles  of  incorporation,  lo  cents  per 
folio.  Publication  of  notice  of  the  intention  to  incorporate  costs  from  $10  to 
815  (Laws  of  1897,  chap.  18  ;  see  also  C.  L.,  chap.  H3,  Art.  2,  .sec.  3). 

!).  Commencing  Business.  —  Before  a  corporation  can  transact  any  busi- 
ness except  its  own  organization,  it  must,  in  addition  to  adopting  articles  of 
incoriioration  and  filing  and  recording  them  in  the  office  of  the  Secretary  of 
Staff,  also  file  said  articles  with  the  county  clerk  of  the  county  where  their 
headquarters  are  to  be  locat<-d  (sec.  2083).  Within  four  months  after  filing  tiie 
articles  a  notice  must  be  published  in  a  neW8i>aper  near  the  primipal  place  of 

315 


INTOltrOR.VTIOX    AND   OUGANIZATION    OF    COUPOUATIONS. 

business  for  four  weeks,  setting  forth  tlie  coqiorat ion's  name,  principal  i)lace 
».f  Inisincss,  j,^eneral  nature  of  the  business,  amount  of  capital  stoek  autlior- 
ized.  the  time  and  conditions  of  payment,  time  of  commencement  and  termi- 
nation, highest  amount  of  indebtedness  or  liability  to  whieli  tlie  corporation 
is  at  any  time  to  subject  itself,  and  bywliat  oificers  its  affairs  are  to  be  con- 
ducted. '  It  is  not  necessary,  however,  for  tlie  corporation  before  commencing 
business  to  wait  the  completion  of  the  publication  of  the  notice  above  referred 
to  (C.  L.,  sees.  20SG,  2089).  In  manufacturing  corporations  the  incorporators 
are  ipso  facto  commissioners  to  open  the  books  for  stock  subscriptions.  When 
ten  per  cent  of  the  capital  stock  is  subscribed,  such  corporations  may  commence 
business  (C.  L.,  sec.  1973).  The  corporation  must  organize  within  one  year 
after  its  inoor])oration  (sec.  208G). 

10.  Organization  Meeting.  —  Organization  meetings  must  be  held  within 
the  State.  In  the  case  of  manufacturing  corporations  the  law  provides  that 
the  incorporators  shall  be  commissioners  to  open  books  for  the  subscription 
to  the  capital  stock  of  said  company  before  the  corporation  is  organized  by  the 
adoption  of  articles  of  incorporation  as  set  forth  above.  Immediately  after 
these  articles  have  been  adopted  the  incorporators  should  meet  as  stockholders 
and  choose  a  board  of  directors  of  the  number  designated  in  the  articles. 
The  board  of  directors  shall  elect  at  this  meeting  the  officers  and  adopt  by. 
laws.  The  corporation  must  organize  witliin  one  year  after  incorporation 
(C.  L.,  sees.  1971,  1973). 

11.  Meetings  of  Stockholders  and  Directors.  — In  the  absence  of  any 
statute  authorizing  the  holding  of  stockholders'  meetings  outside  the  State, 
such  meetings  should  be  held  within  the  State.  Directors'  meetings  may  be 
held  without  the  State  if  the  by-laws  so  provide  (C.  L.,  sec.  1972). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications.  —  The 
law  does  not  prescrilie  the  number  of  directors.  There  are  no  residential 
requirements.  The  directors  of  manufacturing  corporations  must  be  stock- 
holders, and  they  must  elect  a  president  from  their  own  number.  (See 
C.  L.,  sec.  1972.) 

b.  Liabilities.  —  Directors  are  liable  for  the  illegal  payment  of  dividends 
(Code  of  Civ.  Pro.,  sec.  52G0 :  C.  L.,  sees.  2098,  2099). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent 
of  their  unpaid  stock  subscriptions.  If  the  corporation  fails  to  publish  the 
annual  notice  of  existing  debts  hereafter  referred  to,  then  in  case  the  assets  of 
the  corporation  are  thereafter  exhausted,  leaving  debts  unpaid,  the  stock- 
holders are  liable  to  the  amount  of  stock  owned  by  them  for  all  debts  con- 
tracted before  such  notice  was  given  (C.  L  ,  sec.  2093).  If  any  corporation 
fails  to  comply  substantially  with  the  provisions  of  law  relative  to  giving 
notice  and  other  requisites  of  organization,  then  in  such  case,  after  the  assets 
of  the  corporation  are  first  exhausted,  the  property  of  stockholders  shall  be 
liable  for  corporate  debts  to  the  amount  of  capital  stock  owned  by  them 
(C.  L.,  sec.  2096).     (See  also  Const.,  Art.  XI.  b.  sec.  4.) 

G.  &  A.  Co.  V.  Company,  46  Nelj.  333  ;  64  N.  W.  978, 1097  ;  F.  L.  &  T.  Co.  v.  Funck, 
49  Neb.  353 ;  68  N.  W.  520;  Gorder  v.  Connor,  56  Nob.  781  ;  77  N.  W.  383 ;  Brown  v. 
Brink,  57  Neb.  606 ;  78  N.  W.  280. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  have  a  stock 
certificate  issnerl  to  him  signed  by  such  officers  as  the  by-laws  may  prescribe. 

1.5.    Payment  of  Capital  Stock.  —  Neither  the  Constitution  nor  the  stat- 
ute prescribes  how  the  capital  stock  shall   be  paid  in.     In  tlie  absence  of 
316 


SYKOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

such  provision  it  is  implied  that  it  must  be  paid  in  iu  money  or  money's 
^orth. 

G.  &  A.  Co.  V.  Company,  46  Xeb.  333 ;  64  N.  W.  978,  1097. 

16.  Books.  —  Stock  books  and  books  of  account  nmst  be  kept  at  the 
principal  place  of  business  of  the  corporation  within  the  State,  and  be  open 
to  the  inspection  of  stockholders.  The  foregoing  provision  would  seem  to 
ai^ply  only  to  manufacturing  companies  (C.  L.,  sec.  1972). 

17.  Office.  —  Every  corporation  is  required  to  keep  an  office  within  the 
State  (C.  L.,  sec.  2U88). 

18.  Reports.  — Every  corporation  nmst  give  notice  annually  by  publica- 
tion in  a  newspaper  published  in  the  county  where  its  principal  place  of  busi- 
ness is  located  of  the  amount  of  existing  debts.  This  statement  must  be 
signed  by  the  president  and  a  majority  of  the  directors  (C.  L.,  sec.  2093). 

19.  Anti-Trust  Statute.  —  Under  the  Act  of  1897,  chap.  79,  all  trusts  and 
conspiracies  against  trade  and  business  as  defined  in  the  statute  are  declared 
to  be  illegal  and  void. 

State  V.  Neb.  Dis.  Co.,  29  Neb.  700  ;  46  N.  W.  155. 

20.  Preferred  Stock.  —  There  is  no  express  provision  in  the  statute 
authorizinn'  the  issuance  of  preferr('d  stock. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may  be 
forfeited  through  any  violation  of  the  provisions  of  the  General  Corporation 
Act,  such  as  the  payment  of  dividends  when  the  corporation  has  insufficient 
funds  to  meet  its  liabilities,  etc.  Repeated  acts  of  misuser  or  non-user  have 
been  held  to  constitute  grounds  for  forfeiture  of  franchise  (C.  L.,  sec.  2100  ; 
Code  of  Civ.  Pro.,  sees.  5238-52G0  inclusive).  The  charter  may  be  forfeited 
if  the  corporation  does  not  organize  within  one  year  after  its  incorporation 
(sec.  2080). 

State  V.  A.  &  N.  K.  11.  Co.,  24  Neb.  1 43  ;  38  N.  W.  43  ;  State  v.  Nebraska  Dis.  Co  ,  29 
Neb.  700;  46  N.  W.  155  ;  State  v.  Company,  4  Neb.  354. 

22.  Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax. 

23.  Amendments.  —  The  power  of  amendment  extends  to  the  following 
matters :  capital  stock  may  be  increased  or  decreased  and  nature  of  business 
may  be  changed.     Also  to  change  in  par  value  of  shares  (C.  L.,  sec.  1990). 

21.    Dissolution. — Corporations    may  be  dissolved   by  consent  of  two- 
thirds  of  the  stockholders  (C.  L.,  sec.  1990;  see  also  C.  L.,  sees.  2091,  2101). 
Harrington  v.  Connor,  51  Neb.  214  ;  70  N.  W.  911. 

2.").  Extension  of  Corporate  Existence.  —  Provision  is  made  for  the 
e.xtensioM  of  corporate  existence  for  companies  incorporated  for  the  purpose 
of  erecting  any  public  iin]>rovement  (C.  L.,  sees.  1991,  1992). 

20.  Foreign  Corporations.  —  Such  corporations  mustfili'  with  the  Secre- 
tary of  State  a  copy  of  their  charter  or  articles  ami  a  ciMtified  copy  of  the 
resolution  of  the  board  acccfiting  tin;  general  provisions  of  the  statute  relative 
to  corporations.  In  addition  to  a  recording  fre  of  10  cents  per  hundred  words 
a  charge  of  SIO  for  filing  is  made,  and  if  authorized  capital  stock  exceeds 
§100,000,  a  further  charge  of  10  cents  for  each  excess  §1,000  is  made. 

Schmitt  &  Bro.  Co.  v.  Mahoncy,  60  Neb.  20 ;  82  N.  W.  99  ;  Pioneer  S.ivings 
&  Loan  AH.s'n  v.  Ever,  62  Neb.  sio;  87  N.  W.  1058;  State  v.  Standard  Oil  C^o., 
61  Neb.  28;  84  N.  W.  413. 

317 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

NEVADA. 

(References  below  are  to  the  Laws  of  Nevada,  11)03,  Cliap.  88,  unless  otlierwise  stated.) 

1.  Statutes  under  w^hich  Business  Corporations  may   incorporate. 

The  Business  C"orpt)'"^tion   Act  of  Nevada  is  to  be  found  in  the  Laws  of 

1903,  chap.  88,  sees.  1-111.  Under  this  act  corporations  may  be  formed  for 
the  transaction  of  any  lawful  business  witliin  or  without  the  State,  except  in- 
surance, surety,  or  railway  companies.  These  last  may  be  incorporated  under 
the  act  if  formed  to  transact  business  exclusively  out  of  the  State. 

2.  Incorporators.  —  Three  or  more.     No  residential  requirements  (sec.  1). 

See  In  re  L.  B.  Co.,  I  Sau.  349. 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  must 
set  forth : 

a.  Name.  —  Similarity  of  names  is  forbidden  (sec.  4,  sub.  1).  It  must  end 
with  "  incorporated,"  or  contain  one  of  the  following  words,  "association," 
"company,"  "corjioration,"  "club,"  "society,"  or  "syndicate"  (Id.). 

b.  Purposes.  —  Objects  for  which  the  company  is  formed.  Any  number  of 
purposes  may  be  inserted  (sec.  4,  sub.  3). 

c.  Capital  Stock.  — Not  less  than  'f2,000,  number  of  shares  and  par  value 
thereof,  which  may  be  any  amount.  Amount  of  subscribed  capital  stock  with 
which  it  will  begin  business  not  less  than  §!l,000.  Amount  actually  subscribed 
and  amount  actually  paid  up,  if  any.  If  preferred  stock  is  to  be  issued,  a  de- 
scription thereof  and  terms  of  its  creation  must  be  set  forth  (sec.  4,  sub.  4). 

(/.    Duration.  —  May  be  perpetual  if  desired  (sec.  4,  sub.  G). 

e.  Original  Subscribers.  —  Names  and  post-ofRce  addresses  and  residences 
of  each  of  the  original  subscribers  to  the  capital  stock  and  amount  subscribed 
by  each  (sec.  4,  sub.  5). 

/.  Directors.  —  Whether  the  members  of  the  first  governing  board  shall 
be  styled  "directors"  or  "trustees,"  and  the  number  thereof,  which  shall  not 
be  less  than  three  (sec.  4,  sub.  7). 

g.  DomicUianj  Office.  —  Location  of  principal  office  in  the  State,  giving 
street  and  number  if  practicable  (sec.  4,  sub.  2). 

h.  Assessments.  —  Whether  stock  shall  be  subject  to  assessments  or  not 
(sec.  4.  sub.  8). 

i.  Regulation  of  Internal  Affairs.  —  Any  provision  for  the  regulation  of  the 
internal  affairs  of  the  corporation  that  may  be  desired  may  be  inserted  (sec.  4, 
sub.  9). 

4.  Statutory  Powers. — The  act  enumerates  the  common  law  powers 
and  also  confers  the  following  additional  powers  :  to  vote  by  proxy,  to  forfeit 
stock  for  non-payment  of  assessments,  to  issue  preferred  stock,  to  transact 
business  outsiile  of  the  State,  to  hold  stockholders'  and  directors'  meetings 
outside  of  the  State,  to  permit  cumulative  voting,  to  appoint  an  executive 
committee  from  the  board  of  directors,  to  consolidate  with  other  corporations, 
to  issue  stock  for  labor  or  property,  to  issue  bonds,  to  remove  directors,  to  dele- 
gate the  power  to  directors  to  adopt  by-laws,  to  surrender  charter,  to  hold 
stock  in  other  corporations  (secs.7,  8,  9,  10,  14,  17,  20,  23,  30,  43,  54,  78, 110). 

Sutro  1-.  Company,  19  Nev.  121  ;  7  Pac.  271  ;  Bassett  v.  Company,  1.5  Nev.  293. 

5.  Procuring  the  Charter. — The  corporators  must  subscribe  and  ac- 
knowledge the  articles,  after  which  they  must  be  filed  and  recorded  in  the 

318 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

office  of  the  clerk  of  the  county  where  the  principal  place  of  business  is  to  be 
located.  Next,  a  copy  of  these  articles  certified  under  the  seal  of  the  clerk  of 
said  county  must  be  filed  and  recorded  with  the  Secretary  of  State.  ■  This 
official,  after  payment  to  him  of  the  organization  tax  and  filing  fees,  issues  a 
certificate  that  a  copy  of  the  articles  containing  the  required  statement  of 
facts  has  been  filed  in  his  office.  Thereupon  the  corporate  existence  com- 
mences (sees.  o.  5.  6). 

ti.  Corporate  Indebtedness.  —  There  is  no  statutory  limitatiou  upon 
corporate  indebtfduess. 

7.  Organization  Tax.  —  Before  incorporation  there  must  be  paid  to  the 
Secretary  of  State  15  cents  for  each  thousand  dollars  of  capital  stock  autho- 
rized, but  in  no  case  less  than  $15. 

8.  Filing  and  Recording  Fees.  — There  is  no  extra  charge  for  filing  and 
recording  in  tlie  Secretary  of  State's  olhce  other  than  the  payment  of  the 
organization  tax.  Cost  of  certified  copy  of  charter,  4  cents  per  folio  and  §5 
for  certificate  and  seal  of  State.  The  filing  and  recording  fees  in  local 
county  offices  vary  according  to  the  population  of  the  county.  The  filing  fee 
ranges  from  15  cents  to  25  cents,  and  the  recording  fee  from  20  cents  to  30 
cents  per  folio,  and  copying  fee  from  20  cents  to  30  cents  per  folio  ;  the  cost 
of  affixing  certificate  to  copy  ranges  from  50  cents  to  SI-  Cost  of  filing 
certificate  of  election  of  directors,  etc.,  with  Secretary  of  State,  ^1.  Cost  of 
filing  certificate  of  payment  of  instalment  of  capital  stock  in  Secretary  of 
State's  office,  So. 

9.  Commencing  Business.  —  Business  may  be  commmiced  as  soon  as  the 
certified  copy  of  articles  is  filed  in  the  office  of  the  Secretary  of  State.  The 
time  limited  by  statute  within  which  business  may  be  commenced  is  two  years 
(sec.  5).  Certificate  of  jiayment  of  stock  either  in  whole  or  in  part,  duly 
sworn  to  by  president,  secretary,  or  treasurer,  must  be  filed  in  the  office  of  the 
Secretary  of  State  within  ten  days  thereafter  (sees.  31,  35).  Corporate  exist- 
ence cannot  be  collaterally  attacked  (sec.  52). 

1(1.  Organization  Meeting.  —  May  be  held  within  or  without  the  State. 
Provisions  fur  calling  the  same  is  made  in  tlie  act  (sees.  12,  13,  38). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
may  be  held  within  or  without  the  State.  Voting  by  proxy  permitted. 
Cunnilative  voting  allowed.  Directors'  meetings  may  be  held  wherever  by- 
laws provide  (sees.  13,  14,  17,  20,  2-3). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  at  least  tlirre  directors.  They  need  not  be  stockholders.  They  must 
take  the  oath  of  office.  No  residential  rerpiirements  (sec.  4,  sub.  7,  10).  They 
are  empowered  to  appoint  an  executive  conmiittee  of  two  or  more  of  their 
number  (sec.  23). 

b.  Liahilities.  —  Jointly  and  soverally  liable  wiiere  they  give  out  frauclulcnt 
reports.  Also  liable  for  illegal  declaration  of  dividends  or  unlawtul  witii- 
drasval  of  capital  stock,  where  tliey  consent  thereto  (sees.  08,  73.  77). 

13.  Stockholders'  Liabilities.  —  StockliolderH  are  only  liabli^  for  debts 
of  the  corporation  to  the  exteitof  their  un[)aid  stock  subscriptions  (sees.  31, 
32).  The  statutory  liability  of  stf)ckholders  or  directors  of  foreign  corporations 
will  not  be  enforced  in  Nevada  (sec.  33). 

Thompaon  i>.  Rank,  19  Nov.  171  ;  7  Pac.  870. 

14.  Stock  Certificates.  —  Must  be  signed  by  president  or  vice-jtresident 
and  secretary  or  treasurer.  The  statute  points  out  contents  of  stock  certifi- 
cates (sec.  5<i) 

319 


INCOKPOIIATION    AND    01U5 ANIZATION    OF    COIIPOIIATIONS. 

15.  Preferred  Stock.  —  The  statute  expressly  authorizes  the  issuance  of 
proferreil  stock  (sec.  31,  sub.  4;  sec.  30).  It  may  be  couverted  into  bonds  if 
desired  (sec.  ;>()). 

K).  Payment  of  Capital  Stock.  —  May  be  )>aid  for  in  money,  labor,  or 
property  (sees.  28,  53,  5-1,  55,  !)!)).  Stock  may  be  issued  for  payments  less  than 
the  par  value  thereof  by  complying  with  the  provisions  of  tlie  act  (sec.  53). 

F.  A.  A.  M.  Co.  v.  Thies,  26  Nev.  158;  65  Pac.  373. 

17.  Books.  —  Original  or  duplicate  stock  ledger  must  be  kept  at  principal 
office  within  the  State  for  inspection  of  stockholders  (sec.  14). 

18.  OfEce  and  Agent.  —  Corporation  must  have  an  office  and  agent  in 
charge  within  tlu'  State  (sec.   KI). 

1,0.  Reports.  —  The  president,  seci'etarv,  or  treasurer,  upon  the  payment 
of  each  instalment  of  capital  stock,  must  make  a  certificate  stating  the  amount 
so  paid,  and  whether  paid  in  cash  or  by  the  purcha.se  of  property,  and  the 
nature  anil  amount  and  character  of  and  value  of  services  or  ])roperty  ac- 
cepted in  pavment  of  stock,  stating  also  the  amount  of  ca])ital  stock,  if  any, 
previously  paid  and  recorded.  This  certificate  signed  and  sworn  to  must  in 
ten  days  after  said  payment  be  filed  in  the  ollice  of  the  Secretary  of  State. 
2S'o  other  report  is  required  (sec.  35). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  in  this 
State. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  for  failing  within  two  years  to  organize  and  commence  in  good  faith 
the  business  or  promote  the  objects  or  purposes  for  which  the  corporation  wa.s 
organized. 

22.  Annual  License  Tax.  —  There  is  no  annual  license  tax. 

23.  Amendments.  —  Charters  may  be  amended  both  before  and  after 
organization  foi-  any  purpose  desired  (sees.  37,  39,  40,  42). 

24.  Extension  of  Corporate  Existence.  —  Charters  may  be  renewed  if 
desired  (.sees.  107,  lOS). 

25.  Dissolution.  —  The  charter  may  be  surrendered  by  the  incorporators 
before  organization  if  desired  (.sec.  88).  By  resolution  of  a  board  of  directors 
a  meeting  of  the  stockholders  may  be  called  to  vote  upon  the  question  of  dis- 
solution. Two  thirds  in  interest  of  the  stockholders  or  creditors  entitled  to 
vote  are  required  to  bring  about  a  voluntary  dissolution;  it  may  be  effected 
by  written  con.sent  of  nine-tenths  in  interest  of  secured  creditors  entitled  to 
vote  with  stockholders  without  a  meeting  (sec.  89). 

20.  Foreign  Corporations.  —  Foreign  corporations  desiring  to  do  bu^siness 
in  the  State  are  governed  by  what  is  known  as  the>  Retaliatory  Taxation  Law, 
This  provi<les  that  such  corporation  shall  pay  the  same  taxes  in  Nevada  that 
foreign  corporations  are  required  to  pay  in  the  domicile  of  the  aforesaid  foreign 
corporation.  They  nmst  also  file  certified  copy  of  certificate  of  incorporation 
with  recorder  of  each  county  in  which  they  are  engaged  in  business,  with  a 
list  of  officers,  duly  certified  by  the  pi-oper  officers ;  must  appoint  a  resident 
agent  in  this  State  to  receive  legal  process  by  certificate  filed  with  Secre- 
tary of  State,  failing  in  which  process  may  be  served  upon  Secretary  of  State, 
and  must  publish  an  annual  report  in  January  and  file  same  with  county 
assessors  where  business  is  carried  on  (sec.  100  ;  C.  L.,  sees.  897,901;  Laws  of 
1901,  chap.  108).     Fee  for  permit  and  filing  fees,  $10. 

W.  G.  &  S.  M.  Co.  V.  Baker,  3  Nev.  351  ;  Evans  v.  Lee,  11  Nev.  194  ;  Brooks  r.  Syn- 
dicate, 24  Nev.  2G4,  311  ;  52  Pac.  575  ;  53  Pac.  597. 
320 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

NEW   HAMPSHIRE. 

(References  below  are  to  Public  Statutes  of  New  Hampshire,  1891,  unless  otherwise  stated.) 

1.  Statutes  under  -which  Business  Corporations  may  incorporate. 

The  Business  Corporation  Act  of  Xew  Hampshire  is  to  be  found  in  the  Pub- 
lic Statutes  of  Xew  ilauipshire,  1891,  chap.  1-17.  Under  this  act  corporations 
may  be  formed  for  the  purpose  of  carrying  on  any  lawful  business,  excepting 
banking  and  life  insurance,  and  the  making  of  contracts  for  the  payment  of 
money  at  a  fixed  date  or  upon  the  happening  of  some  contingency  and  the 
construction  and  maintenance  of  railroads. 

2.  Incorporators.  —  There  must  be  five  or  more  incorporators  of  lawful 
age.     There  are  no  residential  requirements  (chap.  117,  sec.  1). 

3.  Contents  of  Articles  of  Association.     The  articles  nnist  set  forth  : 

a.  Xame.  —  Similarity  of  names  is  forbidden  (chap.  148,  sees.  2,  3). 

b.  Purposes.  —  Object  for  which  the  corporation  is  formed.  State  officials 
construe  this  to  attthorize  incorporation  for  any  number  of  purposes  not  pro- 
vided for  by  special  act  (chap.  148,  sec.  2). 

c.  DomiclUanj  Office.  —  Location  of  principal  place  of  business  (Td.). 

d.  Capital  Stock.  —  Amount  thereof.  Capitalization  cannot  be  less  than 
$1,000  nor  more  than  §1,000,000.  Par  value  not  less  than  825  nor  more  than 
§300  (chap.  148,  sec.  G). 

e.  Incorporators.  —  Names  and  post-office  addresses  of  tlie  incorporators 
(chap.  148,  sec.  2). 

The  duration  of  corporate  existence  may  be  unlimited  if  desired. 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of 
common  law  powers,  the  act  authorizes  stockholders  to  vote  by  proxy,  and 
provides  for  the  forfeiture  of  stock  for  non-payment  of  assessments  (chap.  148, 
sees.  1-0  inclusive  :  chap.  149,  sees  22,23,25,26;  Id.  sees.  16-18  inclusive). 

5.  Procuring  the  Charter.  —  Articles  must  be  recorded  in  the  office  of 
the  clerk  of  the  town  in  which  the  business  of  the  corporation  is  to  be  carried 
on,  and  also  in  the  office  of  the  Secretary  of  State.  The  charter  fee  must  be 
paid  to  the  Secretary  of  State  at  the  time  articles  are  filed  (chap.  147,  sec.  4). 

G.  Corporate  Indebtedness.  —  Debts  cannot  be  contracted  exceeding 
one-half  of  the  value  of  the  corporate  property  (chap.  I.'jO,  sec.  4). 

C.  li.  S.  B-ink  V.  Fiskc,  62  N.  II.  78,  180. 

7.  Organization  Tax.  —  Corporations  formed  to  carry  on  business  with- 
out the  State  must  [tay  the  State  Treasurer  the  following  fees:  If  capitalization 
does  not  exceed  !325,0U0,  )?1();  from  i3;25,00()  to  !?  100,000,  825;  from  -SHiO, 000 
to  ^500,000,  850  ;  from  ^50(».(l()(»  to  81.000,flO(».  SlOO;  above  .?  1,000,000,  !8;200. 
Corporations  formefl  by  sjiecia!  act  of  the  legislature,  8.')0  (chap.  14,  sees.  5,  (5). 
Corporations  formed  to  carry  on  business  and  having  their  principal  office 
within  the  State  must  pay  to  tlie  State  Treasurer  a  fee  of  S50  (ciiap.  14,  .sec.  G). 

8.  Filing  and  Recording  Fees.  --  The  Secretary  of  State  is  entitled  to 
fees  for  n-cording  articles  which  average  about  85.  The  cost  of  recording 
articles  in  the  city  clerk's  office,  ?1.50. 

9.  Commencing  Business.  —  Corporations  may  commence  Inisiness  as 
soon  as  the  chart'r  is  filed  as  required  by  law  and  the  organization  perfi'cted. 
Uusiness  must  be  commenced  within  three  years  from  the  date  of  incorpora- 
tion (chap.  147,  sec.  4  ;  chap.  149,  sec.  2). 

21  321 


INCOnrORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

10.  Organization  Meeting.  —  The  orc;aiiization  meeting  iniist  be  lield 
within  tlio  State.  Tiiis  in  tliC  absence  of  any  statute  expressly  authoriziiiLj 
such  meetings  to  bt>  liold  witlioiit  the  State  (see  chap.  IIS,  sees.  4,  5). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  hold  within  the  Slate.  Directors'  nieeting.s  may  be  held  without 
the  State  if  the  by-laws  so  provide.  There  is  no  statute  authorizing  the 
liolding  of  stockholders'  meetings  without  the  State,  and  at  stockholders' 
meetings  each  stockholder  may  give  one  vote  for  each  share  he  owns  there- 
in not  exceeding  one-eighth  part  of  the  whole  number  of  shares  (chap.  149, 
sec.  9). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications. ^Thi^ve 
must  be  at  least  three  directors,  one  of  whom  must  be  a  resident  of  the  State, 
provided  the  corporation  has  any  stockholders  within  the  State  (cl)ap.  141), 
sec.  4). 

b.  Liabilities.  —  Directors  are  liable  for  the  declaration  of  illegal  dividends 
or  for  permitting  contraction  of  corporate  indebtedness  beyond  the  amount 
limited  by  law.  The  directors  and  treasurer  must,  within  thirty  days  after 
the  whole  amount  of  capital  stock  has  been  paid  in,  make,  subscribe,  and  file 
in  the  office  of  the  clerk  of  the  town  where  the  corjxjratioii  lias  its  princijxil 
place  of  business  a  certificate  to  that  effect,  under  penalty  of  being  liable  for 
all  debts  of  the  corporation  contracted  after  the  expiration  of  said  thirty  days 
and  before  said  certificate  shall  be  so  made  and  recorded  ;  also  liable  for  loans 
and  false  certificates  to  stockholders  (chap.  150,  sees.  2,  3,  4,  5,  G,  14,  1!)). 
Directors  are  also  individually  liable  for  all  debts  of  the  corporation  until  the 
annual  report  is  made  as  required  by  law  (chap.  150,  sec.  16). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent 
of  their  unpaid  stock  subscriptions.  Stockholders  receiving  unlawful  refund 
from  the  capital  stock,  or  for  knowingly  receiving  illegal  dividends,  are  indi- 
vidually liable  for  debts  of  the  corporation  then  existing  or  afterwards  con- 
tracted until  the  same  is  refunded  or  paid  to  the  creditors  of  the  corporation. 
They  are  also  liable  as  partners  if  the  charter  is  void  (chap.  150,  sees.  7,  8,  0 ; 
chap.  11,  sec.  9).  Stockholders  are  liable  for  all  debts  and  contracts  of  the 
corporation  until  the  whole  amount  of  capital  shall  have  been  paid  in,  and  a 
certificate  thereof  signed  by  the  treasurer  and  a  niajoiity  of  the  directors  has 
been  filed  and  recorded  with  the  clerk  of  the  city  or  town  where  such  corpora- 
tion has  its  principal  place  of  business.  No  note  or  obligation  given  by  a 
stockholder  shall  be  considered  as  payment  of  any  part  of  the  capital  stock 
(chap.  150,  sees.  8,  9). 

Swan  V.  Burnham,  70  N.  II.  .580  ;  49  Atl.  93 ;  March  v.  Eastern  R.  R.,  43  N.  H. 
516;  Smith  v.  Bank  of  New  England,  69  N.  H.  254  ;  45  Atl.  1082;  Lancaster  Starch 
Co.  V.  Moore,  62  N.  II.  671. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  have  a  certifi- 
cate issued  to  him  signed  by  the  treasurer  or  cashier  and  such  other  officer  as 
the  by-laws  may  prescribe.  No  certificate  must  be  issued  until  the  par  value 
of  shares  mentioned  in  it  have  been  fully  paid  to  the  corporation.  The  par 
value  of  the  shares  must  not  be  less  than  S25  (chap.  149,  sees.  5,  10). 

15.  Preferred  Stock.  —  Preferred  stock  is  authorized  (chap.  149,  sec.  8). 

16.  Payment  of  Capital  Stock.  —  Stock  must  be  paid  for  in  money  or 
money's  worth.  The  statute  forbids  the  payment  of  capital  stock  by  promis- 
sory note.  The  statute  also  provides  that  no  shares  shall  be  sold  at  less  than 
I>ar  (chap.  149,  sec.  9;  chap.  150,  sec.  9).     No  certificate  can  be  issued  until 

322 


SYNOPSIS-DIGEST    OF    INCORPORATION    ACTS, 

the  par  value  of  the  shares  mentioned  in  it  has  been  fully  paid  (chap.  149, 
sec.  10;  see  also  chap.  150,  sees.  10,  11). 

Libby  i-.  Compauy,  68  N.  H.  444  ;  44  Atl.  602  ;  Lincott  et  al.  v.  Compauy,  68  X.  H. 
260  ;  44  Atl.  392  ;  Kimball  v.  Company,  69  N.  H.  485;  45  Atl.  253. 

17.  Books.  —  Records  of  the  proceedings  of  stockholders  and  directors 
and  all  papers  must  be  recorded  in  the  office  of  the  clerk  of  the  corporation  in 
the  State.  Books  of  account,  names,  and  residences,  number  of  shares 
owned  by  each  .'stockholder,  shall  also  be  kept  with  the  clerk  (chap.  149,  sec. 
1"2;  chap.  148,  sees.  10,  11).  All  record.s,  accounts,  and  papers  are  open  to 
inspection  of  stockholders  (chap.   148,  sec.   12). 

18.  OflBce  and  Agent.  —  Every  corporation  must  maintain  an  office 
within  the  State,  and  a  clerk  therein  to  receive  process,  who  shall  keep  the 
records  of  the  company  (Pub.  Stat.,  chap.  148,  sees.  10,  11,  12). 

19.  Reports.  —  Corporations,  excepting  insurance,  railroad,  bank,  and  loan 
and  building  associations,  shall  annually  in  May  make  a  report  to  the  Secretary 
of  State,  and  to  the  clerk  of  the  town  in  which  the  principal  business  is  car- 
ried on,  stating  amount  of  assessments  paid  in;  amount  of  debts  due  to  and 
from  corporation  and  value  of  all  property  and  assets  of  the  corporation  on  tbe 
first  day  of  May.  Xon-conipliance  makes  the  treasurer  and  directors  indi- 
vidually liable  for  all  debts  and  contracts  (Pub.  Stat.,  chap.  150,  sec.  10). 

20.  Anti-Trust  Statute.  — There  is  no  anti-trust  statute. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  declared  void  for  faihn-e  to  pay  the  fees  required  by  law  or  for  falsely 
pretending  that  the  corporation  is  to  carry  on  its  business  and  have  its  prin- 
cipal office  within  the  State  for  the  purpose  of  avoiding  the  payment  of  the 
charter  fee  required  by  law  (sec.  44,  chap.  14,  sees.  8,  9,  10  ;  Laws  of  1896, 
p.  319). 

State  V.  Barron,  58  N.  H.  370 ;  Parsons  v.  i:urcka  Powder  Works,  48  N.  11.  66. 

22.  Amendments.  —  Charter  may  be  amended  for  the  purpose  of  chang- 
ing its  name,  increasing  or  decreasing  the  capital  stock,  or  for  amending  its 
articles  of  association  in  any  other  respect  desired  (Laws  of  1895,  chap.  2  ; 
chap.  1 19,  sec.  7). 

2'-).  Extension  of  Corporate  Existence.  —  There  is  no  provision  for 
extension  of  corporate  existence. 

24.  Dissolution. —  Stockholders  owning  one-fourth  of  the  stock  may 
petition  in  the  .superior  court  for  dissolution  (sec.  31,  P.  S.,  chap.  147,  sees. 
10-12;  see  also  chap.  118,  .sec.  18). 

School  District  v.  Greenfield,  64  N.  II.  84 ;  6  Atl.  484. 

25.  Annual  License  Fee.  —  There  is  no  annual  liccn-se  fee. 

20.  Foreign  Corporations.  —  No  special  requirements  exacted  to  carry 
on  business.  Need  not  declare  the  name  of  its  agent.  May  maintain  a  suit 
in  the  State.  Foreign  corpoiations  doing  business  in  the  Stale  must  iile  witii 
the  State  librarian  on  or  before  January  1st  of  each  year  all  printed  reports  of 
their  condition  i.ssued  by  them  during  the  twelve  months  preceding  (Laws  of 
1895,  chap.  3). 

Lumbard  v.  Aldrich,  8  N.  II.  31. 


323 


INCOUrOUATlON    AND   ORGANIZATION    OF   CORPORATIONS. 

NEW    JERSEY. 

(The  references  eited  bolow  are  to  Laws  of  1890,  chap.  185,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. — 

The  lUisiiu'ss  Corporation  Act  is  to  bo  found  in  chap.  IS,'),  Laws  of  ISDG,  and 
ameii.lincnts  thereto  made  in  the  years  18!>7,  1898,  1899,  1900,  1901,  190-2, 
and  1903.  Special  acts  are  provided  for  the  incorporation  of  savings  banks, 
building  and  loan  associations,  surety,  railway,  telegraph,  telephone,  canal, 
turnpike,  baTiking,  safe  deposit,  and  trust  companies.  The  statute,  however, 
provides  that  corporations  may  incorporate  under  the  General  Act  for  the 
purpose  of  coustructing,  maintaining,  and  operating  railroads,  telegraph  and 
telephone  companies  outside  of  the  State. 

2.  Incorporators.  —  Three  or  more  persons.  There  are  no  residential 
requirements  (sec.  6). 

C.  K.  R.  V.  r.  R.  R.  Co.,  31  N.  J.  Eq.  475. 

3.  Contents  of  the  Certificate  of  Incorporation  (sec,  8).  The  certifi- 
cate must  set  fortli  : 

a.  Name.  —  No  name  can  be  used  already  in  use  by  any  existing  corpora- 
tion of  the  State,  or  so  nearly  similar  thereto  as  to  lead  to  uncertainty  or  con- 
fusion. It  must  be  in  the  English  language  (sec.  8;  Laws  of  1897,  chap.  274; 
Laws  of  1903,  chap.  149).  The  name  insurance,  safe  deposit,  trust  company, 
or  bank  cannot  form  part  of  the  name  (Laws  of  1897,  p.  274). 

b.  Domicile.  —  The  location  of  the  principal  office  in  the  State;  street  and 
number  must  be  given  if  located  in  a  city  (sec.  8).  Also  the  name  of  the 
agent  in  charge  thereof  and  upon  whom  process  may  be  served  (Laws  of  1898, 
p.  410). 

c.  Purposes.  —  Any  number  of  objects  may  be  inserted  provided  they  are 
not  covered  by  the  special  acts  above  referred  to  (sec.  8). 

d.  Capital  Stock.  —  Amount  of  total  authorized  capital  stock  (not  less 
than  S2,000),  the  number  of  shares  into  which  the  same  is  divided,  and  the 
par  value  of  each  share  (par  value  may  be  any  amount).  The  amount  of 
capital  with  which  the  corporation  will  begin  business,  which  cannot  be 
less  than  $1,000.  If  there  be  more  than  one  class  of  stock,  a  description  of 
the  different  classes  with  the  terms  on  which  the  different  classes  are  created 
must  be  set  forth  (sees.  8,  18). 

e.  Duration.  — May  be  unlimited  if  desired  (sec.  8). 

f.  Provisions  for  the  Regulation  of  the  Internal  Affairs  of  the  Corporation. — 
If  desired,  provisions  may  be  inserted  for  the  regulation  of  the  business  and 
for  the  conduct  of  the  affairs  of  the  corporation  as  well  as  for  creating  and 
defining  and  limiting  or  regulating  the  powers  of  the  corporation,  the  directors 
and  the  stockholders  or  any  class  of  stockholders  (.sees.  8,  11,  12,  17,  34,  47). 

g.  Incorporators.  —  Names  .and  post-office  addresses  of  the  incorporators 
and  the  number  of  shares  subscribed  for  by  each.  The  aggregate  amount  of 
stock  sub.scri[>tions  must  be  equal  to  the  amount  of  stock  with  which  the  cor- 
poration will  commence  business,  which  renders  stock  subscriptions  necessary 
to  the  amount  of  $1,000  (sec.  8  ;  Laws  of  1898,  p.  410). 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of 
common  law  powers,  the  statute  confers  the  following  additional  powers  :  To 
conduct  business  in  other  States  and  foreign  countries;  to  have  one  or  more 
offices  out  of  the  State;  to  hold,  purchase,  mortgage,  and  convey  real  and  per- 

324 


SYNOPSIS-DIGEST   OF  INCORPORATION   ACTS. 

sonal  property  out  of  the  State.  Corporations  for  the  construction  of  railroads, 
water,  gas,  or  electric  works,  canals,  tunnels,  bridges,  viaducts,  hotels,  wharves, 
piers,  etc.,  may  subscribe  for,  pay  for,  hold,  use,  and  dispose  of  stock  or  bonds 
in  any  corporation  for  the  purpose  of  constructing,  maintainiug,  and  operating 
works  of  a  similar  character,  and  the  directors  of  such  corporations  may  accept 
in  payment  of  stock  subscriptions  real  or  personal  property  necessary  for  the 
purposes  of  such  corporation  or  work,  labor,  and  services  peiformed  or 
materials  furnished  to  or  for  such  corporation,  to  the  amount  of  the  value 
thereof,  and  issue  full-paid  stock  in  payment  thereof.  All  classes  of  corpora- 
tions which  may  be  incorporated  under  the  General  Act  are  given  express 
power  to  purchase,  hold,  sell,  assign,  transfer,  mortgage,  pledge,  or  otherwise 
dispose  of  the  shares  of  the  capital  stock  or  any  bonds,  securities,  or  evidences 
of  indebtedness  created  by  any  corporation  of  New  Jersey  or  any  other  State, 
and  while  the  owner  of  such  stock  to  exercise  all  the  rights,  powers,  and 
privileges  of  ownership,  including  the  right  to  vote  thereon.  Other  enumer- 
ated powers  are  the  right  to  vote  by  proxy,  to  issue  preferred  stock,  to  lease 
its  property  and  franchises  to  another  corporation,  to  extend  the  corporate 
existence,  to  consolidate  with  other  corporations,  to  dissolve  itself,  to  enforce 
a  lien  upon  the  stock  of  its  members  for  debts  due  the  corporation,  to  sell 
stock  subscribed  for  for  non-payment  of  stock  subscriptions,  and  to  provide 
for  cumulative  voting  in  the  election  of  directors.  Power  to  adopt  by-laws 
may  be  delegated  to  the  directors  by  inserting  a  clause  to  that  effect  in  the 
bjMaws.  Directors  may  also  be  given  power  to  fix  amount  of  profits  to  be 
reserved  as  working  capital.  A  corporation  may  acquire  and  hold  its  own 
shares  (sees.  1,  7,  11,  17,  18,  2.0,  31,  36,  38,  48,  49^  51,  104,  105;  Laws  of  1900, 
p.  418;  Laws  of  1902,  p.  217). 

Hilles  V.  Piurish,  14  N.  J.  Eq.  380;  M.  T.  &  T.  Co.  v.  D.  T.  &  T.  Co.,  44  X.  J.  Ecj. 
568;  14  Atl.  907  ;  Bergr-r  v.  U.  S.  Steel  Corporation,  63  N.  J.  Eq.  809;  53  Atl.  68. 

5.  Procuring  the  Charter.  —  The  certificate  of  incorporation  must  be 
proved  or  acknowledged  as  required  for  deeds  of  real  estate.  If  acknowledged 
■without  the  State,  the  officer  taking  the  acknowledgment  must  procure  a 
county  clerk's  certificate  of  his  appointment.  The  certificate,  together  with 
two  copies  thereof,  should  be  taken  to  the  office  of  tiie  clerk  of  the  county 
wherein  the  principal  office  of  the  corporation  within  the  State  is  to  be 
established.  The  clerk  will  then  keep  one  of  the  copies  for  the  purpose  of 
recording  the  same,  and  will  endorse  upon  the  original  and  the  other  copy 
certificaUjs  that  they  have  been  filed  in  his  office.  Then  the  original  is  filed 
in  the  office  of  the  Secretary  of  State,  and  a  duplicate  copy  with  the  county 
clerk's  certificate  endorsed  tlnMcon  can  lie  used  by  the  Secretary  of  Slate  for 
the  purpose  of  furnishing  tiie  incorporators  with  a  certified  copy  of  the  cer- 
tificate of  incorporation  (.sees.  8,  9). 

l-:.  G.  L.  Co.  V.  Green,  49  N.  J.  Eq.  329 ;   24  Atl.  .500. 

G.  Corporate  Indebtedness.  —  Tliere  is  no  statutory  liniilation  upon  tlie 
amount  of  iiidebt<'dne.s.s  which  a  corporation  may  incur. 

7.  Organization  Tax.  —  Twenty  ci-iits  for  each  thousand  duliars  of  ca])i- 
tal  stock  authori/pcl.  but  never  Ifss  than  S-5. 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  <if  S(at<'  for  recording 
articles,  10  cents  per  folio  with  a  minimum  charge  of  J?!.  For  issuing 
certified  cojiy  of  the  articlfs  where  .same  arc  furnished  for  that  purjjose,  %\. 
Fee  to  the  county  ch'rk  for  recording  certificate  of  incorporation,  2.")  cents 
per  folio  (Laws  of  1904,  ciiap.  148). 

325 


INCOUrORATION    AND    OROAXIZATION    OF   CORPORATIONS. 

9.  Commeucing  Business.  —  Before  any  corporation  can  begin  business 
at  least !?  1,000  of  oajiilal  stock  must  be  subscribed,  and  before  it  can  incur 
debts  the  said  .^1,000  siuill.  within  the  discretion  of  the  board  of  directors,  be 
paid  in  either  Uioney  or  property.  The  law  recjuires  the  president  and  secre- 
tary or  treasurer,  upon  payment  of  each  instalment  of  capital  stock,  or  every  in- 
ci-ease  thereof  to  file  in  the  Secretary  of  State's  ollice  within  ten  days  thereafter 
acerlifieate  stating  the  amount  paid  in  in  cash  or  in  property,  and  the  amount 
previously  paid.  There  is  no  penalty  attached  for  failure  to  comply  with  tiiis 
provision,  but  otFicers  neglecting  or  refusing  to  do  so,  for  a  period  of  thirty 
days  after  written  request  served  on  them  by  any  stockholder,  shall  be  jointly 
and  severally  liable  for  all  debts  contraeted  before  said  filing  (sees.  25,  2G). 

10.  Orgauizatiou Meeting.  —  ]\Iust  be  held  within  the  State.  The  law 
provides  that  where  one  or  more  of  the  incorporators  shall  die  before  the  corpo- 
ration is  organized,  the  survivors  may  in  writing  designate  other  persons  who 
may  take  the  place  of  the  deceased  incorporators  in  the  organization  (sec.  115). 

11.  Meetings  of  Stockholders  and  Directors. —  Stockholders'  meet- 
ings must  be  held  within  the  State  at  the  registered  office.  Directors' 
meetings  may  be  held  without  the  State  if  the  by-laws  so  provide  (sec.  44). 

12.  Directors'  Qualifications  and  Liabilities,  a.  QuaUfications.  —  The 
minimum  number  of  directors  in  New  Jersey  is  three,  one  of  whom  must 
be  a  resident  of  the  State.  All  directors  must  be  stockholders,  the  number 
of  shares  to  be  fixed  by  the  charter  or  by  the  by-laws.  They  may  be  classified 
if  desired.  Cumulative  voting  may  be  provided  for  in  the  certificate  of  in- 
corporation if  desired  (sees.  12,  30,  39). 

b.  Liah'dilies. — Tlie  directors  are  jointly  and  severally  liable  for  paying- 
dividends  out  of  capital  or  for  reducing  the  same.  They  are  also  liable 
for  not  making  and  publishing  notice  of  decrease  of  capital,  or  for  failing  to 
display  name  of  the  company  at  the  principal  office,  and  for  failure  to  allow 
inspection  of  books  or  to  furnish  a  list  of  stockholders  at  elections,  also  for 
failure  to  file  certificate  of  payment  of  capital  stock  witliin  thirty  days  of 
written  notice  so  to  do  (sees.  25,  2G,  33,  45;  Laws  of  1898,  p.  410;  Laws  of 
1904,  chap.  143). 

Williams  v.  Boicc,  38  N.  J.  Eq.  .364. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  personally  liable  to 
creditors  to  the  amount  of  unpaid  stock  held  by  them  where  the  capital 
stock  is  insufficient  to  meet  the  corporate  debts  and  obligations. 

Nat.  Trust  Co.  v.  Miller,  3-3  N.  J.  Eq.  1 55 ;  Wetherbee  v.  Baker,  35  N.  J.  Eq.  501  ; 
Bickley  v.  Schlag,  46  N.  J.  Eq.  533;  20  Atl.  250;  Hood  v.  McNaughton,  54  N.  J. 
Law,  425;  24  Atl.  497. 

14.  Stock  Certificates.  —  Stock  certificates  must  be  signed  by  the  presi- 
dent and  treasurer. 

15.  Preferred  Stock.  —  The  right  to  create  preferred  stock  must  be 
reserved  either  in  the  original  charter  or  in  a  certificate  of  amendment 
thereto.  At  no  time  must  the  total  amount  of  preferred  stock  issued  and 
outstanding  exceed  two-thirds  of  the  capital  stock  paid  in  in  cash  or  property. 
'J'he  preferred  stock  may,  if  desired,  be  made  subject  to  redemption,  at  any 
time  after  three  years  fi'om  the  issue  thereof  at  not  less  than  par.  No 
dividend  exceeding  eight  per  cent  per  annum  can  be  paid  thereon.  Dividends 
may  be  made  cumulative  or  non-cumulative  as  desired  (sec.  18;  see  also 
Laws  of  1902,  p.  217,  sec.  2). 

Elkins  V.  Company,  36  N.  J.  Eq.  233;  McGregor  v.  Company,  33  N.  J.  Eq.  181. 

a26 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

16.  Payment  of  Capital  Stock. — Nothing  but  money  sliall  be  con- 
sidered as  payment  of  any  part  of  the  capital  stock  of  any  corporation  except 
in  the  following  cases:  Any  corporation  formed  under  the  provisions  of 
the  General  Act  may  purcliase  mines  and  manufactories  or  other  property 
necessary  for  its  business,  or  the  stock  of  any  company  or  companies  owning 
mines  or  manufactories,  or  purchase  materials  or  other  property  necessary 
for  its  business,  and  issue  stock  to  the  amount  of  the  value  tliereof  in  pay- 
ment therefor,  and  stock  so  issued  shall  be  fully  paid  and  non-assessable 
and  not  liable  to  any  further  call.  In  the  absence  of  actual  fraud  in  the 
transaction  the  judgment  of  the  directors  as  to  the  value  of  the  property 
shall  be  conclusive  (sees.  48,  49).  Within  ten  days  after  the  payment  of 
the  capital  stock  a  certificate  of  such  payment  signed  and  verified  by  the 
president  and  secretary  or  treasurer  must  be  filed  with  the  Secretary  of 
State  (sees.  25,  26). 

17.  Books.  —  The  books  of  the  corporation,  except  the  stock  and  transfer 
books,  may  be  kept  outside  the  State  if  the  by-laws  or  the  certificate  of 
incorporation  so  provide  (sees.  33,  44).  The  two  books  mentioned  are  open 
to  the  inspection  of  stockholders. 

State  ex  rel.  O'Hara  v.  Nat.  Biscuit  Co.,  ,54  Atl.  241. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  its  principal 
office  within  the  State,  and  have  an  agent  in  charge  thereof,  wherein  shall 
be  kept  the  stock  and  transfer  books  of  tlie  corporation  (sec.  41;  Laws  of 
1S97,  p.  175;   Laws  of  1898,  p.  410). 

19.  Reports.  —  Within  thirty  days  after  the  first  election  of  ofiicers  and 
thereafter  within  thirty  days  after  the  annual  election  a  report  must  be 
filed  in  the  office  of  the  Secretary  of  State,  signed  either  by  the  president 
and  one  otiier  officer,  or  by  two  directors,  setting  forth  the  name,  registered 
office  within  the  State,  and  ageilt  in  charge  thereof,  business  authorized, 
capital  .stock  and  amount  actually  issued  and  outstanding,  names  and 
addresses  of  officers  and  terms  thereof,  the  date  of  the  next  annual  election. 
It  must  also  state  whether  the  name  of  the  company  has  been  at  all  times 
displayed  at  the  entrance  of  its  registered  office,  and  whether  it  has 
kept  at  its  registered  office  a  transfer  book  and  stock  book  containing  the 
names  and  addresses  of  the  stockholders  and  the  number  of  shares  held 
by  them.  In  addition  to  the  foregoing  the  corporation  must  on  or  before 
the  1st  day  of  May  make  a  report  as  of  January  1st  preceding,  signed 
by  the  president  or  treasurer,  showing  the  amount  of  stock  actually  issued 
and  outstanding  as  of  that  date  as  well  as  the  amount  of  authorized  stock, 
and  wliether  payment  has  been  made  tiierefor  in  cash  or  property  (sec.  43  ; 
Laws  of  1.S08,  ]).  410  ;  Laws  of  1901,  chap.  9,  p.  31). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  in 
New  Jersey. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  in  New  Jersi^y  upon  the  follnwing  groiimis  :  For  failure  to  comply 
with  a  court  order  reiiuiring  corjiorate  books  to  be  brought  within  the  State. 
For  non-payment  of  the  annual  franchi.se  tax  (sec.  14;  Laws  of  l.S9(!,  p.  319; 
Laws  of  1901,  chap.  219). 

22.  Amendments.  —  Charters  maybe  amcndi'd  in  the  following  respects; 
First,  before  the  payment  of  capital  stock,  the  incorporators  may  modify, 
change,  or  alt<!r  the  original  certificate  of  incorporation  (i>l  lilntutn.  Second, 
after  the  payment  of  capital  stock  amendments  may  be  made,  changing  the 

327 


INCOUrOUATION    AND    ORGANIZATION    OF   CORPORATIONS. 

nature  of  the  business  named,  increasing  or  decreasing  llie  capital  stock, 
chan'>'in<i  (lie  par  value  of  shares,  the  location  of  the  principal  oUice  within 
the  State,  extending  the  corporate  existence,  creating  preferred  stock,  and 
making  such  other  amendment,  change,  or  alteration  as  may  be  desired. 
Third,  whenever  there  are  any  errors  or  omissions  in  the  certificate  of  incoi'- 
poration  the  board  of  directors  may  take  steps  to  correct  the  same  in  the 
manner  provided  by  statute  (sec.  27;  Laws  of  1897,  p.  175;  Laws  of  18!)8, 
p.  407). 

23.  Extension  of  Corporate  Existence.  —  I\Iay  be  extended  by  compli- 
ance with  the  statute  for  any  period  desired. 

24.  Dissolution.  —  Voluntary  dissolution  of  the  corporation  requires  a 
majority  vote  of  directors  and  written  assent  of  two-thirds  in  interest  of 
the  stock.  If  the  written  assent  of  all  the  stockholders  is  obtained,  a  meeting 
for  the  purpose  of  voting  upon  the  question  of  dissolution  is  unnecessary 
(sec.  31). 

25.  Annual  Franchise  Tax.  —  An  annual  franchise  tax  of  one-tenth  of 
one  per  cent  on  the  par  value  only  of  that  proportion  of  the  authorized  stock 
■which  is  issued  and  outstanding  on  the  1st  day  of  January  is  exacted  where 
the  total  authorized  capital  stock  does  not  exceed  $3,000,000.  Over  tliat  sum 
and  up  10  8^5,000,000  the  tax  is  one-twentieth  of  one  per  cent.  When  above 
85,000,000,  850  for  every  $1,000,000  or  part  tiiereof  in  excess  of  $5,000,000. 
Mining  or  manufacturing  companies  having  at  Itnist  fifty  per  cent  of  their  issued 
or  outstanding  stock  invested  in  mines  or  manufacturing  within  the  State  are 
exempt  from  such  franchise  tax.  Li  those  cases  where  less  than  fifty  per  cent 
is  so  invested  the  assessed  value  of  the  real  or  personal  estate  so  used  in  the 
State  is  deducted  (Laws  of  1901,  p.  31). 

26.  Foreign  Corporations.  — Must  file  copy  of  charter  with  the  Secretary 
of  State  attested  by  its  president  and  secretary  under  its  corporate  seal,  and  a 
statement  attested  in  like  manner  of  the  amount  of  its  capital  stock  authorized, 
and  the  amount  actually  issued,  the  character  of  the  business  which  it  is  to 
transact  in  the  State  and  designating  its  principal  office  in  the  State,  and  an 
agent  who  shall  be  a  domestic  corporation  or  a  natural  person  of  full  age, 
actually  resident  in  the  State,  together  with  his  place  of  abode,  upon  whom 
process  may  be  served.  They  must  also  file  the  same  reports  rec^uired  of 
them  in  their  domiciliary  State,  if  any,  before  they  are  allowed  to  transact 
business  therein.  They  must  pay  tlie  same  license  tax  as  is  required  by  the 
laws  of"  such  domiciliary  State  of  New  Jersey  corporations.  Annual  reports 
are  also  required.  This  report  when  filed  is  made  the  basis  for  levying  an 
annual  tax  of  five  per  cent  per  atinum  u[)on  the  amount  of  gross  receipts  from 
business  done  in  Xew  Jersey.  This  tax  may  be  reduced  by  showing  that  by 
the  laws  of  the  domiciliary  State  of  such  corporations,  a  lower  tax  is  levied 
there  upon  Xew  Jersey  corporations  doing  business  therein.  Foreign  cor- 
porations having  fi'ty  per  cent  of  their  issued  and  outstanding  capital  stock  in- 
vested in  mining  or  manufacturing  carried  on  within  the  State  of  New  Jersey 
are  exempt  from  the  tax;  or  if  less  than  fifty  per  cent  is  so  invested,  the 
corporation  is  entitled  to  have  deducted  such  proportion  of  its  gross  receipts 
as  are  received  from  goods  or  property  so  manufactured  or  mined  within  tiie 
State  of  New  Jersey  (Laws  of  1904,  chap.  221). 

D.  &  H.  Canal  Co.  v.  Mahenbrock,  63  N.  J.  L.  281 ;  43  Atl.  978;  Del,  etc.  Co.  v. 
Pensauken,  116  Fed.  910. 

328 


SYNOPSIS-DIGEST   OF   INCORPORATION  ACTS. 


NEW  MEXICO. 

(Unless  otherwise  stated,  the  references  below  are  to  the  Compiled  Laws  of  New  Mexico, 
1897.) 

1.  Statutes  imder  w^hich  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Xew  Mexico  is  to  be  found  in  the  Compiled 
Laws  of  1897.  sees.  411-456.  Under  it  corporations  may  be  formed  for  min- 
ing, manufacturing,  industrial,  or  other  lawful  pursuits,  except  railway,  wagon 
roads,  irrigation  ditches,  or  for  colonization  and  improvement  of  lands  (sec. 
411). 

2.  Incorporators.  —  Any  number  not  less  than  three.  There  are  no  res- 
idential requirements  (sec.  415). 

3.  Contents  of  the  Certificate  of  Incorporation.  The  certificate  must 
set  forth  : 

a.  Name.  —  There  cannot  be  more  than  one  corporation  of  the  same  name 
except  in  the  case  of  mining,  mechanical,  or  manufacturing  corporations  (sees. 
415,  438). 

b.  Purposes.  —  Objects  and  purposes  for  which  the  corporation  is  formed. 
Any  number  of  purposes  not  covered  by  special  act  are  permitted  (sec.  415). 

c.  Capital  Stock.  —  Amount  of  capital  stock,  number  of  shares,  and  par 
value  thereof.  Capitalization  may  be  any  amount.  Par  value  may  be  any 
amount  (.sec.  415). 

d.   Duration.  —  Term  of  e.xistence,  which  cannot  exceed  fifty  years  (sec.  415). 

e.  Directors.  —  Number  of  board  of  directors  not  less  than  three,  and  names 
of  board  for  first  three  months,  together  with  their  addresses  (sees.  415,  420). 

/.  Domiciliarij  Office. — Name  of  the  city  or  county  where  the  principal 
business  is  to  be  transacted  (sec.  415). 

g.    Incorporators.  —  Full  names  of  incorporators  (sec.  415). 

4.  Statutory  Powers.  —  lu  addition  to  a  statutory  enumeration  of  com- 
mon law  powers,  tlie  following  additional  powers  are  granted:  To  authorize 
voting  by  proxy,  to  autliorize  railroad  corporations  to  consolidate,  to  forfeit 
stock  for  non-payment  of  assessments  ;  to  remove  directors  (.sees.  417, 420,  425). 

Medler  v.  Company,  6  N.  M.  331 ;  28  Pac.  551  ;  S.  F.  E..Co.  v.  Hitchcock,  9  N.  M. 
156;  50  I'ac.  332. 

5.  Procuring  the  Charter.  —  The  charter  must  be  subscribed  and  ac- 
knowledged by  each  of  the  incorporators,  and  then  filed  with  the  Secretary  of 
the  Territory,  to  whom  the  organization  tax  is  paid.  A  certified  copy  of  the 
article.s  nnist  be  filed  with  tlie  recorder  of  deeds  of  the  county  where  tiie  prin- 
cipal business  otlice  is  located  (sees.  415,  417;  Laws  of  11)03,  cliap.  111).  l?y 
Act  of  March  22,  1901  (Session  Laws  of  1901,  \^.  140),  corporations  are  now 
requireil,  witiiin  thirty  days  after  filing  llicir  articles  of  incorporation  wilh 
the  Secretary,  to  publi.sh  a  certified  copy  of  tin-  sanif  in  a  newspaper  publislied 
in  the  county  where  its  princif)al  place  of  business  is  located.  Proof  of  such 
publication  must  be  filed  with  the  Secretary  of  State  within  twenty  days  after 
the  hist  putdication. 

0.  Corporate  Indebtedness.  'I'lic  corporate  indebtedness  cannot  exceed 
the  autlidiiz'-d  cipitai  .stock  (sec.  429). 

7.  Organization  Tax.  —  'iVn  cents  for  eadi  tiioii.sand  dollars  of  capitaliza- 
tion, liul  ill  no  c;i  ;<•  Ih.ss  than  '^25  (sec  141;   I.aws  of  l!>03,  chap.  114). 

b.    Filing  and  Recording  Fess  —  The  Secretary  of  the  Territory  is  entitled 


INCOUroUVTlON    AND    ORGANIZATION    OF    CORPORATIONS. 

to  no  fees  fur  lUiiiL;or  let^ording  articles,  othiM-  tliiiu  the  payment  of  the  organi- 
zation tax  :  for  certified  copy  of  the  articles,  10  cents  per  folio,  plus  sj^l  for  cer- 
tificate. Recording  fees  in  local  county  ofHce,  15  cents  a  folio  for  first  ten 
folios,  and  10  cents  a  folio  for  all  over.  Filing  fees,  50  cents.  The  law  re- 
quires only  filing  and  not  recording  in  local  county  office:  cost  of  publishing 
articles  of  incorporation  averages  about  $10  ;  cost  of  filing  certificate  of  publi- 
cation in  the  office  of  the  Secretary  of  the  Territory,  !$1 ;  for  filing  appointment 
of  agent  in  local  county  office,  50  cents  ;  ^o  for  filing  same  witii  the  Secretary  of 
the  Territory  ;  certified  copy  of  tlie  appointment  of  agent  costs  $1.50.  This 
last  is  required  in  case  the  majority  of  the  stock  is  held  and  owned  outside  of 
the  Territory  (Laws  of  190:5,  chap.  114). 

0.  Commencing  Business.  ^  Corporations  may  commence  business  as 
soon  as  the  articles  are  filed  as  required  by  law.  They  need  not  wait  for  the 
publication  of  the  articles  before  commencing  business.  The  charter  is  sub- 
ject to  forfeiture  if  business  is  not  commenced  within  two  years  after  the 
certificate  of  incorporation  is  filed  (sec.  430). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  Territory.  Tliis  in  the  absence  of  any  statute  authorizing  such 
meetings  to  be  held  without  the  Territory.     (See  however  sec.  456.) 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
are  ordinarily  required  to  be  held  within  the  Territory.  Where  a  majority  of 
the  stock  is  held  outside  the  Territory,  the  by-laws  may  provide  for  the  holding 
of  stockholders'  meetings  outside.  Directors'  meetings  may  be  held  within  or 
without  the  Territory  as  the  by-laws  provide  (sec.  15G). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualijicatiuns.  —  There 
must  be  at  least  three  directors,  who  must  be  stockholders  and  a  majority 
of  them  citizens  of  the  United  States  and  one-third  residents  of  the  Territory 
(sec.  4l^0). 

b.  Liabilities.  —  Directors  are  liable  to  creditors  and  stockholders  for 
moneys  misappropriated,  for  the  illegal  declaration  of  dividends,  or  the  un- 
lawful withdrawal  of  capital  stock.  They  are  also  liable  to  the  extent  of  the 
increase  of  corporate  indebtedness  beyond  the  authorized  capital  stock  (sees. 
428,  429). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  only  for  their 
unpaid  stock  sub.scriptions  (sec.  430). 

Albriglit  V.  Company,  8  N.  M.  110 ;  42  Pac.  73. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
showing  the  numl>er  of  shares  owned  by  him  and  signed  by  such  officers  as  the 
by-laws  may  pre.scribe. 

15.  Preferred  Stock.  — There  is  no  exi)ress  provision  for  the  issuance 
of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  must  be  paid  for  in  money  or 
money's  worth. 

17.  Books.  —  A  record  of  stockholders'  names  and  residences  and  of 
shares  held  by  them,  of  stock  paid  in,  how  much  in  cash,  must  be  kept  at  the 
principal  place  of  business  in  the  county  where  the  corporation's  business  op- 
erations are  located;  which  shall  be  subject  to  inspection  by  stockholders  and 
creditors  during  Imsiness  hours  (sec.  451). 

18.  Office  and  Agent.  —  The  corporation  shall  establish  a  principal  place 
of  business  and  designate  an  agent  residing  thereat,  in  the  Territory,  on  whom 
process  and  notices  may  be  served  (chap.  65,  Laws  of  19()3). 

330 


SYNOPSIS-DIGEST   OF    INCORPORATION    ACTS. 

19.  Reports.  — Xo  reports  are  required. 

20.  Auti- Trust  Statute— There  is  no  Territorial  anti-trust  statute. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  for  failure  to  commence  business  within  two  years  after  filing  articles 
of  incorporation  (sec.  136). 

22.  Amendments.  —  The  charter  may  be  amended  by  the  directors  to 
correct  mistakes  in  original  certificate  (sec.  418).  Charters  may  be  amended 
for  any  purpose  desired  by  complying  with  the  statutory  provisions  relative  to 
the  same  (sees.  431,  432). 

23.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended  for  an  additional  period  of  fifty  years  if  desired  (sec.  419). 

21.  Dissolution.  — Dissolution  may  be  had  by  judgment  of  probate  court 
upon  petition  authorized  by  two-thirds  vote  of  stockholders  (sec.  435). 

2').   Annual  License  Fee.  —  There  is  no  annual  license  fee. 

2(3.  Foreign  Corporations.  —  Foreign  corporations  must,  before  doing 
business  in  the  Territory,  file  with  the  Secretary  of  the  Territory  and  with  the 
recorder  of  deeds  of  the  county  of  its  principal  place  of  business  in  the  Territory 
a  certified  copy  of  the  charter,  or  if  incorporated  under  general  law  a  copy  of  its 
articles  and  of  the  law  under  which  incorporated,  and  file  with  said  oliicers  a 
certificate  signed  and  acknowledged  by  the  president  and  secretary  designating 
the  principal  place  in  the  Territory  where  the  business  shall  be  carried  on,  and 
an  agent  residing  therein  upon  whom  process  may  be  served,  and  shall  i)ay  to 
the  Territorial  Secretary  the  same  fees  as  required  of  domestic  corporations  on 
incorporation.  A  certified  copy  of  the  articles  and  certificates  of  place  of  busi- 
ness and  agent  must  be  filed  in  the  office  of  the  recorder  of  deeds  in  the  county 
in  which  the  principal  place  of  business  is  to  be.  A  copy  of  the  articles  must 
be  published  in  the  county  where  resides  the  resident  agent,  and  certificate  of 
publication  filed  with  the  Territorial  Secretary  (sees.  445,  44G ;  Laws  of  1001, 
chap.  77;  Laws  of  1903,  chaps.  65,  114). 

Union  Trust  Co.  v.  Company,  8  N.  M.  327 ;  43  I'ac.  701. 


NEW  YORK. 

(The  reference  below,  B.  C.  L.,  refers  to  Business  Corporation  Law,  chap.  567,  Laws  of  1890 
as  amended  \>y  Laws  ofl8'J2,  chap.  691.  Tlie  reference  G.  C.  I^.  refer.s  to  (Jeneral  Corporation 
Law,  Laws  of  1890,  chap.  563,  as  amended  by  Laws  of  1892,  chap.  087.  Tlie  reference 
S.  C.  I-.  refers  to  Stock  Corporation  Law,  chap.  564,  Laws  of  1890,  as  amended  by  Laws 
of  1892,  chap.  688.) 

1,  Statutes  under  vrhich  Business  Corporations  may  incorporate.  — 

The  General  Corporation  Act  i.s  to  be  found  in  the  Lawsof  1890,  oha[).  563,  and 
the  acts  amendatory  thereof  passed  since  that  time.  Reference  niustal.so  be  had 
to  what  is  known  as  the  Stock  Corporation  Law,  embodied  in  the  La'vsof  1890, 
chap.  561,  and  subsequent  amendments  thereto.  Finally,  reference  must  also  bo 
h.ad  to  the  Business  Corporation  Act  as  embodied  in  the  Lawsof  1S9(I,  ciiaji.  567, 
and  amendments  thereto.  I'arties  nuiy  incorporate  for  any  lawful  Imsine.ss  pur- 
po.sc  or  purpo.ses.  Special  acts  are  provided  for  railway,  banking,  navigation, 
stage-coach,  tramway,  pipe-line,  gas,  electric  li;xht,  water  works,  telegrajih, 
telephone,  turnpike,  plank  road  and  bridge  coinpanie.s,  banks,  insinance, 
savings  and  l(;an  associations,  mortgagi-,  loan,  safe  deposit  and  investment 
companies. 

2.  Incorporators.  — Three  or  more  adult  persons.     Two-thirds  must  be 

•JO  L 


INCOUrOUATION    AND   OUGANIZATION    OF   CORPORATIONS. 

citizens  of  the  I'liitod  States,  and  at  least  one  a  resident  of  the  State  of  New 
Yoik  (B.  C.  L.,  sec.  'J;  G.  C.  L.,  sec.  4). 

3.  Contents  of  the  Certificate  of  Incorporation  (Laws  of  1903,  chap, 
i)'2b).      'I "he  cortilicale  must  set  forth  : 

a.  Xante.  —  Tlie  name  must  not  conllict  with  that  of  any  existing  domes- 
tic corporation  or  of  any  foreii;'n  corporation  authorized  to  do  business  in  the 
State.  'I'he  words  "trust,"  "banlc,"  "  banking,"  ''insurance,"  "  assurance," 
'  iudenniily,"  "  guaranty,"  "guarantee,"  "savings,"  "investment,"  "  loan," 
or  '*  benefit''  cannot  be  used  (G.  C  L.,  sec.  6  ;  B.  C.  L.,  sec.  2;  Laws  of  1904, 
chap.  110). 

b.  Pti>-po.fes.  —  Any  number  of  objects  may  be  inserted  provided  they  are 
not  covered  by  the  special  acts  above  referred  to  (B.  C.  L.,  sec.  2). 

c.  Capital  Stock.  —  Amount  of  total  authorized  capital  stock  not  less  than 
S500.  If  any  proportion  be  preferred  stock,  the  preferences  thereof  must  be 
set  forth  (B.  C.  L.,  sec.  2;  S.  C.  L.,  sec.  47). 

(/.  Shares.  —  Number  of  shares  with  the  par  value,  which  must  not  be  less 
than  S5  nor  more  than  SlOO  (B.  C.  L.,  sec.  12;  Laws  of  1903,  chap.  525). 

e.  Amount  of  Capital  with  tchich  the  Corporation  will  begin  Business.  —  This 
must  not  be  less  than  $500  (B.  C.  L.,  sec.  2). 

/.  Domicile. — State  the  village  or  town  in  which  the  principal  business 
office  is  to  be  located  (B.  C.  L.,  sec.  2,  as  amended  by  Laws  of  1903,  chap.  525). 
If  in  New  York  City,  state  the  borough  (Laws  of  1903,  chap.  525). 

g.    Duration.  — May  be  perpetual  if  desired  (B.  C.  L.,  sec.  2). 

h.  Directors.  —  Number  and  names  of  directors.  There  must  be  not  less 
than  three  directors,  and  the  names  and  post-olfice  addresses  of  the  directors 
for  the  first  year  must  be  set  forth  (B.  C.  L.,  sec.  2  ;   G.  C.  L.,  sec.  29). 

i.  Stock  Subscriptions  by  Incorporators.  —  Names  and  post-office  addresses 
of  the  incorporators  and  a  statement  of  the  number  of  shares  of  stock  sub- 
scribed for  by  each  (B.  C.  L.,  sec.  2). 

j.  Provisions  for  the  Regulation  of  the  Internal  Affairs  of  the  Corporation.  — 
The  certificate  may  contain  any  other  provision  for  the  regulation  of  the 
business  and  the  conduct  of  the  affairs  of  the  corporation  and  any  limitation 
upon  the  powers  or  upon  the  powers  of  the  directors  and  stockholders  which 
does  not  exempt  them  from  any  obligation  or  from  the  performance  of  any 
duty  imposed  by  law  (B.  C.  L.,  sec.  2  ;  Laws  of  1903,  chap.  525). 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of 
common  law  powers,  the  statute  confers  the  following  additional  poweis  :  To 
purchase,  hold,  and  dispose  of  tlie  stock  and  bonds  and  other  evidences  of 
indebtedness  of  any  other  corporation.  Also  to  Lssue  in  exchange  therefor 
its  own  stock  and  bonds  if  authorized  so  to  do  by  a  provision  in  the  certificate 
of  incorpoiation  ;  or,  without  such  a  provision  in  the  certificate,  if  the  corpo- 
ration whose  stock  is  so  purchased  is  engaged  in  a  business  similar  to  that  of 
the  holding  corporation,  or  engaged  in  the  niaimfacture,  use,  or  sale  of  property, 
or  in  the  construction  or  operation  of  works  necessary  or  useful  in  the  business 
of  such  holding  corporation  or  in  which  or  in  connection  with  which  the  man- 
ufactured article,  produce,  or  property  of  the  holding  corporation  may  be  used, 
or  is  a  corporation  with  which  the  latter  is  authorized  to  consolidate.  To  vote 
by  proxy,  to  issue  preferred  stock,  to  enforce  a  lien  upon  the  stock  of  its 
members  for  debts  due  the  corporation,  to  sell  stock  subscribed  for  for  non-pay- 
ment of  stock  subscriptions,  to  acquire  or  dispose  of  property  in  other  States 
or  foreign  countries,  to  consolidate  with  other  corporations  organized  to  carry 
on  any  kind  of  business  of  the  same  or  a  similar  nature  which  a  corporation 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS, 

organized  under  the  General  Act  might  carry  on.  To  provide  for  cumulative 
voting.  To  delegate  the  right  to  directors  to  adopt  by-laws.  To  issue  pre- 
ferred stock  and  to  issue  stock  in  exchange  for  property.  To  sell  all  the 
corporate  assets  and  to  guarantee  bonds  of  other  domestic  corporations  engaged 
in  the  same  line  of  business.  Limited  voting  trusts  are  permitted  (G.  C.  L., 
sec.  11;  S.  C.  L.,  sec.  40;  G.  C.  L.,  sec.  20;  S.  C.  L.,  sees.  2,  8;  B.  C.  L., 
sec.  2  ;  S.  C.  L.,  sec.  47  ;  G.  C.  L.,  sec.  14;  S.  C.  L.,  sec.  42 ;  B.  C.  L.,  sec.  8; 
S.  C.  L.,  sees.  23,  33,  40,  58  ;  G.  C.  L.,  sees.  21,  29;  Laws  of  1904,  chap.  236). 

5.  Procuring  the  Charter.  —  The  certificate  of  incorporation  must  be 
acknowledged  by  each  of  the  incorporators  before  some  officer  authoi-ized  to 
administer  oaths.  It  must  then  be  filed  and  recorded  in  the  office  of  the  Secre- 
"tary  of  State.  A  certified  copy  of  the  certificate  or  a  duplicate  original,  to- 
gether with  the  receipt  of  State  Treasurer  for  payment  of  the  organization 
tax,  must  be  filed  and  recorded  in  tlie  office  of  the  county  clerk  of  the  county 
where  the  principal  place  of  business  of  the  corporation  is  to  be  located 
(B.  C.  L.,  sec.  2;  G.  C.  L.,  sees.  4,  5). 

People  ex  rel.  Blossom  v.  Nelson,  46  N.  Y.  477  ;  Raisbeck  v.  Oesterrichcr,  4  Abb. 
Xew  Cases,  434  ;  People  ex  rel.  v.  Rice,  128  N.  Y.  591  ;  28  N.  E.  251  ;  Lamming  v. 
Galusha.  81  Hun,  247 ;  30  N.  Y.  S.  767 ;  aff'cl  151  X.  Y.  648;  45  X.  E.  1132 ;  Union  S. 
Co.  V.  City  of  Buffalo,  82  N.  Y.  351. 

0.  Corporate  Indebtedness.  — There  is  no  limitation  upon  the  amount 
of  indebtedness  which  a  corporation  may  incur.     (See  S.  C.  L.,  sec.  28.) 

7.  Organization  Tax.  —  One-twentieth  of  one  per  cent  (or  50  cents  per 
thousand;  upon  the  authorized  capital  stock  as  set  forth  in  the  certificate  of 
incorporation  (Tax  Law,  sec.  180). 

8.  Filing  and  Recording  Fees.  —  To  Secretary  of  State  for  filing  certifi- 
cate of  incorporation,  SlO;  for  recording,  15  cents  per  folio;  to  the  county 
clerk  for  filing  certificate,  6  cents,  and  for  recording,  10  cents  per  folio;  for 
certified  copy  of  articles,  15  cents  per  folio  and  $1  additional  for  certificate 
under  Ihe  (ireat  Seal  of  the  State  ;  for  recording  certificate  of  payment  of 
capital  stock,  15  cents  per  folio. 

9.  Commencing  Business.  —  At  least  8500  of  stock  must  be  subscribed 
before  the  corporation  may  begin  business.  Before  any  corporation  can  incur 
debts  tlie  amount  of  capital  specified  in  the  certificate  of  incorporation  as  tlie 
amount  of  capital  with  which  the  corporation  will  begin  business  must  have 
been  paid  in,  either  in  money  or  in  property.  One-half  of  the  stock  must  be 
paid  in,  either  in  money  or  property,  within  one  year.  Within  thirty  days 
after  such  payment  a  certificate  duly  signed  and  verified  by  a  majority  of  the 
directors  and  the  president  or  vice-president  and  the  secretary  or  treasurer 
mu.st  be  filed  with  the  Secretary  of  State  and  with  the  clerk  of  the  county  in 
which  the  principal  office  is  located.  If  one-half  tlie  capital  is  not  paid  iu 
within  one  year,  the  charter  is  subject  to  forfeiture  (B.  C.  L.,  sec.  5).  The 
charter  is  subject  to  forfeiture  if  use  is  not  made  of  the  corporate  franchi.ses 
within  two  years  after  incorporation  (H.  C.  L.,  sees.  2,  3;  S.  C.  L.,  sec.  42; 
I',.  C.  L.,  sec.  5). 

10.  Organization  Meeting.  -  The  organization  merting  must  be  held 
within  the  State,  and  within  two  years  after  tlu;  date  of  incorporation 
(C.  C.  L.,  sec.  31). 

11.  Meetings  of  Stockholders  and  Directors.  —  While  there  are  no  stat- 
utory n'quirenients  as  to  hoMin- rith.T  stockliold.-rs'  or  directors*  meetings 
within  the  State,  it  is  th.-  general  practice  as  wll  as  un<iu<-stionably  the  only 
safe  practice  to  hold  all  stockholders'  meetings  within  the  State.     (See  Orm.sby 

0'>') 

ooo 


INCORPOK.VTION    AND    ORGANIZATION    OK    COIlPOnATIONS. 

r.  Company.  o()  X.  Y.  O'Jo.)  Directors'  nicetiiif^s,  liowcvor,  may  be  held  witlioiit 
the  State  by  inakiug  provision  to  this  effect  in  the  by-kuvs. 

]'2.  Directors' Qualifications  and  Liabilities,  a.  Qunlificatwns.  —  ]\Iini- 
nmni  directors  under  tlie  statute  are  tliree.  At  least  one-fourth  of  them  must 
be  elected  annually.  They  must  all  be  stockholders  unless  otherwise  j^ro- 
vided  in  the  certificate  of  incorporation  or  in  the  by-laws.  At  least  one  of 
them  must  be  a  resident  of  New  York  (B.  C.  L.,  sec.  2 ;  G.  C.  L.,  sec.  29  ; 
S.  C.  L.,  sec.  20).  Tliey  may  be  classified  if  desired.  Inspectors  of  elections 
are  provided  for  (S.  C.  L.,  sec.  28).  Cumulative  voting  is  permitted  if  author- 
ized by  the  certificate  of  incorporation  (G.  C.  L.,  sec.  20). 

/).  Liabilities.  —  In  case  of  the  withdrawal  of  any  of  the  capital  by  means 
of  loans  to  olRcers  or  stockholders  of  the  corporation,  or  prohibited  transfers 
of  property,  or  false  reports  issued,  directors  are  jointly  and  severally  liable 
for  the  loss  sustained  thereby.  'Jhey  are  also  liable  for  illegal  declaration  of 
dividends  (S.  C.  L.,  sees.  22,  23,  25,  31,  48). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  personally  liable  to 
creditors  to  an  amount  equal  to  the  amount  of  unpaid  stock  held  by  them  for 
debts  of  the  corporation  contracted  while  such  stock  was  held  by  them ;  and 
are  jointly  and  severally  liable  for  all  debts  due  or  owing  to  laborers  or  ser- 
vants or  employees  other  than  contractors,  provided  written  notice  of  inten- 
tion to  enforce  such  liability  is  given  within  thirty  daj's  after  termination  of 
the  services  rendered  (S.  C.  L.,  sees.  54,  55  ;  as  to  liability  of  stockholders  in 
full  liability  corporations,  see  B.  C.  L.,  sec.  G). 

Billiugs  V.  Kobinsou,  94  N.  Y.  415  ;  Weeks  v.  Love,  50  N.  Y.  568  ;  Tucker  v.  Gil- 
man,  121  N.  Y.  189  ;  24  N.  E.  302. 

14.  Stock  Certificates.  —  Stock  certificates  must  be  signed  by  the  presi- 
dent or  vice-president,  and  by  the  secretary  or  treasurer  (S.  C.  L.,  sec.  40). 
Stock  certificates  are  not  transferable  without  the  consent  of  the  corporation, 
until  all  indebtedness  to  the  corporation  has  been  paid  (S.  C.  L.,  sec.  20).  The 
par  value  of  shares  may  be  any  amount  not  less  than  |5  nor  more  than  $100 
(B.  C.  L.,  sec.  2,  sub.  4). 

15.  Preferred  Stock.  —  Pieferred  stock  maybe  issued  if  the  certificate 
of  incorporation  so  provides  or  by  consent  of  the  holders  of  two-thirds  of  the 
capital  stock  given  at  a  meeting  duly  called  for  that  purpose.  The  corpora- 
tion may,  upon  the  written  request  of  the  holders  of  preferred  stock  by  a  two- 
thirds  vote  of  its  directors,  exchange  the  same  for  common  stock  (S.  C.  L., 

sec.  47). 

16.  Payment  of  Capital  Stock.  —  Corporations  cannot  issue  stock  except 
for  money,  labor  done,  or  property  actually  received  for  the  use  or  lawful  pur- 
poses of  the  corporation.  The  statute  provides  further  that  in  the  absence  of 
fraud  in  the  transaction  the  judgment  of  the  directors  as  to  the  value  of 
property  so  purchased  shall  be  conclusive  (S.  C.  L.,  sec.  42). 

White  Corbin  &  Co.  v.  Jones,  167  N.  Y.  158 ;  GO  N.  E.  422. 

17.  Books.  —  Every  corporation  must  keep  at  its  office  within  the  State 
correct  books  of  account  of  all  its  business  transactions,  and  also  a  stock  book, 
containing  an  alphabetical  list  of  the  stockholders  of  the  corporation,  show- 
ing their  places  of  residence  and  the  number  of  shares  held  by  them  respec- 
tively, the  time  when  they  respectively  became  owners  thereof,  and  the 
amount  paid  thereon  (S.  C.  L.,  sec.  29).  The  stock  book  is  open  to  the  in- 
spection of  stockholders  and  judgment  creditors. 

Matter  of  Steiiiway,  159  N.  Y.  250;  53  N.  E.  1103. 

334 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

18.  Office.  —  Every  corporation  must  maintain  a  domiciliary  office  within 
the  State  >I).  C.  L.,  sec.  2  ;  Tax  Laws,  sec.  11). 

19.  Reports.  —  All  domestic  business  corporations  must  annually  during 
the  month  of  January,  or,  if  doing  business  without  the  United  States,  before 
the  first  of  May,  make  a  report  as  of  the  first  day  of  January,  which  will 
state:  First,  the  amount  of  its  capital  stock  and  proportion  actually  issued. 
Second,  the  amount  of  its  debts,  or  an  amount  which  they  do  not  exceed. 
Third,  the  amount  of  its  assets  or  an  amount  which  its  assets  at  least  equal. 
Such  report  to  be  made  bj'  the  president  or  vice-president,  secretary  or  treas- 
urer, and  filed  in  the  office  of  the  Secretary  of  State.  If  such  report  is  not 
made  and  filed,  any  officer  of  the  corporation  who  shall  thereafter  neglect  or 
refuse  to  make  and  file  such  report  within  ten  days  after  written  request  so  to 
do  shall  have  been  made  by  a  stockholder  or  a  creditor  of  the  corporation, 
shall  forfeit  to  the  people  the  sum  of  8-"30  for  every  day  he  shall  so  neglect  or 
refuse.  In  addition  to  the  foregoing  the  corporation  is  recjuired  between  Novem- 
ber 1st  and  1.5th  to  make  an  annual  report  to  the  State  Comptroller  showing  the 
condition  of  the  business  on  October  ^Jlst  of  that  year,  stating  the  amount  of 
the  capital  stock  paid  in,  the  amount  of  its  dividends  declared  during  the 
year  ending  October  31st,  the  amount  of  its  entire  capital,  and  the  percentage 
thereof  employed  within  the  State  during  the  preceding  year.  This  report 
must  be  signed  and  sworn  to  by  the  president,  vice-president,  secretary,  or 
treasurer  (S.  C.  L.,  sec.  30  ;  Tax  Laws,  sec.  189).  After  each  annual  election 
of  directors  a  certificate  of  the  result  of  such  election  made  by  the  inspectors 
must  be  filed,  with  the  oath  of  the  inspectors,  in  the  office  of  the  clerk  of  the 
county  in  which  the  election  is  held  (S.  C.  L.,  sec.  28  ;  see  Union  Nat.  Bank 
r.  Scott,  53  -Vp.  IHv.  05:  see  also  S.  C.  L.,  sec.  52). 

20.  Anti-Trust  Statute.  —  The  Anti-Trust  Act  of  New  York  is  to  be 
found  in  Laws  of  IbO.O,  chap.  690. 

Matter  of  Davics,  168  X.  Y.  89;  61  X.  E.  118;  People  r.  Jlilk  Exchange,  133 
N.  Y.  565 ;  .30  X.  E.  850. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  — Charters  may  be 
forfeited  for  failure  to  organize  and  commence  the  transaction  of  corporate 
business  or  the  discharge  of  corporate  duties  within  two  years  from  the  date 
of  incorporation  ((i.  C.  L.,  sec.  31).  Also  if  one-half  the  capital  stock  is  not 
paid  in  within  one  year  (B.  C.  L.,  sec.  5).  Also  for  failure  to  pay  the  annual 
State  tax  within  one  year  from  the  time  a  statement  of  the  tax  is  sent  to  it 
(Tax  Law,  sec.  200;   see  also  Code  of   Civ.  Pro.,  sees.   1797-1803  inclusive). 

Day  V.  Company,  107  N.  Y.  29 ;  13  X.  E.  765  ;  People  v.  Company,  131  N.  Y.  140  ; 
29  X.  E.  947. 

22.  Annual  Franchise  Tax. — The  annual  franchise  tax  is  based  on  the 
amount  of  capital  stock  actually  eniployeil  within  the  State.  It  includes,  with 
some  few  exceptions,  all  personality  belonging  to  the  corporation  within  the 
State  and  the  corporate  good-will.  'i"hc  debts  of  the  corporation  are  first 
deducted  in  arriving  at  the  valuation.  If  dividends  are  declared  amoimting 
to  six  per  cent  or  more  on  the  amount  of  the  par  value  of  the  entire  issued 
capital  stock,  the  tax  is  one-fourth  of  a  mill  for  each  one  per  cent  of  dividends 
declared  on  each  dollar  of  capital  stock  employed  \\ithin  the  State.  If  div- 
idends are  less  than  six  per  rent  on  par  value,  one  and  one-half  mills  per 
dollar  upon  surh  proportioti  of  cajiital  stock  at  par  as  the  amount  of  cajiital 
em]>loyed  within  the  State  bears  to  the  entire  capital  of  the  corporation.  If 
no  dividend  is  declared,  the  tax  is  fixed  at  tlie  rate  of  one  and  one  half  mills 

1  •?  K. 


iNroi;riMiATioN  and  organization  of  COUrOltATlONS. 

upon  o;\oh  dollar  of  the  appraised  capital  employed  ^^•ithin  the  State.  I'aiiks, 
insurance  and  surety  coinpauies,  railroad,  gas,  light,  or  power,  steam  heat, 
aurioullural  and  horticultural  corporations,  and  surface  railroads  not  operated 
bv  steam  are  exempt.  Laundry,  manufacturing  corporal  ions,  to  the  extent  only 
of  the  capital  stock  employed  within  the  State  in  manufacturing  and  in  the 
sale  of  the  product  of  such  manufacturing,  and  mining  corporations  wholly 
engaged  in  mining  ores  within  tlie  State,  arc  exempt  from  this  tax  provided 
at  least  forty  per  cent  of  their  capital  stock  is  actually  invested  in  property 
in  this  State  (Tax  Laws,  sees.  162,  183,  189,  190).  A  corporation  is  taxed  on 
its  personal  property  only  in  the  county  designated  in  the  articles  as  the  place 
■where  its  principal  place  of  business  is  (Tax  Laws,  sec.  12). 

2:5.  Amendments.  — Corporations  may  change  their  names  only  by  six 
weeks'  publication  of  the  notice  of  intention  so  to  do  and  application  there- 
after to  the  Supreme  Court  for  an  order  authorizing  such  change.  The  pur- 
poses and  powers  of  the  corporation  may  be  enlarged  or  altered  by  a  vote  of 
three-fifths  of  the  capital  stock.  The  number  of  shares  may  be  increased  or 
diminished  by  vote  of  two-thirds  of  the  capital  stock.  The  capital  stock  may 
be  increased  or  decreased  by  majority  vote  of  the  stockholders  at  a  meeting 
duly  called  for  that  purpose  or  by  unanimous  consent  of  all  the  stockhoMers 
expressed  in  writing.  Directors  may  be  increased  or  diminished  by  a  major- 
ity vote  of  the  stockholders.  All  amendments  to  articles  are  required  to  be 
filed  in  the  same  offices  as  in  the  case  of  original  articles  (Laws  of  190:'>,  chap. 
320 ;  S.  C.  L.,  .sees.  21,  32,  44,  45;  G.  C.  L.,  sec.  6  ;  Laws  of  1904,  chaps.  110,  12:5). 

24.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended,  if  desired,  by  compliance  with  the  statute  (G.  C.  L.,  sec.  32). 

25.  Dissolution.  —  Voluntary  dissolution  may  be  brought  about  in  two 
ways:  First,  by  a  two-thirds  vote  in  interest  of  the  stockholders  favoring  dis- 
solution preceded  by  a  resolution  to  that  effect  passed  ^by  the  board  of  direc- 
tors ;  second,  by  application  to  the  Supreme  Court  (S.  C.  L.,  sec.  57;  Revised 
Stat.,  Part  TIL  chap.  8,  title  4,  sees.  66-89  inclusive;  Code  of  Civil  Procedure, 
sees.  1781-1796,  2419-2431).  The  charter  may  be  surrendered  by  the  incor- 
porators before  the  payment  of  any  part  of  the  capital  stock  and  before 
commencing  business  (Laws  of  1901,  chap.  29(5). 

26.  Foreign  Corporations.  —  Must  tile  with  the  Secretary  of  State  copy 
of  articles  of  incorporation  with  statement  of  business  carried  on  within  the 
State.  Cannot  begin  business  until  Secretary  of  State  issues  certificate  of 
authority.  Cannot  sue  in  State  without  having  first  secured  certificate  of 
authority.  Annual  reports  required  as  of  domestic  corporations.  Stock  book 
with  data  of  stockholders  must  be  kept  at  office  of  transfer  agent  in  State,  and 
shall  be  open  to  inspection  under  penalty  of  .$250.  Within  thirteen  months  of 
the  time  the  corporation  commences  to  carry  on  business  within  the  State  it 
must  pay  the  State  Treasurer  a  license  fee  of  one-eighth  of  one  per  cent  on 
the  amount  of  capital  stock  employed  by  it  in  the  State  during  the  first  year  of 
carrying  on  business  therein.  This  license  tax  is  payable  annually  thereafter. 
Permits  will  not  be  issued  if  foreign  corporation  has  same  name  as  that  of 
domestic  (G.  C.  L.,  sees.  15,  16;  S.  C.  L.,  sec.  53;  Code  of  Civ.  Pro.,  sees. 
432,  1779;  Tax  Laws,  sec.  181 ;  Laws  of  1904,  chap.  490). 

Demare-st  i-.  Flack,  128  N.  Y.  205 ;  28  N.  E.  64.5  ;  People  ex  rel.  H.  &  11.  Co.  v.  Camp- 
bell, 1.39  ^;.  Y.  68;  .34  N.  E.  753;  People  ex  rel.  S.  T.  Clock  Co.  v.  Wemple,  133  N.  Y. 
323;  31  N.  E.  2.38  ;  People  v.  A.  B.  T.  Co.,  117  N.  Y.  241  ;  22  N.  E.  10.57;  People  ex 
rel.  V.  Wemple,  138  X.  Y.  582 ;  34  N.  E.  386 ;  O'Reilly,  Skelly  &  Fogarty  Co.  v.  Greene, 
40  N.  Y.  360. 
336 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

NORTH    CAROLINA. 

(The  references  cited  below  are  to  chap.  2,  Laws  of  1901,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Xortii  Carolina  is  to  be  found  in  the  Ses.sion 
Laws  of  1901,  chap.  2.  Under  this  act  corporations  may  be  formed  for  any 
purpose  excepting  railroad,  insurance,  and  banking  corporations  (sec.  8). 

2.  Incorporators.  —  Any  number  of  persons  not  less  than  three.  There 
are  no  residential  requirements  (sees.  8,  36). 

3.  Contents  of  the  Certificate  of  Incorporation.  The  certificate  must 
set  forth : 

a.  Name.  —  No  name  can  be  used  already  in  use  by  another  domestic  corpo- 
ration. The  name  must  end  with  the  word  "  Company  "  (sec.  8,  sub.  1 ;  Laws 
of  190:J,  chap.  -l.J^). 

b.  Domicile.  —  Location  of  principal  office  witliin  the  State  (sec.  8,  sub.  2). 

c.  Purposes.  —  The  object  or  objects  for  vvhicli  the  corporation  is  formed. 
Any  number  of  purposes  may  be  inserted  in  the  certificate  (sec.  2,  sub.  3). 

d.  Capital  Stock.  —  Authorized  capital  stock  (unlimited).  Number  of 
shares  into  which  divided,  and  par  value  (any  amount)  thereof,  amount  of 
capital  stock  with  which  corporation  will  begin  business  (no  amount  limited  in 
the  act).  If  there  is  more  than  one  class  of  stock,  a  description  of  all  classes 
must  be  in.serted  together  with  terms  upon  which  created  (sec.  8,  sub.  4). 

e.  Stock  Subscfiptions.  —  Names  and  ]iost-office  addresses  of  subscribers 
for  stock  and  the  immber  of  shares  subscribed  by  each.  The  act  provides 
that  the  aggregate  of  such  subscriptions  shall  be  the  amount  of  capital  stock 
^vitll  which  the  corporation  will  begin  business  (sec.  8,  sub.  5). 

/.    Duration.  —  May  be  perpetual  (sec.  8,  sub.  6). 

{/.  Provisions  for  the  Regulation  of  the  Internal  Affairs  of  the  Corporation.  — 
Provisions  may  be  inserted  for  the  regulation  of  the  business  and  for  the 
purpo.se  of  creating,  defining,  limiting,  or  regulating  the  powers  of  the  corpo- 
ration, directors,  and  stockholders  (sec.  8,  sub.  7). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers  cor[)orations  have  the  following  additional  powers :  To 
authorize  voting  by  proxy;  to  forfeit  stock  for  non-payment  of  a.ssessmejits ; 
to  provide  suitable  penalties  for  violation  of  by-laws,  not  exceeding  $20  for 
any  one  offence  ;  to  delegate  the  power  to  directors  to  adopt  by-laws ;  to  issue 
preferred  stock  to  the  extent  of  one-half  of  actual  capital  paid  in  in  cash  or 
property  and  to  make  the  same  subject  to  redemption  ;  to  authorize  the  hold- 
ing of  directors' meetings  and  keeping  of  corporate  books,  except  stock  and 
transfer  books,  outside  of  the  State;  to  chussify  directors;  to  permit  cumulative 
voting  in  election  of  directors,  and  to  conduct  business  in  other  States  and 
foreign  countries:  to  i.ssiie  and  sell  bonds  for  less  than  par  (.sees.  1,  2,  3,  4, 
5,  12,  13,  14,  19,  24,  40;  Laws  of  1903,  chaps.  154,  mO). 

Iloggio  r.  A.'isociatioii,  107  N.  C.  .OSl  ;  12  S.  E.  27.5;  Mearcs  v.  Iinprovcnient  Co., 
120  X.  (".  ('.(;■_>  ;  .-JG  S.  }■;.   I.'U). 

5.  Procuring  the  Charter.  Incorporators  nuist  subscriln-  and  :i(knowlodge 
the  certificate  of  incorporation.  The  certificate  must  then  be  filed  and  recorded 
in  the  oMice  of  the  Secretary  of  Statt-,  the  organization  tax  bring  then  paid.  A 
certified  copy  of  the  certificate  and  probate  musi  br  fnrlhwith  recorded  in  the  of- 
fice of  the  clerk  of  the  superior  court  of  the  county  where  the  principal  ollice  of 
the  corporation  is  to  be  established  (sec.  9;  see  also  Laws  of  1903,  chap.  313). 

Ashvillo  ])iv.  v.  OstoD,  92  N.  C.  578. 

22  3:37 


INCOUrOUATIOX    AN'l)    ORGANIZATION    OF   CORPOIIATIONS. 

G.  Corporate  Indebtedness.  —  Tlieie  is  no  statutory  limitation  upon  the 
amount  ol'  coiiH)r;itc  iiuli'l'ti'ilnoss.  Tlie  law  expressly  permits  bonds  of  cor- 
porations to  W  solil  for  less  than  par  (Laws  of  I'JOo,  chap.  151). 

7.  Organization  Tax.  —  Twenty  conts  for  each  $1,000  on  tho  amount  of 
capital  stock  authorized,  but  in  no  case  less  than  ^25  (sec.  UG;  see  also  Laws  of 
1J)03,  chap.  93). 

8.  Filing  and  Recording  Fees.  —  For  recording  articles  in  the  otlice  of 
the  Secretary  of  .State,  $1  for  tiie  lirst  three  copy  sheets  and  10  cents  for  each 
additional  hundred  words.  For  certified  articles  of  incorporation,  $1  for 
the  first  three  copy  sheets  and  10  cents  for  each  additional  hundred  word.s. 
To  the  clerk  of  the  Superior  Court  for  preparing  certificate  of  incorporation 
Si  for  the  first  three  copy  sheets  and  10  cents  for  each  additional  sheet.  For 
filing  list  of  oHicers  and  directors,  $1. 

9.  Commencing  Business.  —  Corporations  may  commence  business  as 
soon  as  tlu'  certificate  of  incorporation  is  filed  as  required  by  law  (sec.  10). 
Within  thirty  days  after  the  election  of  the  first  board  of  directors  there  must 
be  filed  in  the  oflice  of  the  Secretary  of  State,  a  statement  authenticated  by 
the  signatures  of  the  president  and  secretary  containing  the  names  of  all  the 
directors  and  otficers  ^Yith  the  date  of  the  election  or  appointment,  term  of 
office,  residence  and  post-olTice  address  of  each,  the  character  of  its  business 
aud  location,  giving  the  street  and  number,  if  any,  of  its  principal  olfice  in  the 
State,  and  the  name  of  the  agent  in  charge  of  said  office  upon  whom  process 
may  be  served  (sec.  48).  Business  must  be  commenced  within  two  years 
from  the  time  certificate  is  filed  (sec.  106). 

10.  Organization  Meeting.  — The  organization  meeting  must  be  held 
within  the  State.  The  statute  provides  for  calling  the  same,  and  also  gives 
the  incorporators  the  direction  of  the  affairs  aud  organization  of  the  corpora- 
tion until  directors  are  elected  (sees.  11,  18). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  wifliin  the  State.  Directors'  meetings  may  be  held  without  the 
State  if  the  by-laws  so  provide  (sec.  40). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  a  board  of  not  less  than  three  directors.  At  least  one  of  them 
must  be  a  resident  of  the  State.  They  must  all  be  bona  fide  stockholders. 
Thev  mav  be  divided  into  classes,  ])rovided  no  class  is  elected  for  a  shorter 
period  than  one  year  or  for  a  longer  period  than  five  years  (sees.  14,  44). 

b.  Liabilities.  —  Directors  are  liable  for  the  illegal  declaration  of  dividends, 
for  neglecting  or  refusing  to  make  certificate  as  required  by  law  upon  tlie 
payment  in  full  of  each  instalment  of  the  capital  stock,  and  filing  the  same 
■within  ten  days  after  such  payment  in  the  office  of  the  Secretary  of  State. 
They  are  also  liable  for  not  publishing  notice  of  decrease  of  capital,  and  for 
illegal  voting  for  reduction  of  capital  (sees.  26,  27,  33,  53,  56,  65,  107). 

Solomon  v.  Bates,  118  N.  C  321 ;  24  S.  E.  746. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  their  unpaid 
stock  subsiriplions.  They  are  also  liable  for  fraud  committed  by  them,  to 
creditors  and  others  injured  thereby  (sec.  22). 

Harmonic.  Hunt,  116  N.  C.  678;  21  S.  E.  559;  Cooper  v.  Company,  127  N.  C.  219; 
37  S.  E.  216;  Cotton  MiUs  v.  Cotton  Mills,  116  N.  C.  647  ;  21  S.  E.  431. 

14.  Stock  Certificates.  —  Every  stockholder  is  entitled  to  a  certificate 
signed  by  the  president  and  treasurer  or  secretary,  specifying  the  number  of 
shares  held  by  him  in  the  corporation  (sec.  20). 

c;38 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

1").  Preferred  Stock.  —  Preferred  stock  may  be  issued  not  to  exceed  one- 
half  of  the  actual  capital.  It  may  be  created  with  such  preferences  and  voting 
powers,  restrictions  or  qualifications  thereof  as  shall  be  stated  and  expressed 
in  the  certificate  thereof.  Dividends  may  be  made  cumulative  if  desired,  and 
in  case  of  insolvency  holders  thereof  have  a  preference  over  the  holders  of 
common  stock  (sec.   19). 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  exchange  for 
money,  labor  done,  personal  property,  real  estate,  or  leases  thereof.  In  the 
absence  of  fraud  in  the  transaction,  the  judgment  of  the  directors  as  to  the 
value  of  such  labor,  property,  real  estate,  or  leases  thereof  shall  be  conclusive 
(sec.  19).  Corporations  may  purchase  mines  and  manufactories  and  issue 
stock  in  payment  therefor  to  the  amount  of  the  value  thereof,  and  the  stock  so 
issued  shall  be  full-paid  stock  and  not  liable  to  any  further  call.  In  the 
absence  of  fraud  the  judgment  of  the  directors  as  to  the  value  of  the  property 
so  taken  shall  be  conclusive.  Upon  the  payment  in  full  of  each  instalment 
of  capital  stock  a  certificate  setting  forth  the  particulars  thereof  verified  by 
the  president  and  secretary  or  treasurer  must  within  ten  days  after  such 
payment  be  filed  in  the  ollice  of  the  Seci'etary  of  State  (sees.  19,  26,  53, 
54,  65). 

17.  Books. — -ilustkeepat  its  principal  office  in  the  State  the  transfer 
books  and  the  stock  books  of  the  corporation  (sec.  o8).  These  are  open  to  the 
inspection  of  all  stockholders. 

18.  Office  and  Agent. —  Every  corporation  is  required  to  have  an  office 
within  the  State  where  its  name  nmst  be  displayed  in  conspicuous  letters. 
Must  have  an  agent  in  charge  of  its  principal  office  within  the  State  residing 
therein  (sees.  49,  50;  see  also  Laws  of  19U''5,  chap.  806). 

Simmons  v.  Steamboat  Co.,  113  N.  C.  147;  18  S.  E.  117. 

19.  Reports.  —  Annual  reports  must  be  filed  with  the  Secretary  of  State 
in  each  year  (sec.  48).  The  contents  of  the  report  is  similar  to  that  re- 
quired under  tlie  New  Jersey  Act.     (See  ante,  sec.  9.) 

20.  Anti-Trust  Statute.  —  There  is  a  somewhat  drastic  anti-trust  statute 
in  force  in  Xorlh  Carolina  (Laws  of  1S99,  chap.  066). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  may  be 
forfeited  for  failure  to  bring  the  books  of  the  corporation  into  the  State  after 
an  order  to  that  effect  made  by  the  superior  court  U[)on  proper  cause  shown. 
Charter  may  also  be  dissolved  by  the  State  for  abuse,  misuser,  or  non-u.'<er  of 
its  corporate  powers  and  privileges  and  for  violation  of  tiie  anti-trust  statute. 
Also  for  assuming  or  exercising  any  franchise  or  transacting  any  business  not 
alloweil  by  its  charter  (sec.  49,  Laws  of  1.S99,  chap.  66,  sec.  5;  I^aws  of  1901, 
chap.  2,  sec.  107).  Charter  may  also  be  forfeited  if  the  corporators  for  two 
years  should  m-glcct  or  fail  to  organize  the  company,  or  when  organized  if  they 
for  two  yt^ars  at  any  time  shall  cease  to  act  (sec.  106). 

Cotton  Mills  V.  Hums,  114  N.  C.  353 ;  19  S.  E.  238. 

22.  Amendments.  —  Charters  may  be  amended  for  any  purpose  desired 
both  before  and  after  organization  (sees.  28,  29,  32;  see  also  Laws  of  1903, 
chap.  510). 

23.  Extension  of  Corporate  Existence.  —  Corporation  may  extend  its 
corporate  existence  for  any  period  de.sired  (sees.  29,  37). 

24.  Dissolution. —  A  corporation  may  dissolve  by  nmtu.ii  consent  upon 
the  vote  of  two-tiiirds  in  inten-st  of  the  stoi-khnlders  (sees.  34,  59-65 
inclusive).     The  charter  may  be  surrendered  by  the  incoqjorators  before  the 

339 


INCORrOriATIOX    AND    ORCANIZATION    OF    CORPORATIONS. 

payment  of  any  part  of  the  capital  and  before  beginning  bnsiness  by  conii>ly- 
ing  with  tlie  statute  in  sucli  case  made  and  provided  (sec.  35). 

25.  Annual  License  Fee.  —  Where  tlio  cori>oralion  lias  a  capital  stock 
of  §-25,000,  tlie  annual  tax  is  -f 5 ;  up  to  |50,000,  ij^lO;  up  to  1 100,000,  ffft-JS  ; 
up  to  S-250,000,  650  ;  up  to  $500,000,  $100;  up  to  |1, 000,000,  $200;  over 
SI. 000,000,  S500  (Act  of  March  15,  l!)01,  ehap.  9,  sec.  91 ;  Laws  of  1003,  chap. 
217,  sec.  81). 

26.  Foreign  Corporations.  —  Foreign  cor]iorations  nnist  file  with  the 
Secretary  of  State  a  copy  of  their  charter  attested  by  the  president  and 
secretary  under  the  corporate  seal,  and  accompanied  by  a  statement  attested  in 
like  uiai\ner  setting  forth  the  amount  of  capital  stock  authorized,  amount 
issued,  location  of  principal  ollice  in  the  State,  and  name  of  agent  in  charge 
thereof,  character  of  the  business  to  be  transact(^d,  and  name  and  post-office 
addresses  of  officers  and  directors.  Such  corporations  must  also  pay  a  tax  of 
10  cents  per  thousand  dollars  on  authoi-ized  capital  stock,  provided  however 
that  the  same  shall  never  be  less  than  f  10  nor  more  than  SlOO  (Laws  of  1903, 
chap.  766). 

Debuara  v.  Company,  126  N.  C.  831;  36  S.  E.  269;  Howard  v.  Association,  12,5 
N.  C.  49 ;  34  S.  E.  199 ;  Commissioners  v.  Company,  128  N.  C.  558  ;  39  S.  E.  18  ;  Shields 
I'.  Life  lus.  Co.,  119  N.  C.  380;  25  S.  E.  951. 


NORTH   DAKOTA. 

(The  references  cited  below  are  to  the  Revised  Code  of  1899  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. — 
The  Bnsiness  Corporation  Act  of  North  Dakota  is  to  be  found  in  the  Revised 
Code  of  1899,  sees.  2S50-3265  I),  as  amended  by  the  Session  Laws  of  1901. 
Under  this  act  corporations  may  be  formed  for  any  purpose  for  which  in- 
dividuals may  lawfully  associate  themselves,  except  that  special  acts  are  pro- 
vided for  railway,  wagon  road,  insurance,  bridge,  agricultural,  fair,  and 
eleemosynary  corporations  (sec.  285S).  There  are  some  special  provisions  ap- 
plicable to  mining  and  manufacturing  companies  (sees.  3154,  3161). 

2.  Incorporators.  —  Not  less  than  three,  one-third  of  whom  must  be 
residents  of  the  State  (sec.  2858). 

3.  Contents  of  the  Articles  of  Incorporation.  The  articles  must  set 
forth: 

a.  Name. — There  is  no  statute  expressly  forbidding  the  use  of  a  name 
already  in  use  by  another  domestic  corporation,  but  the  power  is  assumed  by 
the  Secretary  of  State  to  refuse  articles  attempting  to  make  use  of  such  name 

b.  Purposes.  —  Purpose  for  which  it  is  formed.  The  Secretary  of  State 
permits  the  insertion  of  any  number  of  purposes  in  the  articles  not  covered  by 
special  acts  (sees.  2861,  3155). 

c.  Domiciliary  Office. — Place  where  its  principal  business  is  to  be  transacted. 

d.  Duration.  —  Term  for  which  it  is  to  exist,  not  exceeding  twenty  years. 

e.  Directors.  —  Number  of  directors  and  nanies  and  residences  of  those 
who  are  to  serve  until  their  successors  are  elected  and  qualify. 

/.  Capital  Slock.  —  Amount  of  capital  stock,  number  of  shares  into  which 
it  is  diviiled.     Both  may  be  any  amount  desired  (sec.  2801). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  granted :  To  authorize 
vutliig  Vty  proxy ;  to  forfeit  stock  for  non-payment  of  assessments ;  to  own 

340 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

its  own  stock  ;  to  provide  penalties  for  violation  of  by-laws  not  to  exceed 
$100  ;  to  permit  cumulative  voting;  and  to  remove  directors  (sees.  2875,  2880, 
2882,  2884,  2888,  2894,  2895,  2917-2935). 

Tourtelot  v.  Whithead,  9  N.  D.  407  ;  84  N.  W.  8. 

5.  Procuring  the  Charter.  —  The  charter  must  be  subscribed  and  ac- 
knowledged by  tlie  incorporators.  The  articles  must  then  be  filed  with 
the  Secretary  of  State  (sees.  28G4,  2867).  There  must  be  filed  with  the 
Secretary  of  State  a  duplicate  receipt  of  the  State  Treasurer  showing  pay- 
ment of  organization  tax.  When  all  these  formalities  have  been  complied 
with,  the  Secretary  of  State  issues  a  certificate  of  incorporation.  Collateral  in- 
quiry into  the  legality  of  corporate  existence  is  forbidden  (sees.  2852,  2867). 

6.  Corporate  Indebtedness. — Corporate  indebtedness  must  not  exceed 
the  amount  of  subscribed  capital  stock.  P^xpress  authority  is  given  to  issue 
bonds  (pecs.  2891,  290.')). 

7.  Organization  Tax.  —  For  capitalization  up  to  .$50,000,  fee  of  §50 
to  be  paid  to  the  State  Treasurer  and  $5  for  every  additional  <S10,000  or 
fractional  part  thereof.  This  schedule  of  fees  does  not  apply  to  corpora- 
tions for  the  manufacture  of  dairj'  products,  agricultural  fair  corporations, 
building  and  loan  associations,  county  mutual  insurance  companies  or  to  cor- 
porations whose  capitalization  does  not  exceed  $5,000  formed  for  the  purpose 
of  the  purchase  of  male  animals  for  the  improvement  of  stock. 

8.  Filing  and  Recording  Fees.  —  Filing  fees  in  the  office  of  the  Secretary 
of  State,  SJo  ;  for  i.ssuing  certilicate  of  incorporation,  $3 ;  for  certified  coj^y 
of  articles  of  incorporation  where  copy  is  prepared  for  that  purpose,  §1 
(Laws  of  1901,  chap.  93). 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as 
the  articles  are  executed  and  filed  as  required  by  law  (sec.  2868).  By-laws 
must  be  adopted  within  one  month  after  filing  articles  (sec.  2883).  The 
corporation  must  organize  and  commence  business  within  one  year  after 
filing  articles  (sec.   2913). 

10.  Organization  Meeting.  —  In  the  absence  of  a  provision  in  the 
articles  providing  othi;rwisc  the  organization  meeting  must  be  held  within 
the  State  (sec.  2898).  By  making  provision  in  the  articles  tlierefor  all 
meetings  may  be  held  without  the  State,  at  some  place  within  the  United 
States  (see.  31Gl»). 

11.  Meetings  of  Stockholders  and  Directors  — In  tlie  absence  of  a 
jTOvision  in  the  articles  providing  otherwise  meetings  of  stockholders  and 
directors  for  the  election  of  officers  of  the  corporation  must  be  hold  at  its 
jirincipal  place  of  business  within  the  State.  Other  meetings  of  the  board  of 
directors  may  be  held  at  such  place  within  or  without  the  State  as  the  by- 
laws may  provide  (sees.  2898,  2899,  2903).  By  making  provision  in  the  articles 
therefor,  all  meetings  may  be  held  without  the  State  at  some  place  within 
the  United  States  (sec.   3160). 

12.  Directors' Qualifications  and  Liabilities,  a.  Quail /iratlntis.  — 'lliQiv 
must  be  at  least  three  anrl  not  more  than  t-ievcii  directors,  all  of  whom  mu»t 
b  ;  .stockholders,  and  one  a  resident  of  the  State  (sec.  2889). 

h.  Lifthilififs.  —  Directors  are  liable  to  creditors  to  tlio  extent  of  the 
amount  of  debts  in  excess  of  (he  sub.scribcd  caj)ital  stock.  Tliey  are  also 
liable  for  the  declaration  of  illegal  <lividi'nds.  Express  provision  is  made; 
in  the  act  for  their  removal  from  office  (sees.  2^91,  2.S92,  2891).  Directors 
are  also  liable  for  illegal  issue  of  bonds  (sec.  2905).     Directors  in  mining  and 


INCOnronATION    and    OUGANTZATION    of    COUrOUATIONS. 

nianuraotnring  ooinpaiiios  arc  liable  for  violations  of  law  which  result:  in 
iiisolvoiiCY  of  tiie  company  (sec.  iJKil).  Tliere  is  also  a  liability  for  issuing 
stock  at  loss  than  jxir  value  paid  thereon   (sec.  2S7(i). 

l;5.  Stockholders'  Liabilities.  —  StockhoMers  are  liable  to  the  extent 
of  their  unpaid  stock  subscriptions.  Stockholders  of  manufacturing  and 
mining  corporations  are  jointly  and  severally  liable  for  all  debts  to  me- 
chanics, workmen,  and  laliorers  employed  by  such  corporation  (sees.  2902,  3157). 

11.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
showing  the  number  of  shares  owned  by  him,  signed  by  the  president  and 
secretary  (sees.  2876,  2001). 

15.  Preferred  Stock.  —  The  act  does  not  expressly  authorize  the  issuance 
of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  for  money,  labor 
done,  or  property  estimated  at  its  true  money  value  actually  received  by  it. 
All  officers  who  consent  to  the  issuance  of  stock  for  labor  or  property  in  excess 
of  its  actual  cash  value,  or  who,  having  knowledge  thereof,  do  not  formally 
dissent  therefrom,  are  jointly  and  severally  liable  to  creditors  of  such  corpo- 
ration for  the  difference  between  the  actual  value  of  such  labor  or  property  at 
the  time  the  stock  was  issued  and  the  par  value  of  the  stock  issued  therefor. 
Corporations  are  expressly  forbidden  to  accept  notes  in  payment  of  stock  sub- 
scriptions (sees.  2877,  2878).  Corporations  are  expressly  forbidden  to  issue 
stock  with  the  understanding  that  the  full  par  value  shall  not  be  paid  (sec. 
2876).  The  act  provides  that  the  directors  named  in  the  certificate  of  incor- 
poration shall  proceed  to  open  books  of  subscription  to  the  capital  stock  then 
unsubscribed,  and  to  secure  subscriptions  to  the  capital  stock  still  unsub- 
scribed, and  to  secure  subscription  to  the  full  amount  of  the  fixed  capital 
(sec.  2S71). 

17.  Books.  —  The  corporation  records  must  be  kept  at  the  principal  office 
within  the  State.  Also  stock  register,  book  of  by-laws,  and  books  of  account 
(sees.  28S.>,  2907,  3156).  They  are  open  to  the  inspection  of  stockholders 
and  creditors. 

18.  OfSce  and  Agent.  —  All  corporations  must  maintain  an  office  within 
the  State,  and  an  agent  to  receive  process  (sees.  28(31,2885,  2907,  3160,  ;>265a), 

19.  Reports.  —  No  reports  are  necessary. 

20.  Anti-Trust  Statute.  —  There  is  a  more  or  less  effective  anti-trust 
statute  in  force  in  North  Dakota  (sees.  7180-7484). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  may  be 
forfeited  for  entering  illegal  trusts  and  combiiuitions.  It  may  also  be  forfeited 
for  misuser  or  non-user  by  proper  action  taken  by  the  State.  Also  for  failing 
for  one  year  to  transact  its  usual  business  within  the  State,  or  failing  for  one 
year  to  keep  and  maintain  a  public  office  at  its  principal  place  of  business 
within  the  State  for  the  transaction  of  its  usual  and  regular  business  and  at 
the  same  time,  by  instrument  duly  filed  in  the  Secretary  of  State's  office,  ap- 
pointed the  la.st-named  officer  its  resident  agent,  upon  whom  process  may  be 
served  (sees.  3265  a,  7480-7484).  Also  for  failure  to  organize  and  commence 
business  within  one  year  (sec.  2913). 

22.  Amendments.  —  Articles  may  be  amended  for  the  purpose  of  increas- 
ing or  decreasing  the  capital  stock  or  for  any  other  purpose  desired  (sees.  2905, 
2908,  2910,  2911). 

23.  Extension  of  Corporate  Existence.  —  Corporations  may  be  ex- 
tended for  an  additional  period  of  twenty  years  if  desired  (sec.  3259). 

342 


SYNOPSIS-DTGEST   OP   INCORPORATION   ACTS. 

24.  Dissolution.  —  Dissolution  may  be  had  through  the  district  court  by 
the  State  or  by  a  private  per.^on  in  the  name  of  the  State  (sees.  2!)12,  2913, 
2914;  Laws  of  1903,  chap.  59). 

25.  Annual  License  Fee.  —  There  is  no  annual  license  fee. 

26.  Foreign  Corporations.  —  Foreign  corix)rations  must  file  articles  of 
incorporation  and  execute  a  power  of  attorney  to  Secretary  of  State  to  receive 
process  before  commencing  business  (.sees.  3261,  3263).  They  must  also 
maintain  an  office  within  the  State  (Cons.,  Art.  VII.  sec.  136). 

G.  p.  L.  Co.  V.  Company,  6  N.  D.  276;  69  N.  W.  691  ;  Nat.  Cash  Register  Co.  v. 
Wilson,  9  N.  1>.  112  ;  81  N."W.  285;  Washburn  MUls  Co.  v.  Bartlett,  3  N.  D.  138  54 
X.  W.  544. 

OHIO. 

(The  references  cited  below  are  to  Bates's  .Annotated  S\'itiitcs,  1004,  unless  otherwise  stated.) 

1.  Statutes  under  w^hich  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Ohio  is  to  be  found  in  the  Revised  Statutes 
of  Oiiio,  190t,  sees.  3232,  3269-3274  inclusive;  also  sees.  3855-3867.  Cor- 
porations may  be  organized  for  any  purpose  for  which  individuals  may  law- 
fully associate  themselves,  excepting  for  carrying  on  professional  business 
(sec.  3235). 

2.  Incorporators.  —  Not  less  than  five,  a  majority  of  whom  must  be  citi- 
zens of  Ohio  (sec.  3236). 

IIe.s.slcr  /•.  Company,  61  Ohio  St.,  621  ;  50  X.  E.  409. 

3.  Contents  of  Articles  of  Incorporation.     The  articles  must  set  forth: 
a.    Name.  —  The  name  must  begin  with  the   word  "  The  "  and  end  with 

the  word  "Company."  Similarity  of  names  as  between  domestic  corpora- 
tions is  forbidden  (sec.  3236,  sub.  1;  sec.  3238). 

h.  Domicile.  —  Place  where  it  is  to  be  located,  and  where  its  principal 
business  is  to  be  located  (sec.  3236.  sub.  2). 

c.  Purpnsex.  —  The  purpose  for  which  it  is  formed.  This  provision  is 
construed  by  the  Secretary  of  State  to  forbid  the  incorporation  of  companies 
for  more  than  one  purpose  (sec.  32:56,  sub.  3). 

(I.  Capital  Stock.  —  Amount  of  its  capital  stock.  Number  of  shares. 
Capitalization  and  par  value  may  be  any  amount  (sec.  3236,  sub.  1). 
If  a  corporation  desires  to  do  away  with  cuintiiative  voting  provided 
for  by  the  act,  a  provision  must  be  inserted  in  the  articles  expressly  pro- 
viding that  each  share  of  stock  shall  be  entitled  to  one  vote  and  no  more 
(sec.  -3215  a).  Provision  may  br-  inserted  in  subdivision  d,  providing  for  the 
issuance  of  jireferrcd  stock  and  that  the  holders  thereof  shall  be  entitled  to 
dividends  of  eight  per  cent  per  annum  in  eacli  y<'ar  in  preference  to  all  other 
.stockholders  (sec.  .3235  a). 

Duration  may  be  perpetual  except  for  corporations  engaged  in  buying  and 
selling  real  estate,  which  are  limited  to  twenty-five  years  (sec.  .3235). 

4.  Statutory  Pcwers.  —  In  addition  to  the  statutory  enumeration  of 
common  law  powers,  tlu;  following  additional  powers  are  granted  :  To  issue 
preferred  stock,  to  authorize  voting  by  proxy  in  the  eieetinn  of  directors,  also 
for  cumulative  voting  in  the  election  of  directors  if  desired,  for  forfeiture  of 
stock  for  nonpayment  of  assessments,  and  for  con.solidating  with  other  cor- 
porations. May  hold  stock  in  other  non-competing  corporations  (sees.  3256, 
3239,  3235,  3244,  3215,  32.53).     Mainifacturing  corporations  may  subscribo 

343 


INCOKPORATION    AND    OROANIZATION    OF   CORPORATIONS. 

for  stock  ill  railroad  and  transportation  companies  (sec.  3803).  Mining  and 
niannfacluriiii:;  corpoiatiinis  may  liold  and  convey  real  estate  and  transact 
business  outside  of  tlie  State  (sec.  38G"J). 

Greene  r.  Company,  f.2  Ohio  St.  67  ;  56  N.  E.  642;  Lander  v.  Burke,  6.'j  Ohio  St. 
r)32  ;  63  N.  E.  69. 

5.  Procuring  the  Charter.  —  Articles  must  be  subscribed  and  acknowl- 
edged by  each  of  tlie  incorporators,  and  the  oHiciai  character  of  the  ollicer 
taking  the  acknowledgment  must  be  certified  to  by  tlie  clerk  of  the  common 
pleas  of  the  county  wherein  taken.  The  articles  must  then  be  filed  in  the 
ortice  of  the  Secretary  of  State  (sec.  3236,  323S). 

State  e.r  rel.  v.  lus.  Co.,  49  Ohio  St.  440 ;  31  N.  E.  658 ;  Society  Ternn  v.  Cleveland, 
43  Ohio  St.  481;  3  N.  E.  357. 

6.  Corporate  Indebtedness.  —  Corporate  indebtedness  must  not  exceed 
the  amount  of  its  authorized  capital  stock.  Provision  may  be  made  in  the 
case  of  mortgage  indebtedness  where  the  same  does  not  exceed  one-half  of 
the  capital  stock  actually  paid  in,  that  the  holders  of  the  debt  secured  by  such 
mortgage  shall  have  the  right  to  convert  the  same  into  either  common  or 
preferred  stock  (sees.  3256,  3257). 

7.  Organization  Tax.  —  Corporations  having  authorized  capital  stock  of 
SIO.OOO  or  under,  §10;  corporations  with  more  than  $10,000,  one-tenth  of  one 
per  cent  on  such  capital  stock  (sees.  148,  148  a). 

8.  Filing  and  Recording  Fees.  —  The  payment  of  the  organization  tax 
includes  all  filing  and  recording  fees  in  the  Secretary  of  State's  office;  for 
certificate  of  incorporation,  $5.  The  cost  of  filing  certificate  of  subscription 
is  'S2.  For  making  certificate  under  the  Great  Seal  of  the  State,  f  1.  For 
recording  miscellaneous  papers,  20  cents  per  folio.  For  making  copies,  10  cents 
per  folio.     For  affixing  .seal  of  office  to  copies,  50  cents. 

9.  Commencing  Business.  —  As  soon  as  ten  per  cent  of  the  capital  stock 
is  subscribed  a  majority  of  the  directors  must  certify  in  writing  to  the  Secre- 
tary of  State  such  fact,  and  thereupon  call  a  meeting  of  the  stockholders  for  the 
purpose  of  choosing  not  less  than  five  nor  more  than  fifteen  directors.  As  soon 
as  these  directors  are  elected  and  have  organized,  tlie  corporation  may  com- 
mence business.  Business  must  be  commenced  within  five  years  after  date 
of  incorporation  (sees.  3243,  3244,  6780  ;  Laws  of  U)04,  p.  170). 

State  ex  rel.  v.  Ins.  Co.,  49  Ohio  St.  440;  31  N.  E.  658. 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State  at  such  time  and  place  as  the  by-laws  may  prescribe  (sec. 
3252). 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meetings 
must  be  held  within  the  State.  Directors'  meetings  may  be  held  without  the 
State  if  the  by-laws  so  provide  (sees.  3238  a,  3252). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualijicniions.  —  There 
must  be  not  less  than  five  nor  mon;  than  fifteen  directors.  All  must  be  stock- 
holders and  a  majority  residents  of  Ohio.  The  statute  expressly  authorizes 
the  directors  to  adopt  a  code  of  by-laws  for  their  own  management.  The 
directors  must  each  subscribe  to  an  oath  of  office  (.sees.  3244,  3247,3248,  3250). 

b.  Directors  are  liable  for  the  illegal  declaration  of  dividends  (sees.  3269, 
1-4).  They  are  also  personally  liable  for  contracting  debts  before  ten  per 
cent  of  the  capital  stock  has  been  subscribed. 

Trust  Co.  V.  Floyd,  47  Ohio  St.  525;  26  N.  E.  110. 
344 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

13.  Stockholders'  Liabilities.  —  Since  the  Constitutional  Amendment 
adojjted  in  1903,  stockholders  in  Oliio  corporations  are  only  liable  to  the  ex- 
tent of  their  unpaid  stock  subscriptions.  (See  former  statute,  sec.  3258  ;  see 
also  Laws  of  19ul,  p.  396.) 

Wick  Nat.  Bauk  v.  Uuion  Nat.  Bank,  62  Ohio  St.  446  ;  57  N.  E.  320 ;  Kulp  v.  Flem- 
ing, 65  Ohio  St.  321 ;  62  N.  E.  334;  Boice  v.  Hodge,  51  Ohio  St.  236 ;  37  X.  E.  265. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  have  a  stock 
certificate  issued  to  iiini,  siyned  by  the  president  and  secretary  (sec.  3254). 

15.  Preferred  Stock. —  Preferred  stock  is  expressly  authorized  by  pro- 
viding tlierefor  in  the  articles  of  incorporation  or  by  subsequent  action  of  the 
stockholdt'rs.  Holders  of  preferred  stock  are  entitled  to  dividends  not  to 
exceed  eight  per  cent  per  annum  out  of  the  surplus  profits  in  preference  to  all 
other  stockholders.  At  no  time  can  the  preferred  stock  exceed  two-thirds  of 
the  actual  stock  paid  in  in  cash  or  property  (sees.  3235  a,  3263). 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  only  for  money  or 
property.     (See  sec.  3235  a.) 

17.  Books.  —  Must  keep  a  stock  book  open  to  inspection  of  stockholders 
in  which  is  recorded  subscriptions  and  transfers  of  stock.  Minutes  of  the 
stockholders'  and  directors'  meetings  must  be  kept  (sec.  3254).  Manufac- 
turing companies  must  keep  their  books  of  account  at  their  principal  office. 
This  is  open  to  inspection  of  assessors. 

C  V.  Co.  /■.  Iloffmcistcr,  62  Ohio  St.  189  ;  56  N.  E.  1033. 

18.  Office  and  Agent.  —  Every  corporation  must  maintain  an  office  and 
agent  to  receive  service  of  process,  and  keep  accounts  of  financial  conditions 
and  also  transfer  books  (sees.  3236,  3855,  5651). 

Mercaiitilo  Tr.  Co.  v.  Elsa  Iron  Works,  4  Oliio  Cir.  Ct.  579. 

10.  Reports.  —  During  May  a  report  nuist  be  filed  with  the  Secretary  of 
State,  cdiitaining  among  otlier  things  names  and  addresses  of  the  officers  and 
directors;  amount  of  capital  stock  subscribed,  issued,  outstanding,  and  paid 
in;  kind  of  business  engaged  in.  Annual  reports  must  also  be  made  to  stock- 
holders (sees.  32GS,  :J269;'  Laws  of  1902,  p.  124). 

20.  Anti-Trust  Statute.  —  Ohio  has  a  somewhat  drastic  anti-trust  statute 
on  its  st;itute-liooks  (.sees.   1127,  1-12). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  by  the  State  for  misuser  or  non-user  for  five  years,  or  for  violation  of 
tiie  anti-trust  act,  or  for  failure  to  pay  annual  license  tax  (sees.  4427-4432, 
6700,  G7G1,  G780;  Laws  of  1904,  pp.  381-383). 

State  r.  Cumiiatiy,  62  Ohio  St.  350;  57  N.  E,  62. 

22.  Amendments.  —  Articles  may  be  ameiulcd  so  as  to  increase  or  de- 
crease the  cajtital  stock,  change  the  corporate  name,  the  domiciliary  office,  to 
enlarge  or  diminish  the  objects  or  purposes  for  which  it  is  formed  or  to  add 
thereto  or  cliange  tlic  par  value  of  shari's,  but  the  articles  cannot  be 
amended  so  as  to  change  the  original  purpo.ses  of  its  organization  (sees.  3238, 
3238  a,  3262.  3267,  3856,  3867,  58.V2-58.17). 

23.  Extension  of  Corporate  Existenco.  — ThiTe  is  no  provision  fur  ex- 
tension of  corfiorate  existence. 

24.  Dissolution.  —  A  majority  of  tlio  managing  l)oard  or  stockiiolders 
representing  one-tliird  of  the  capital  stock  may  ajiply  to  the  court  of  common 
pleas  for  dissolution  (R.  S.,  sees.  5G51-5GS8  inclusive;  O.  !<.,  1902,  p.  274). 
Charters  may  be  surrendered  if  desired  before  any  instalment  of  capital  stock 

;345 


INCOUrOUATlON    AND    ORGANIZATION    OF    COUrOR ATIONS, 

has  boon  paid  in  or  debts  inouired,  by  complying  with  the  statute  in  sucli  case 
mado  and  provided  (soc.  fid/l;  Laws  of  l!)Ul,  p.  383). 

2r>.  Auiuial  License  Fee.  —  One-tenth  of  one  per  cent  upon  subscribed 
or  issueil  and  outstanding  stock  (sees.  '2780-24). 

*J0.  Foreign  Corporations.  —  Before  commencing  to  transact  business 
within  tlu>  Slate  I'vcry  foreign  corporation  must,  under  oath  of  its  president, 
socretarv,  treasurer,  superintendent  or  managing  othcer  witliin  tlie  State,  nuike 
and  iile  with  the  Secretary  of  State  a  statement  containing  the  following 
facts  :  (I)  Number  of  shares  of  autliorized  capital  stock  and  par  value  thereof ; 
(2)  Name  and  location  of  the  olfice  and  ollicers  of  the  company  in  Ohio,  and  the 
name  and  address  of  the  officers  or  agents  of  the  company  in  charge  of  its  busi- 
ness in  Ohio;  (3)  The  value  of  the  property  owned  and  used  by  the  company 
in  Ohio,  where  situate,  and  the  value  of  tlie  property  owned  and  used  outside  of 
Ohio ;  (4)  The  proportion  of  tlie  capital  stock  of  the  company  which  is  repre- 
sented by  property  owned  and  used  and  by  business  transacted  in  Ohio.  There- 
npon  the  Secretary  of  State  shall  determine  the  proportion  of  the  capital  stock 
repre.sented  by  property  and  business  in  Ohio  and  shall  impose  and  collect  a 
tax  of  one-tenth  of  one  per  cent  upon  the  proportion  of  the  authorized  capital 
stock  of  the  corporation  r(;presented  by  property  owned  and  used  and  business 
transacted  in  Ohio.  Foreign  corporations  transacting  business  without  a  per- 
mit are  subject  to  fine  and  are  cut  off  from  all  recourse  to  the  courts.  The 
law  however  provides  that  foreign  corporat^ions  obtaining  a  permit  shall  not  be 
subject  to  attachment  as  a  foreign  corporation  (Laws  of  1904,  p.  383). 

W.  U.  Telegraph  Co.  v.  Mayer,  28  Oliio  St.  521 ;  Clarke  v.  C.  R.  R.  &  B.  Co.  et  al., 
50  Fed.  Rep.  3.38  ;  Toledo,  etc.  Co.  v.  Glum,  etc.  Co.,  55  Ohio  St.  217  ;  45  N.  E.  197  ;  Gen. 
Electric  Co.  v.  Lima  Electric  Co.,  4  Ohio  Nisi  Priiis  Rep.  167  ;  State  v.  Sherman,  22 
Ohio  St.  411 ;  Lander  r.  Burke,  65  Oliio  St.  532 ;  63  N.  E.  69. 

OKLAHOMA. 

(The  references  cited  below  are  to  the  Oklahoma  Statutes  (1893),  chap.  17,  unless  other- 
wise stated.) 

1 .  Statutes  under  which  Business  Corporations  may  incorporate.  — 
The  Busine.ss  Corporation  Act  is  to  be  found  in  chap.  17,  arts.  1  to  12  of  the 
Statutes  of  1893.  Parties  may  incorporate  under  the  General  Act  for  the 
following  purposes:  Mining,  manufacturing,  and  other  industrial  pur.suits, 
the  construction  of  railroads,  wagon  roads,  street  railways,  electric  light, 
power  and  gas  plants,  water  works,  irrigating  ditches,  eleemosynary  purposes, 
for  conducting  the  business  of  insurance,  banks  of  discount  and  deposit  (but 
not  of  issue),  building  and  investment  companies,  loan,  trust,  and  guarantee 
corporations,  merchandising,  wholesale  or  retail  or  both;  for  the  purpose  of 
locating,  laying  out  and  improving  town  sites,  and  buying  and  selling  real 
estate  therefor,  including  the  sale  and  conveyance  of  the  same  in  lots,  sub- 
divisions, or  otherwise.  For  the  purpose  of  constructing  telegraph  and  tele- 
phone lines  and  .sy.stems,  and  the  organization  and  maintenance  of  commercial 
clubs  and  business  exchanges,  and  for  the  purpose  of  constructing  sewers  and 
other  municipal  improvements  (sec.  12  as  amended  by  Laws  of  1903,  chap.  9). 

2.  Incorporators.  w_  Not  less  than  three,  one-third  of  whom  must  be  resi- 
dents of  the  Territory  (sec.  12  as  amended  by  Laws  of  1903,  chap.  9). 

3.  Contents  of  the  Articles  of  Incorporation.    'Jlie  articles  must  set  forth : 
a.   Name.  —  The  Secretary  of  the  Territory  will  not  permit  two  domestic 

corporations  of  the  same  name. 

:J1G 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

h.  Purpo>!es.  —  Purposes  for  -which  it  is  formed.  State  officials  allow 
articles  to  pass  allowing  incorporation  for  different  lines  of  industrial  business 
so  long  as  they  do  not  conflict  with  any  special  statute  in  regard  to  the  organi- 
zation of  corporations. 

c.  Domicile.  — The  place  where  the  principal  business  is  to  be  transacted. 

d.  Duraiion.  — The  term  of  existence  of  corporations  formed  for  manu- 
facturing and  other  industrial  pursuits  is  limited  to  twenty  years. 

e.  Directors.  —  Number  of  directors  and  names  and  residences  of  those  who 
are  to  serve  until  formal  election  of  the  first  board  of  directors.  The  quali- 
fications of  the  directors  must  also  be  set  forth. 

/.  Capital  Stock.  —  The  amount  and  number  of  shares  into  which  it  is 
divided.  Both  the  capital  and  the  par  value  of  shares  may  be  any  amount 
(sec.  li). 

4.  Statutory  Po-wers.  —  In  addition  to  the  enumeration  of  common  law 
powers  the  statute  confers  the  following  additional  powers  :  To  purchase  its 
own  shares,  to  vote  by  proxy  ;  to  have  a  business  office  without  the  Territory  at 
any  place  within  the  United  States,  and  to  hold  any  meeting  of  the  stockholders 
or  directors  of  the  corporation  at  said  office  ;  to  forfeit  stock  for  non-payment 
of  assessments;  to  remove  directors;  to  provide  penalties  to  the  amount  of 
$100  for  violation  of  by-laws  (sees.  27,  30,  32,  34,  43,  44,  56-75,  161). 

Topeka  Paper  Co.  v.  Company,  7  Okla.  220 ;  54  Pac.  455. 

5.  Procnriug  the  Charter.  —  The  articles  must  be  subscribed  by  each  of 
the  incorporators  and  acknowledged  before  some  officer  authorized  to  take 
acknowledgments  of  conveyances  of  real  property.  The  articles  must  then 
be  filed  with  the  Secretary  of  the  Territory  (sees.  17,  18).  Collateral  inquiry 
into  the  legality  of  corporate  existence  is  forbidden  (sec.  4). 

6.  Corporate  Indebtedness.  —  The  corporate  indebtedness  is  limited  to 
the  amount  of  subscribed  capital  stock  (sec.  41). 

Rodgcns  0.  Bonnett,  2  Okla.  553  ;  37  Pac.  1078. 

7.  Organization  Tax.  —  There  is  no  organization  tax  imposed  upon 
corporations. 

8.  Filing  and  Recording  Fees.  —  !$5  to  the  Secretary  of  the  Territory  for 
filing  articles;  $>  for  Lssuiug  certificate  of  incorporation;  for  affi.viiig  certifi- 
cate to  copy  of  articles,  $1 ;  for  making  copy  of  articles,  10  cents  per  folio. 

9.  Commencing  Business.  —  The  company  must  be  organized  and  busi- 
ness must  be  commenced  within  one  year  from  the  date  of  the  i-ssuance  of 
the  certificate  of  incorporation.  The  company  must  be  organized  —  to  the 
extent  of  the  adoption  of  by-laws  at  least  —  within  thirty  days  after  the 
filing  of  articles  of  incorporation  (.sees.  33,  52). 

10.  Organization  Meeting.  —  The  organization  mcetiug  may  be  held 
without  the  State  if  the  chart-r  so  provides.  By-laws  must  be  adopted  withi'i 
thirty  days  after  filing  articles  of  incorporation.  Tli:i  corporation  must  be 
organized  and  commence  business  within  one  year  from  date  of  incorporation 
(sees,  33,  52,  lUl  ;   sec  also  sec.   17). 

11.  Meetings  of  Stockholders  and  Directors  — If  the  cliarter  so  pro- 
vides, both  the  stocklioldcrs'  and  directors'  meetings  may  be  In'ld  without  tiie 
State.  Otherwise  the  stockhoMcrs'  mcH'tings  must  be  iirld  witliin  I  hi'  State, 
and  the  directors'  meetings  wherever  the  by-laws  provide  (sees.  45,  161;  see 
also  sec.  47). 

12.  Directors' Qualifications  and  Liabilities,     a.  Qualijtcntion.s. — There 

317 


INCDUrDliATlON    AND    OIUJAM/ATION    0^    COUPOIIATIONS. 

must  bo  at  least  three  diivctors  atul  not  more  tluui  eleven,  all  of  whom  must 
be  stockholders.  One-third  of  the  officers  must  be  residents  of  the  Terri- 
tory. At  the  first  meeting  at  whieh  by-laws  are  adopted  or  at  such  subse- 
quent meetings  as  may  then  be  designated,  directors  may  be  elected  to  hold 
their  olfiee  for  one  year  or  until  tlieir  successors  are  elected  and  qualify 
(sees.  9,  37,  39). 

b.  Liabililics.  —  Directors  are  liable  for  illegally  increasing  or  reducing 
the  stock  of  the  corporation,  for  declaring  illegal  dividends;  also  for  making 
false  reports,  for  creating  debts  beyond  the  amount  of  subscribed  capital 
stock,  and  for  making  loans  to  stockholders  (sees.  11,  42,  156). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  debts  of 
the  company  to  the  extent  of  their  unpaid  stock  subscriptions.  Also  for 
debts  due  mechanics,  workmen,  and  laborers  employed  by  the  corporation 
(sees.  46,  158). 

Chicago  Bhlg.  &  Mfg.  Co.  v.  Lyon,  10  Okla.  704 ;  64  Pac.  6. 

14.  Stock  Certificates.  —  Stock  certificates  must  be  signed  by  the  presi- 
dent and  secretary  (sees.  48,  2S8). 

15.  Preferred  Stock.  —  The  act  makes  no  special  provision  for  the 
issuance  of  preferred  stock. 

16.  Payment  of  Capital  Stock.  —  Corporations  can  issue  stock  for  money, 
labor  done,  or  money  or  property  actually  received.  The  act  expressly  provides 
that  all  stock  certificates  issued  in  excess  of  the  capital  stock  shall  be  void. 

17.  Books.  —  Stock  transfer  book  and  a  journal  of  the  meetings  of 
directors  and  stockholders  must  be  kept  open  for  inspection  of  stockholders, 
but  the  place  where  such  book  is  to  be  kept  is  not  specified  by  statute 
(sees.  35,  50,  157). 

18.  Office.  —  The  act  requires  every  corporation  to  have  its  main  office 
for  the  transaction  of  its  business  within  the  Territory  (sees.  45,  161). 

19.  Reports.  —  Corporations  for  mining,  manufacturing  and  other 
industrial  pursuits  nmst  annually  within  twenty  days  from  the  first  day  of 
January  make  a  report  which  must  be  published  in  some  newspaper  published 
at  the  place  where  the  principal  business  of  the  corporation  is  carried  on, 
stating  the  capital  stock,  and  the  araoinit  th'^reof  actually  paid  in,  the  amount. 
and  rating  of  its  indebtedness,  and  the  amount  due  the  corporation,  tlie 
number  and  amount  of  dividends  and  when  paid,  and  the  net  amount  of 
profits.  This  report  must  be  signed  by  the  president  and  a  majority  of  the 
directors  and  verified  by  the  president  or  secretary  and  filed  in  the  office  of 
the  register  of  deeds  of  the  county  where  the  corporate  business  is  carried  on 
(sec.  159). 

20.  Anti-Trust  Statute.  —  Certain  classes  of  trusts  and  combinations  are 
prohibited.     (See  Stat.,  sec.  6140.) 

21.  Statutory  Ground  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  for  failure  to  organize  and  commence  the  tran.saction  of  business 
within  one  year  from  filing  articles,  also  by  neglect,  abuse,  or  surrender  of  its 
corporate  rights  (sec.  .52;  Stat.,  sees.  5:557,  5358,  5359). 

22.  Annual  Franchise  Tax.  —  There  is  no  annual  franchise  tax  in 
Oklahoma. 

23.  Amendments.  —  The  articles  may  be  amended  in  any  particular 
desired  (sees.  10,   19). 

24.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
extended,  if  desired,  by  compliance  with  the  statute  (sec.  262). 

348 


SYNOPSIS-DIGEST   OF   IXCORPORATIOX    ACTS. 

25.  JJissolution.  —  Two-thirds,  vote  of  the  stockholders  authorizes  peti- 
tion for  dissolution  in  the  district  court.  Failure  to  commence  business 
within  one  year  from  date  of  incorporation  dissolves  such  company  (Stat., 
sees.  5357-5359,  chap.  16,  Art.  V.  sees.  51,  52). 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  in  the  office 
of  the  Secretary  of  the  Territory  an*  authenticated  copy  of  their  charter  and 
appoint  an  agent  to  receive  process.  This  agent  must  reside  in  the  county 
where  the  principal  business  of  the  corporation  is  to  be  carried  on.  An 
authenticated  copy  of  the  agent's  appointment  must  be  filed  in  the  office  of 
the  Secretary  of  the  Territory  and  also  in  the  office  of  the  register  of  deeds 
of  the  county  where  the  agent  resides.  Foreign  corporations  pay  merely  filing 
fees.  There  is  no  annual  license  fee  imposed  on  them  (chap.  17,  Art.  XXI. 
sec.  1167). 

Keokuk  Falls  Imp.  Co.  v.  K.  &  D.  M.  Co.,  5  Okla.  32;  47  rac.'484. 


OREGON. 

(The  references  cited  below  are  to  Bellinger  &  Cotton's  Annotated  Code  and  Statutes 
(1902),  unless  otherwise  stated.) 

1 .  Statutes  under  which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Oregon  is  to  be  found  in  sees.  5U.V2-5073 
of  chap.  1,  Title  41,  Bellinger  &  Cotton's  Annotated  Code  of  the  Statutes 
of  Oregon,  as  amended  by  the  Laws  of  1903.  Under  this  act  corporations  may 
be  formed  for  any  lawful  business  enterprise. 

2.  Incorporators.  —  Three  or  more  persons.  There  are  no  residential 
requirements  (sec.  50.32). 

Rutherford  v.  Hill,  22  Ore.  218;  29  Pac.  .")46;  Miller  i-.  Company,  3  Ore.  25  ;  Coyote, 
etc.  Co.  V.  Ruble,  8  Ore.  28.5. 

3.  Contents  of  the  Certificate  of  Incorporation.  The  certificate  must 
set  forth  : 

a.  Name.  —  Similarity  of  names  with  existing  corporations  is  expressly 
forbidden   (Laws  of  1903,  p.  41). 

b.  Duration.  —  ^Lay  be  unlimited  if  desired. 

c.  Purpattes.  —  Enlerpri.se,  business,  pursuit,  or  occupation  in  wiiich  the 
corporation  proposes  to  engage.  State  officials  permit  the  insertion  of  any 
number  of  purposes  in  the  articles. 

Ma.xweli  v.  Akin,  89  Fed.  180. 

(I.  Domiciliary  Office. —  Place  where  the  corporation  proposes  to  have 
its  principal  place  of  business  or  places  of  business. 

e.    Capital  Stock.  —  Amount  thereof,  which  is  uniiinilcd. 

/.    Number  anil  Par  Value  of  Sharf.:;.  —  These  may  be  any  amount. 

fj.  If  the  corporation  is  formed  for  the  purpose  of  navigation,  constructing 
railroads,  roads,  canals,  or  bridges,  the  termini  of  such  navigation  roml  or  of 
the  site  of  the  bridge  must  be  set  forth  (.sec.  5055). 

Killiiigswortli  ;;.  Company,  18<)n\  ■'}.''>]  ;  2')  Pac.  (id. 

4.  Statutory  Powers. —  In  addition  to  the  statutory  enumeration  of 
common  law  powers  th(!  corporation  has  the  following  additional  powers: 
To  accept  donations  of  real  an<l  personal  property  from  city,  municipalities,  aiul 
persons;    to  forfeit  the  stock  of  its  meniber.s  for  non-jiayment  of  assessments; 

;;i'j 


INrOHPOnATION    AND    ORGANIZATION    OF    CORPORATIONS. 

to  porinit  railroail  cmnpaiiios  to  consolidate  ;    to  authorize  voting  by  proxy 
(sees.  50.")ii,  5071). 

O.  K.  &  N.  Co.  V.  0.  R.  Co.,  i;50  U.  S.  1  ;  9  Sup.  Ct.  409;  Ilollachiy  v.  Elliott, 
8  Ore.  85. 

5.  Procuring  the  Charter.  —  The  articles  must  be  subscribed  and 
acknowledged  by  each  of  the  incorporators  and  should  be  executed  in 
triplicate.  One  of  these  must  be  filed  in  the  ofBce  of  the  Secretary  of 
State,  another  with  the  clerk  of  the  county  where  the  corporate  business 
is  to  be  carried  on  or  w'here  the  principal  place  of  business  is  to  be  located, 
and  a  third  should  be  retained  in  the  posse.ssion  of  the  company  (sec.  .5053.) 
Before  a  certificate  of  incorporation  will  be  issued,  not  only  must  the  organ- 
ization tax  be  paid,  but  the  proportionate  amount  of  the  annual  franchise  tax 
for  the  first  year  (Laws  of  190;3,  p.  41).  The  Secretary  of  State  thereupon 
issues  a  certificate  of  incorporation  (Laws  of  lOOo,  pp.  40,  41). 

AVash.,  etc.  As,s'u  v.  Stanley,  38  Ore.  319;  63  I'ac.  489. 

6.  Corporate  Indebtedness.  —  There  is  no  limit  upon  the  amount  of 
corporate  indebte<lness. 

7.  Organization  Tax.  —  Up  to  $5,000,  $10 ;  $10,000,  $15  ;  $25,000,  |20  ; 
S.j0,00t1,  <>-J5;  S100,00(),  $35;  $250,000,  $15;  $.500,000,  $60;  $1,000,000,  $75; 
S2,OU0,00t),  $90;    in  excess  of  .12,000,000,  $100  (Laws  of  1903,  pp.  39-49). 

8.  Filing  and  Recording  Fees.  —  There  is  no  charge  for  filing  and 
recording  articles  in  the  office  of  the  Secretary  of  State.  For  recording  with 
county  clerk,  about  $1.25  (see  Laws  of  1903,  p.  41). 

9.  Commencing  Business.  —  As  soon  as  the  articles  are  filed  as  required 
by  law  and  one-half  of  the  capital  stock  has  been  subscribed,  the  corporation 
may  commence  the  transaction  of  business.  Directors  must  be  elected  and  busi- 
ness commenced  within  one  year  from  time  of  filing  articles  (sees.  5057,  5067)^ 

C.  G.  &  S.  M.  Co.  V.  Ruble,  8  Ore.  285  ;  Holladay  v.  Elliott,  8  Ore.  85 ;  Willamette 
Freightiug  Co.  v.  Stauners,  4  Ore.  262;  McVicker  v.  Cone,  21  Ore.  353;  28  Pac.  76; 
Nickum  v.  Burckhard,  30  Ore.  464  ;  47  Pac.  788  ;  48  Pac.  474. 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State  in  the  absence  of  any  statute  providing  otherwise.  Provision 
is  made  for  the  calling  of  the  organization  meeting.  At  the  incorporators' 
meeting  the  incorporators  act  as  inspectors  of  election  and  certify  that  they 
will  elect  directors  and  appoint  time  and  place  for  their  first  meeting  (sec. 
5058).  Directors  cannot  be  elected  until  one-half  of  its  capital  stock  has  been 
sub.scribed  (sec.  50-57). 

Nickum  v.  Burckhardt,  30  Ore.  464 ;  47  Pac.  789 ;  48  Pac.  474. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meet- 
ings must  be  held  within  the  State.  The  provision  that  a  majority  of  the 
directors  shall  be  residents  of  the  State,  practically  renders  it  necessary  to 
hold  tlie  directors'  meetings  within  the  State  unless  the  expedient  is  resorted 
to  of  delegating  the  powers  of  directors  to  an  executive  committee  composed 
of  a  minority  of  the  directors  (sec.  5002). 

Doerubecher  v.  Company,  21  Ore.  573  ;  28  Pac.  899. 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
mu.st  be  not  less  than  three  directors,  all  of  whom  must  be  stockholders  and  a 
majority  residents  of  the  State.  Each  must  subscribe  to  an  oath  of  office  (sec. 
50.59).     Less  than  a  majority  may  constitute  a  quorum  if  desired  (sec.  5062). 

Silsby  V.  Strong,  38  Ore.  36;  62  Pac.  633. 
350 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

b.  Liabilities  —  Directors  are  liable  for  the  illegal  declaralion  of  dividends 
and  for  the  unlawful  withdrawal  of  capital  (sec.  5UG0). 

Patterson  v.  Thompson,  86  Fed.  85  ;  90  Fed.  647. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent 
of  their  unpaid  stock  subscriptions  (Cons.,  Art.  XI.  sees.  3,  5U05). 

Lee  I'.  Imhrie,  13  Ore.  510;  11  Pac.  270;  Bruudage  v.  Company,  12  Ore.  322; 
7  Pac.  314;  Hawkins  v.  Company,  38  Ore.  544;  64  Pac.  320;  Aldrich  v.  A.  C.  &  D. 
Co.,  24  Ore.  32  ;  32  Pac.  756;  Balfour  i:  Company,  27  Ore.  300;  41  Pac.  164. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
showing  the  number  of  shares  held  by  him,  signed  by  such  officers  as  the  by- 
laws may  prescribe. 

15.  Preferred  Stock.  —  There  is  no  express  provision  authorizing  the 
issuance  of  preferred  .'^tock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  paid  for  in  money  or 
money's  worth. 

17.  Books.  —  Tiie  stock  book  and  all  other  books  of  tlie  corporation, 
necessary  in  carrying  on  its  busines.s,  must  be  kept  within  the  State  at  the  prin- 
cipal office  (sec.  50G-"3).     They  are  open  to  inspection  at  all  reasonable  hours. 

IS.  Ofiice  and  Agent.  —  Every  corporation  must  maintain  an  office 
within  the  .State  at  all  times  (sec.  5055). 

10.  Reports.  —  All  corporations  shall,  during  the  montli  of  June  of  each 
year,  f  urni.sh  the  Secretary  of  State  with  a  statement  sworn  to  by  one  of  the 
officers,  setting  forth  the  name  of  the  corporation,  location  of  its  principal 
office,  names  of  its  president,  secretary,  and  treasurer,  and  their  post-office 
addresses,  date  of  annual  election  of  officers  and  directors,  amount  of  author- 
ized capital  stock,  number  and  par  value  of  shares,  amount  of  capital  stock 
subscribed,  amount  i.ssued  and  paid  up  (.Vet  of  Feb.  16,  1903,  .sec.  5). 

20.  Anti-Trust  Statute.  —  There  is  no  auli-trust  statute  in  force  in 
Oregon. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter. — Charters  may  be 
forfeited  if  tlie  corporation  for  any  period  of  six  niontlis  aiU'r  the  commence- 
ment of  business  negh^cts  or  ceases  to  carry  on  tlie  same.  It  may  also  be  for- 
feited for  abuse  or  misuser  of  its  corporate  powers,  or  for  faihire  to  elect 
directors  and  commence  business  within  one  year  after  filing  articles  of  incor- 
poration (sec.  5067).  The  right  to  transact  business  is  in  abeyance  while  the 
annual  franchi.se  tax  is  in  default  (Laws  of  1903,  p.  39  et  seep). 

22.  Amendments.  —  The  articles  may  lie  amended  for  the  purpose  of 
increasing  or  n-ducing  tlie  capital  stock,  changing  the  par  value  of  its  .shares, 
changing  its  name  or  place  of  busini\s.s,  or  altering  tiie  corporate  purposes 
(sec.  5lt78;  Laws  of  1903,  p.  11).  It  may  also  change  its  place  of  business 
(sec.  5072). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for 
tlie  cxtfMision  of  corporate  ('xi.><teiic<'. 

21.  Dissolution. — Corporations  may  be  di.ssolved  by  a  majoiily  vote  of 
tilt!  stockliMJijcrs  of  tlie  corjioration  (sec.  5070;  Laws  of  1903,  ji.  11). 

25.  Annual  License  Fee.  —  I'poii  an  authorizi'il  (•iii)ital  stock  up  to 
S5,000,  $10;  up  to  ^10,000,  $15;  to  !3l25,00(».  $20;  to  *.")0.(MKI,  ^30;  to  «1 00,000, 
S50;  to  .S2.50,00(),  S70;  to  !?.50(>.OOO,  $100;  to  $l,(Min.()()().  $125;  up  to 
^2.00(1.0(1(1,  .•ir;175:   in  .'xcrss  of  8-', 000.0(10,  .$200  (.Act  of  Eel).  16,  190:!.  sec,  5). 

26.  Foreign   Corporations.  —  A  foreign  corporation  must  file  with  the 

a51 


INCOUPOUATION    AND    ORfiANIZATION    OF    COUPORATIONS. 

St>on>tary  of  State  a  declaration  of  its  purposes  to  engage  in  business  within 
the  State,  ami  state  name  under  whieh  it  proposes  to  transact  business,  name 
of  State  under  wiiose  hiws  it  is  organizeil,  location  of  its  home  otiice,  date  of 
its  incorporation,  amount  of  capital  stock,  nature  of  its  business,  location  of 
its  principal  oiKce  within  the  State,  name  of  its  attorney  in  fact,  names  and 
addresses  of  its  principal  orticers  and  directors,  and  name  and  residence  of 
principal  agent  within  the  State;  also  certified  copy  of  its  charter,  certified  to 
by  the  legal  keeper  of  the  original  together  with  a  certificate  of  the  Secretary 
of  State  of  the  State  issuing  the  charter,  as  to  whether  said  articles  of  incor- 
poration are  genuine;  and  must  pay  to  the  Secretary  of  State  SoO  for  filing 
and  recording  the  same,  together  with  annual  license  fee  for  the  succeeding 
fraction  of  the  year.  The  annual  license  tax  is  the  same  as  for  domestic 
corporations.  Must  also  file  annual  reports  same  as  domestic  corporations, 
and  must  appoint  an  attorney  within  the  State  upon  whom  process  may  be 
served  (Act  of  Feb.  16,  190:5,  sees.  6,  7). 

0.  &  W.  T.  J.  Co.  v.  Rathburn,  5  Saw.  -32 ;  Commercial  Bank  v.  Sherman,  28  Ore. 
573;  43  Pac.  65S;  Singer  Mfg.  Co.  v.  Graham,  8  Ore.  18;  Aldrich  v.  Anchor  Coal,  etc. 
Co.,  24  Ore.  32 ;  32  Pac.  756. 


PENNSYLVANIA. 

(The  references  below  are  to  the  Public  Laws  of  Pennsylvania,  189-t,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. — 
The  Business  Corporation  Act  of  Pennsylvania  is  to  be  found  in  Act  2!)  of  tiie 
Session  Laws  of  1874,  Public  Laws,  chap.  73.  This  law  was  amended  by  Act 
of  April  17,  1876;  also  by  Act  of  July  9,  1901.  Special  acts  are  provided 
for  banking,  canal,  coal,  navigation,  railway,  pipe  line,  street  railway,  motive 
power,  natural  gas,  domestic  insurance,  and  co-operative  companies.  Under 
the  Acts  of  1871  and  1876  corporations  were  divided  into  twenty-five  classes, 
and  charters  could  be  procured  for  the  transaction  of  any  business  mentioned 
in  one  of  these  classes.  By  the  Act  of  July  9,  19U1,  corporations  may  be 
formed  for  the  transaction  of  any  lawful  business  not  otherwise  provided  for. 

2.  Incorporators.  —  Three  or  more  persons,  one  of  whom  must  be  a  citi- 
zen of  Pennsylvania  (Laws  of  1901,  chap.  207  ;  Laws  of  1903,  chap.  201). 

3.  Contents  of  the  Certificate  of  Incorporation.  The  certificate  must 
set  forth  : 

a.  Name.  —  Similarity  of  names  is  forbidden.  A  charter  will  be  refused 
■where  the  propo.sed  name  is  already  in  use  by  a  domestic  corporation  (P.  L., 
73,  sec.  3;  .see  Laws  of  1903,  Act  185). 

American  Clay  Mfg.  Co.  v.  Company,  198  Pa.  189;  47  Atl.  936. 

b.  Purposes.  —  Purpo.ses  for  which  corporation  is  formed.  Only  one  pur- 
pose may  be-inserted  (Id.).  Certificates  for  incorporation  of  manufacturing 
or  mercantile  companies  describe  in  a  general  way  the  goods  to  be  manufac- 
tured or  sold. 

c.  Domicile.  —  Place  where  business  is  to  be  transacted  (Id.).  Only  one 
office  can  be  named,  and  that  must  be  where  the  corporate  functions  are  to  be 
exercised. 

d.  Duration.  —  Term  of  existence.  May  be  perpetual  if  desired  (P.  L.,  73, 
sec.  4). 

e.  Subscribers'  Names  and  Subscriptions.  —  Names  and  residences  of  sub- 
cribers  and  number  of  shares  subscribed  for  by  each  (P.  L.,  73,  sec.  3). 

352 


STXOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

/.  Directors.  —  Number  of  directors.  Not  less  tlian  three.  Names  and 
residences  of  those  for  the  first  year  (P.  L.,  73,  sec.  3;  Laws  of  19U1, 
chap.  51). 

g.  Capital  Stock.  —  Amount  thereof.  Number  and  par  value  of  shares. 
Capital  stock  may  be  any  amount.  Par  value  of  shares  must  not  exceed 
$100  (P.  L.,  73,  sees.  3,  11 ;  Laws  of  1899,  chap.  120;  see  also  Laws  of  1901, 
chap.  302). 

h.  Preliminary  Payment  of  Stock  Subscriptions.  —  A  statement  that  ten  per 
cent  of  the  capital  has  been  paid  in  to  tlie  treasurer  together  with  his  name 
and  residence  (P.  L.,  73,  sec.  ^). 

Cook  V.  Marshall,  191  Pa.  315;  43  A  tl.  314. 

4.  Statutory  Powers.  —  In  addition  to  the  common  law  powers  corpora- 
tions have  the  following  additional  powers  :  To  consolidate  with  otlier  cor- 
porations ;  to  purchase  and  hold  stock  and  bonds  in  other  corporations ;  to 
issue  preferred  stock;  to  vote  by  proxy  ;  to  enforce  a  lien  for  corporate  debts  ; 
to  forfeit  stock  for  non-payment  of  assessments ;  to  issue  stock  for  property  pur- 
chased. The  corporation  has  power  to  cumulate  votes  in  election  of  directors, 
to  classify  directors,  and  to  dispose  of  all  corporate  assets  (P.  L.,  30,  sec.  5 ;  Cons. 
Art.  XVL,  .sec.  4;  P.  L.,  47,  sec.  1;  P.  L.,  73,  .sec.  1  ;  Laws  of  1901,  Act  21G  ; 
Laws  of  1901,  Act  298 ;  P.  L.,  37,  sec.  1  ;  P.  L.,  73,  sees.  16,  43 ;  P.  L.,  79, 
sec.  1  ;  P.  L.,  47,  sec.  1 ;  P.  L.,  141,  sec.  1 ;  7  Sm.  L.,  320,  sees.  1-2;  P.  L.,  73, 
sees.  11.  39  ;  P.  L.,  30,  sec.  4  ;  Cons.,  Art.  XVI.  sees.  6,  7  ;  P.  L.,  30,  sec.  6; 
Laws  of  1903,  Acts  17,  14.5). 

5.  Procuring  the  Charter.  —  The  certificate  must  be  subscribed  and  ac- 
knowledged by  at  least  two  of  the  incorporators,  who  must  also  swear  that  the 
statements  contained  in  the  certificate  are  true.  Notice  of  intention  to  apply 
for  charter  nmst  be  inserted  in  two  newspapers  once  a  week  for  three  weeks, 
stating  the  character  and  object  of  the  proposed  corporation.  Certificate  to- 
gether with  proof  of  publication  must  tlien  be  forwarded  to  the  governor,  who, 
if  he  approves  of  it,  eiidors  -s  his  approval  thereon  and  directs  letters  patent  to 
issue.  The  certificate  is  then  recorded  in  the  office  of  the  Secretary  of  State, 
registered  with  the  Auditor-General,  and  the  original  articles  with  the  endorse- 
ment mentioned,  mu.st  then  be  recorded  in  tlie  office  of  the  recorder  of  deeds 
of  the  county  where  the  chief  operations  of  tlie  company  are  to  be  carried  on 
(Laws  of  1901,  Act  207  ;  P.  L.,  73,  sec.  3  ;  P.  L.,  18,  sec.  1 ;  P.  L.,  30,  sec.  G  ; 
P.  L.,  420,  .sec.  19;  Laws  of  1903,  chap.  204). 

M.  B.  Co.  V.  Company,  196  Pa.  St.  2.5  ;  46  Atl.  99. 

G.  Corporate  Indebtedness.  —  Loans  to  an  amount  not  exceeding  one- 
half  thf  c.'ipitai  stock  may  l)e  made  on  real  estate  an<l  machinery,  or  on  real 
e.state  alone.  Coriiorations  belonging  to  classes  4,  5,  (i,  7,  9,  11,  24,  may 
borrow  mom-y  to  an  amount  not  exceeding  double  the  amount  of  capital  stock 
paid  in.  Under  Laws  of  1901,  Act  1,  all  limitations  as  to  the  borrowing 
power  of  corporation.s  other  than  those  in  the  cla.ssps  above  enumcrati'd  are 
removed.     (Sec  however  P.  L.,  Gl,  .sec.  1.) 

7.  Organization  Tax.  —  A  bonus  of  one  tliinl  of  one  per  cent  upon  tlie 
authorized  capital  slock  must  be  paiil  (Laws  of  1><9!),  Act  120;  Laws  of 
1!)()1,  Art  1). 

8.  Filing  and  Recording  Fees.  —  Filing  fees  in  the  office  of  the  Secretary 
of  State,  usually  S30 ;  recording  fees  in  local  county  office,  2.5  cents  per  folio  ; 
fee  upon  organization  for  filing  statement,  S5 ;  cost  of  publishing  uotice  of 
applic.'itioii  for  letters  patent,  usually  about  89. 

23  353 


INCORPORATION    AND    ORfiANTZATION   OF   CORPORATIONS. 

0.  Commencing  Business.  —  Before  the  corporation  can  commenre  busi- 
ness ten  I'or  ot-iit  of  the  antliorized  capital  slock  must  have  been  paid  in  in 
caj;li  to  the  treasurer  of  tlie  intended  corporation.  The  corporation  cannot 
coninionce  business  without  first  tiling  with  the  Auditor  of  the  ('<nninonweaItii 
the  name  of  the  corporation,  the  date  of  incorjioration,  tiie  authority  under 
whicii  incorporated,  place  of  business,  post-office  address,  and  names  of  the 
president,  secretary,  and  treasurer,  the  amount  of  capital  authorized  by  the 
charter,  and  amount  of  capital  paid  in  to  the  treasurer  of  the  company  (T.  L., 
30,  sec.  6;  P.  L.,  112,  sec.  1 ;  P.  L.,  420,  sec.  19).  Business  must  be  com- 
menced within  two  years  after  incorporation  (P.  L.,  626,  sees.  2,3;  P.  L., 
122,  sec.  5;  P.  L.,  241,  sec.  2). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  C'onnnonwealth,  unless  a  niaj(n-ity  of  the  incorporators  or  stock- 
holders are  citizens  of  another  State.  (See  P.  L.,  61,  sec.  1.)  When  a  ma- 
jority of  the  directors,  corporators,  or  stockholders  thereof  are  citizens  of 
another  State,  the  corporation  may  be  organized  without  the  State  if  desired 
(P.  L.,  1228,  sec.  1). 

11.  Meetings  of  Stockholders  and  Directors.  —  The  annual  meetings 
for  the  election  of  oliicers  must  be  held  in  the  State  of  Pennsylvania.  Special 
stockholders'  meetings  and  meetings  of  the  board  of  directors  may  be  held 
without  the  State  if  a  majority  of  the  stockholders  and  a  majoi-ity  of  the  di- 
rectors are  respectively  citizens  of  another  State  (P.  L.,  355,  sec.  1 ;  P.  L., 
1228,  sec.  1).  Iron  and  steel  corporations  may  hold  all  meetings  without  the 
State  if  desired  (P.  L.,  chap.  73,  sec.  38). 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualijicalions.  — 
There  must  be  at  least  three  directors,  one  of  whom  must  be  a  resident  of 
the  State.  If  the  by-laws  so  provide,  the  number  of  directoi-s  may  be 
changed  from  time  to  time  by  the  directors  without  a  vote  of  the  stockholders 
and  without  amending  the  certificate  of  incorporation.  Directors  may  be 
classified  if  desired.  If  the  certificate  so  provides,  directors  may  adopt  by- 
laws (P.  L  ,  61,  sec.  1).  Cumulative  voting  is  permitted  (P.  L.,  47,  sec.  1  ; 
P.  L.,  80,  sec.  1 ;  P.  L.,  411,  sec.  1 ;  P.  L.,  281,  sec.  1,  as  amended  by  Laws 
of  inOl,  Act  51 ;  P.  L.,  73,  sec.  38). 

Commonwealth  v.  Stevenson,  200  Pa.  St.  509 ;  50  Atl.  91. 

b.  Liabilities.  —  Directors  are  liable  for  the  declaration  of  illegal  dividends. 
They  are  also  liable  to  creditors  and  stockholders  for  moneys  embezzled  by  offi- 
cers "(P.  L.,73,  sec.  39  ;  P.  L.,  196,  sec.  1 ;  P.  L.,  72,  sec.  3;  P.  L.,  196,  sec.  3). 

Strunk  v.  Owen,  199  Pa.  St.  73  ;  48  Atl.  888. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent  of 
their  unpaid  stock  su>)scriptions.  They  are  also  liable  for  labor  debts  to  the 
amount  of  stock  held  by  them  (Cons.,  Art.  XVI.  sec.  7 ;  P.  L.,  30,  sec.  3  ;  P.  L., 
73,  sees  1.5,  24;  P.  L.,  73,  sec.  39;  P.  L.  437,  sec.  5).  They  are  also 
liable  for  the  illegal  withdrawal  of  capital  (P.  L.,  73,  sees.  38,  39). 

Adv.  Ben.  Order  v.  Company,  195  Pa.  St.  602;  46  Atl.  102;  Bates  v.  Day,  198  Pa. 
St.  51.3 ;  48  Atl.  407  ;  McNeal  Pipe,  etc.  Co.  v.  Bullock,  174  Pa.  St.  93 ;  34  Atl.  594. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
signed  by  the  president  or  vice-president,  and  countersigned  by  the  treasurer 
and  sealed  with  the  seal  of  the  corporation  (P.  L.,  73,  sec.  7 ;  Laws  of  1895, 
Act  3). 

15.  Preferred  Stock.  —  Preferred  stock  may  be  issued  if  authorized  in 

354 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

the  certificate  of  incorporation,  or  with  the  consent  of  a  majority  in  interest 
of  the  stockholders  after  incorporation.  It  may  be  divided  into  classes 
if  desired.  The  amount  of  preferred  stock  cannot  at  any  time  exceed  one- 
half  of  the  authorized  capital  stock.  The  amount  of  dividends  thereon  is 
limited  to  twelve  per  cent.  The  holders  of  preferred  stock  are  not  liable  for 
debts  of  the  corporation  (F.  L.,  37,  sec.  1;  P.  L.,  73,  sees.  16,  39;  P.  L.,  79, 
sec.  1). 

10.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  exchange  for 
money,  labor  done,  or  property  actually  received.  Stock  may  be  issued  for 
real  and  personal  estate,  mineral  rights,  patent  rights,  and  other  property 
necessary  for  the  purposes  of  organization.  The  stock  so  issued  shall  be  de- 
clared and  taken  to  be  full-paid  stock  and  not  liable  to  any  further  calls  or 
assessments.  One  quarter  of  the  capital  stock  must  be  paid  up  within  two 
years  (P.  L.,  122,  sec.  5).  No  note  of  a  stockholder  can  be  accepted  in  pay- 
ment of  stock  (P.  L.,  30,  sec.  4 ;  see  also  Cons.,  Art.  XVI.  sec.  7 ;  P.  L.,  Act 
278,  sec.  1). 

17.  Books.  —  Directors  of  manufacturing,  mechanical,  mining,  quarrying, 
and  other  business,  provided  in  sec.  18  of  the  enumeration  of  the  classes  of 
business  corporations,  are  required  to  keep  a  stock  book  or  stock  register, 
which  must  be  open  for  inspection  during  business  hours  to  all  persons  (P.  L., 
56.3,  sec.  21). 

Commonwealth  v.  Phouuix  Iron  Co.,  105  Pa.  111. 

18.  Office  and  Agent.  —  Aside  from  iron  and  steel  manufacturing  com- 
panies, the  principal  office  of  all  business  corporations  must  be  located  in  the 
State,  and  the  place  where  the  business  is  to  be  transacted  must  be  designated 
iu  the  certificate.  In  the  case  of  iron  and  steel  companies,  the  latter  may  have 
an  office  without  the  State,  if  the  by-laws  so  authorize,  where  meetings  of 
stockholders  and  directors  may  be  held  (P.  L.,  73,  sec.  3;  P.  L.,  351,  sec.  2; 
P.  L.,  3."..1,  sec.  1;  P.  L.,  73,  sec.  38). 

19.  Reports.  —  Every  corporation  shall  make  an  annual  report,  in  the 
month  of  November,  of  the  condition  of  the  corporation.  Special  provisions 
require  annual  reports  from  railroad,  canal,  navigation,  and  telegraph  com- 
panies (P.  L..  iL'O,  ,sec.  19;  P.  L.,  229,  sec.  4;  Laws  of  1901,  chap.  121). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute. 
See  Nester  v.  Company,  161  Pa.  St.  473  ;  29  At.  102. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  may  be 
forfeite<l  for  failure  to  organize  witliin  two  years  after  the  issuance  of  letters 
j>ateiit,  and  after  one-fourth  of  its  capital  stock  has  been  paid  up.  It  may  also 
be  forfeited  for  misuser  or  non-user,  or  by  the  commission  of  any  act  Mhcreliy 
forfeiture  thereof  shall  by  law  be  created.  Neglect  to  pay  the  bonus  tax 
renders  the  charter  liable  to  forfeiture  (P.  L.,  621,  sees.  2,  3  ;  P.  L.,  685,  sec.  2  ; 
P.  L.,  621,  sees.  11-17  inclu.sive;  Cons,,  Art.  XVI.  seel ;  P.  L.,  45,  seel;  P.  L., 
122,  sec  5;  P.  L.,  241,  sec.  2;  P.  L.,  122,  sec.  5;  P.  L.,  256,  sec.  3;  Laws  of 
1901,  Act  176). 

Cochran  v.  Aru<A>\,  ."iS  Pa.  St.  399. 

22.  Amendments.  —  Charter  may  be  amemled  for  the  puritose  of  improv- 
ing, amending,  or  altering  the  conditions  ujion  which  it  was  fornu'd  and  estab- 
lished, by  securing  the  approval  of  the  governor  to  such  proposed  ainen<lment. 
Tliis  power  of  amendmentalso  ineludesthe  right  to  change  the  name.  Sjiecial 
provision  is  made  for  increasing  or  decreasing  the  i)ar  value  of  the  capital  stock 

355 


INCORPORATION    AND  ORGANIZATION    OF   CORPORATIONS. 

and  changing  the  number  of  directors  (P.  L.,  189,  sec.  2 ;  P.  L.,  355,  sec.  1 ; 
P.  L.,  \-22,  sec.  1;  Laws  of  1899,  Act  120,  sec.  2;  Laws  of  I'JOl,  Acta  1,  51, 
302  ;  Laws  of  1903,  chap.  185). 

Cooke  V.  MarslK-vll,  191  Pa.  St.  315;  43  /  tl.  314. 

23.  Extension  of  Corporate  Existence.  —  Provision  is  made  for  the  ex- 
tension of  corporate  existence  of  business  corporations  (P.  L.,  73,  sees.  4, 
40;  Laws  of  1895,  Act  4). 

24.  Dissolution.  —  Court  of  common  pleas  may  accept  surrender  of  powers 
and  enter  a  decree  dissolving  corporation  with  consent  of  a  majority  of  the 
stockholders,  and  after  advertisement  in  two  newspapers  (P.  L.,  293,  sec.  11; 
P.  L.,  sec.  95 ;  Laws  of  1903,  chap.  74). 

M.  B.  Co.  V.  Company,  196  Pa.  St.  25;  46  Atl.  99. 

25.  Annual  License  Fee.  —  Five  mills  upon  each  dollar  of  the  actual 
value  of  its  whole  capital  stock  of  all  kinds,  including  common,  special,  and 
preferred,  must  be  paid  to  the  Treasurer  of  the  Commonwealth  annually 
within  thirty  days  from  date  of  settlement  of  the  account  by  the  Auditor  Gen- 
eral and  State  Treasurer.  ISIanufacturing  companies  with  property  exclusively 
in  the  State  are  generally  exempt  from  this  annual  license  fee  (Gen.  Law  Tax- 
ation, sees.  2,  3;  P.  L.,  353,  sec.  1  ;  Laws  of  1899,  Act  120). 

2f).  Foreign  Corporations.  —  Statement  must  be  filed  with  the  Secretary  of 
the  Commonwealth,  showing  name  and  object  of  the  corporation,  location  of  its 
office  and  resident  agent  therein ;  must  also  pay  State  Treasurer  a  bonus  of 
one-tliird  of  one  per  cent  upon  the  capital  actually  employed  or  to  be  em- 
ployed wholly  within  the  State.  Must  file  annual  report  with  the  Auditor- 
(Jeneral.  Foreign  corporations  may  become  domestic  if  they  so  desire,  by 
complying  with  the  statute  in  such  case  made  and  provided  (P.  L.,  89,  sees. 
1,  2).  The  same  annual  tax  is  required  as  of  domestic  corporations  (P.  L., 
3.53,  sec.  1;  Con.,  Art.  XVI.  sec.  5;  Laws  of  1901,  Act  121  ;  P.  L.,  108,  sec. 
3  ;  P.  L.,  127,  sec.  1 ;  P.  L.,  249,  sec.  1;  P.  L.,  38,  sees.  1,  2;  P.  L.,  39,  sees. 
1,  2 ;  P.  L.,  89,  sees.  1,  2,  3;  P.  L.,  176,  sees.  1,  2 ;  P.  L.,  252,  sec.  1 ;  P.  L., 
361,  sec.  2;  P.  L.,  216,  sec.  3;  P.  L.,  354,  sec.  6;  P.  L.,  389,  sec.  2;  P.  L., 
466,  sec.  1 ;  Laws  of  1903,  chaps.  2,  67). 

McCanna  &  Fra.ser  Co.  i-.  Citizens  Trust,  etc.  Sur.  Co.,  76  Fed.  420  ;  24  C.  C.  A.  1 1 ; 
Commonwealth  v.  Company,  98  Penu.  90 ;  In  re  Hovey's  Estate,  198  Pa.  St.  385  ;  48  Atl. 
311 ;  P.  B.  L.  &  S.  Ass'n  i'.  Berlin,  201  Pa.  St.  1 ;  50  Atl.  308;  Madden  v.  Company, 
199  Pa.  St.  454;  49  Atl.  296. 


RHODE   ISLAND. 

(The  references  cited  below  are  to  General  Laws,  1896,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. — 
The  Business  Corporation  Act  of  Rhode  Island  is  to  be  found  in  the  General 
Laws,  chaps.  176,  177,  180.  Under  this  act  corporations  may  be  formed  for 
the  transaction  of  any  ordinary  business,  except  railroad,  canal,  turnpike,  in- 
surance, banking  and  trust  companies,  and  corporations  created  for  dealing 
in  bonds,  notes,  and  other  evidences  of  indebtedness. 

2.  Incorporators.  —  Three  or  more  persons.  No  residential  requirements 
(chap.  170,  sec.  2). 

350 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

3.  Contents  of  the  Certificate  of  Incorporation.  — The  certificate  must 

set  forth : 

a.  Name.  —  Agreement  to  constitute  an  ordinary  business  corporation 
under  a  designated  name.  The  latter  must  be  one  that  must  not  be  mis- 
taken for  that  of  a  copartnership,  and  one  not  in  use  by  an  existing  domestic 
corporation. 

b.  Purposes. — Easiness  for  which  it  is  constituted.  State  officials  con- 
strue this  to  authorize  the  insertion  of  any  number  of  purposes  in  the  articles 
not  covered  by  special  acts. 

c.  Domicillari/  Ojjice.  —  Town  or  city  in  which  it  is  to  be  located. 

d.  Cujiiud  Stock. — Amount  of  capital  stock,  wliether  common  or  pre- 
ferred, and  how  much  of  it,  and  the  par  value  of  shares.  Capital  stock  may 
be  any  amount.  The  par  value  of  shares  may  be  any  amount.  If  preferred 
stock  is  desired,  the  articles  must  set  forth  the  advantages  thereof  over  com- 
mon stock  (chap.  176,  sec  2). 

e.  If  desired,  provision  maybe  made  that  the  corporation  shall  have  a  lieu 
on  all  shares  for  indebtedness  of  the  shareholders  due  to  the  corporation. 
The  right  may  also  be  given  to  the  corporation  in  case  of  sale  of  stock  by  any 
stockholder  to  purchase  said  stock  at  the  lowest  price  at  which  he  is  willing 
to  sell  before  the  same  shall  be  sold  by  him  to  any  other  party  (sec.  9). 

Cori)orate  existence  may  be  unlimited  if  desired. 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  povviMs,  tlie  following  additional  powers  are  conferred:  The  right  to 
authorize  voting  by  proxy;  the  right  to  issue  preferred  stock;  the  creation  of 
a  lien  upon  shares  for  assessments  or  indebtedness  due  the  corporation  ;  the 
right  to  forfeit  such  stock  for  non-payment  of  assessments  (chap.  177,  sees.  1, 
■i,  9).  Corporations  cannot  acquire  real  and  personal  estate  to  an  amount 
to  exceed  8100,000,  without  express  permission  from  the  legislature  (chap. 
17G,  sec.  13). 

5.  Procuring  the  Charter.  —  The  agreement  must  be  signed  by  each  of 
the  incori)orat(jis,  with  their  residences  set  forth  and  jointly  acknowledged. 
The  agreement  nmst  then  be  filed  in  the  office  of  the  Secretary  of  State,  to- 
gether with  the  certificate  of  the  general  treasurer  that  the  organization  tax 
has  been  paid  (chap.  176,  sees.  3  and  -1).  Thereupon  he  issues  a  certificate  of 
incorporation  in  the  form  prescribed  by  statute  (chap.  176,  sec.  4).  As  soon 
as  a  treasurer  is  elected,  his  name  and  address  must  be  filed  with  the  Secre- 
tary of  State  (l.aws  of  l!)il-_',  chap.  975). 

(J.  Corporate  Indebtedness.  —  Corporate  indebtedness  in  manufacturing 
corporations  cannot  be  created  beyond  the  amount  of  the  actual  capital  paid 
in  (cliap.  180.  .sec.  15). 

7.  Organization  Tax. —On  capital  stock  less  than  S100,()00,  the  tax 
is  $100;  on  eapitidizittion  of  S100,000  or  more  tiie  tax  is  one-tenth  of  one 
piT  cent  on  autliorized  capital  stock.  Tlie  tax  is  payahlo  to  the  general 
treasurei-. 

b.  Filing  and  Recording  Fees.  — There  are  no  recording  fees  in  the  Sec- 
retai  y's  oHiri!.       llie  fee  iov  ca'vWI'u-.xU'.  of  incorporation  is  81. 

9.  Commencing  Business.  —  linsiness  may  be  commenced  as  .soon  as  tlio 
articles  are  filed  as  prescribed  by  law.  Within  tliirty  days  after  organization 
there  must  be  filed  with  tlie  Secretary  of  State  a  certificate  imder  oath  of  the 
treasurer  or  other  officer  authorized  to  make  same,  setting  forth  tlie  name  of 
the  corporation,  date  of  organization,  amount  of  capital  .stock  actually  paid  in 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

upon  organization,  tlio  town  in  whicli  such  corporation  is  located,  and  the 
name  and  post-otlico  address  of  its  treasurer  (chap.  177,  sec.  24).  Coriiorutiou 
must  be  or-^anizod  within  two  years  after  incorporation. 

10.  Organization  Meeting.  —  The  organization  meeting  must  ho  lield 
within  the  State,  in  the  absence  of  any  statute  providing  otherwise.  (See  chap. 
177,  sec.  1.) 

11.  Meetings  of  Stockholclers  and  Directors.  —  Stockliolders'  meet- 
ings must  be  heUl  within  the  State.  Directors'  meetings  may  be  iield  without 
the  State  if  the  by-laws  so  provide  (chap.  177,  sec.  :)). 

1'2.  Directors'  Qualifications  and  Liabilities.  —  a.  Qualijicfttions. — 
The  number  of  directors  is  not  limited.  Nor  are  there  any  residential 
requirements. 

b.  Liabilities.  —  Directors  of  manufacturing  corporations  are  liable  to  the 
creditors  for  failure  to  file  the  certificate  executed  by  themselves,  together  with 
the  president,  treasurer,  and  clerk  of  the  company,  within  ten  days  after  the 
payment  of  the  last  instalment  of  the  capital  stock  fixed  and  limited  by  the 
charter,  or  by  vote  of  the  company,  stating  the  amount  of  the  capital  so 
fixed  and  paid  in.  Tlie  certificate  must  then  be  recorded  within  the  said  ten 
davs  in  the  office  of  the  town  clerk  of  the  town  wherein  the  manufactory 
shall  be  established.  They  are  also  liable  for  illegal  declaration  of  dividends. 
They  are  also  liable  to  the  extent  of  the  excess  of  debts  created  by  them  in 
excess  of  the  amount  of  stock  actually  paid  in.  Directors  are  also  lial)le  for 
making  false  certificates  knowing  them  to  be  false.  They  are  also  liable  for 
making  loans  to  stockholders  to  the  extent  of  such  loan  and  interest  thereon 
(chap.  180,  .sees.  2,  3,  6,  15,  16,  20,  21). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent  of 
their  unpaid  stock  subscriptions  (Laws  of  1901,  chap.  839). 

AViug  V.  Slater,  19  11.  I.  597  ;  35  Atl.  302. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  stocTc  certifi- 
cate showing  the  number  of  shares  held  by  him,  signed  by  such  officers  as  the 
by-laws  may  prescribe. 

1.3.  Preferred  Stock.  —  The  issue  of  preferred  stock  is  expressly  au- 
thorized by  law,  and  provision  therefor  must  be  made  in  the  articles  of 
incorporation. 

10.  Payment  of  Capital  Stock.  —  Stock  in  all  companies,  save  manufac- 
turing, must  be  paid  for  in  money  or  money's  worth.  In  the  case  of  manu- 
facturing comi)anies  stock  may  be  issued  for  property  appraised  by  the 
asses.sors  according  to  law  at  a  fair  valuation.  The  amount  of  the  capital 
stock  represented  by  such  property  shall  not  exceed  the  sum  at  which  the  same 
may  be  appraised  by  the  certificate  of  such  instrument,  signed  and  sworn  to 
by  the  assessors  making  the  same,  and  must  be  recorded  before  the  liability 
of  the  stockhoMers  of  such  corporation  for  tiie  debts  contracted  shall  cease. 

17.  Books.  —  Books  are  required  to  be  kept  within  the  State  (chap.  177, 
sec.  19). 

18.  Office  and  Agent.  —  All  corporations  must  have  a  place  of  business 
■within  the  State,  and  shall  have  a  clerk,  treasurer,  or  other  agent,  who  shall 
reside  therein  (chap.  177,  sec.  21).  The  officer  whose  duty  it  is  to  record 
stock  transfers  must  be  a  resident  of  the  State. 

19.  Reports.  —  There  are  no  annual  reports  required. 

20.  Anti-Trust  Statutes.  —  There  is  no  anti-trust  statute  in  force  in 
Rhode  Is'.and. 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  — The  charter  may 
be  forfeited  for  failure  to  organize  within  two  years  after  filing  articles  of 
agreement  (chap.  177,  sec.  23). 

22.  Amendments.  —  Articles  may  be  amended  for  any  purpose  desired 
(chap   17<i.  sec.  11). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  statutory  pro- 
vision for  tlie  extension  of  corporate  existence. 

21.  Dissolution. — Corporate  powers  cease  if  organization  is  not  com- 
pleted within  two  years,  and  court  of  common  pleas  may  dissolve  any  company 
for  non-user.  May  also  dissolve  voluntarily  by  resolution  of  stockholders 
representing  a  majority  of  capital  stock  (chap.  177,  sec.  23 ;  Laws  of  19o2, 
Act  556). 

25.  Annual  License  Pee.  —  There  is  no  annual  license  fee. 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  with  the 
Secretary  of  State  declaration  designating  principal  place  of  business  in 
State  and  name  of  agent  to  receive  service  of  process,  and  must  also  file  in 
same  office  copy  of  the  charter  and  by-laws  with  amendments.  Must  also  file 
annual  statement  showing  residence  of  corporation  ;  amount  of  capital  stock 
actually  paid,  names  of  officers  and  board  of  directors,  with  their  residences 
(Stat.,  sees.  1466,  1467,  14(39).  An  agent  must  be  appointed  who  shall  be  a 
resident  of  the  State,  upon  whom  process  may  be  served  (Laws  of  1902,  chap. 
980). 

Pierce  v.  Compton,  1.3  K.  I.  312  ;  Stafford  &Co.  v.  American  Mill  Co.,  13  K.  L310; 
Evaiis  V.  Pease,  21  R.  1.  187  ;  42  Atl.  506. 


SOUTH    CAROLINA. 

(The  references  cited  below  are  to  the  Code  of  Laws,  1902,  unless  otherwise  stated.) 

1.  Statutes   under  which   Business  Corporations   may  incorporate. 

The  P.usiness  Corporation  Act  of  Soutli  Carolina  is  found  in  th-'  Code  of 

Laws  of  1902,  chaps.  47,  48.     Parties  may  incorporate  under  this  act  for  any 
purpose  whatsoever. 

2.  Incorporators.  —  Two  or  more  persons.  There  are  no  residential  re- 
quirements (chap.  18,  .sec.  1880). 

3.  Contents  of  the  Petition  for  Incorporation  (chap.  48,  sec.  1880). 
a.    Iiicdrjjonilors.  — Names  and  residences  of  the  incorporators. 

//.  Name.  —  Name  of  the  proposed  corporation.  Similarity  of  names  not 
forbidden. 

c.    Domiciliury  Office.  — Principal  place  of  business. 

(I.  I'ltr/joses.  —  May  be  formed  for  any  number  of  purposes  not  covered  by 
special  acts. 

e.  Ca/iitiil  Sloch.  —  Amount  of  capital  stock,  and  iiow  and  wlien  payable. 
P.otli  capital  and  par  value  of  shares  may  be  any  amount. 

f.  Nnmht'.r  and  Pur  Value  of  Shares. 

q.  Prorisions  for  Internal  Rajulalion  of  Affiilrs.  Any  f.ther  matter  may  be 
inserted  which  it  is  deemed  desirable  to  set  forth.  Duration  may  be  nnlimitrd 
if  desired  (sec.  1891). 

4.  Statutory  Powers.  —  In  addition  to  the  stat  utory  enumeration  of  com- 
mon law  powers,  the  following  additional  pow.-rs  are  granted  by  statute  :  To 
cumulat.-  votes  in  the  election  of  directors;  to  have  a  lien  upon  the  shares  of 
Btockholders ;  to  issue  preferred  stock  ;   to  enfoice  payment  of  assessments 


TNCOUrORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

due  uixin  capital  stock;  to  forfeit  the  stock  for  non-paj'inent  thereof;  to  vote 
liv  proxy  in  the  olection  of  directors;  to  enforce  a  lien  upon  the  stock  of 
stockholders  for  debts  due  the  corporation  (chap.  47,  sees.  1S43,  1840,  1848, 
18515,  18(J3;  chap.  48,  sec.  1893 ;  see  also  Laws  of  1903,  pp.  74  and  79). 
E.V  imrte  Fisher,  20  S.  C.  190. 

5.  Procuring  the  Charter.  —  The  petition  must  be  signed  and  acknowl- 
edged by  i-ach  of  the  incoiporators,  and  must  then  be  signed  by  the  Secretary 
of  State.  He  then  issues  to  the  incorporators  a  commission  constituting  them 
a  board  of  corporators,  and  authorizing  them  to  open  books  of  subscription  to 
the  capital  stock  of  the  proposed  corporation,  after  such  public  notice,  not 
exceeding  ten  days,  as  may  be  re(iuired  in  such  commission.  When  not  less 
than  fifty  per  cent  of  the  capital  stock  shall  have  been  subscribed  by  honajide 
purchasers,  the  board  of  corporators  shall  call  the  subscribers  together.  At 
this  meeting  the  company  sliall  organize  by  the  election  of  a  board  of  direc- 
tors,  not  to  exceed  nine  in  number.  They  shall  also  adopt  by-laws.  The 
board  of  directors  shall  then  elect  from  their  number  a  pr^sident,  a  secretary, 
and  a  treasurer.  Upon  the  payment  to  the  treasurer  of  the  corporation  of  at 
least  twenty  per  cent  of  the  aggregate  amount  of  the  capital  subscribed,  payable 
in  money,  and  also  upon  delivery  to  such  officer  of  at  least  twenty  pei-  cent  of 
the  property  subscribed  to  the  aggregate  amount  of  the  capital  stock,  the  board 
of  corporators,  or  a  majority  of  them  shall,  over  their  signature,  certify  to  the 
Secretary  of  State  that  all  the  requirements  of  law  have  been  complied  with. 
This  certificate  is  known  as  the  "  return  of  the  corporators."  Upon  the  filing 
of  the  return  and  the  receipt  of  the  charter  fee,  and  upon  payment  of  all  filing 
fees,  the  Secretary  of  State  issues  to  the  board  of  corporators  a  certificate 
known  as  a  charter.  Thereupon  a  copy  of  the  charter  must  be  recorded  iu 
the  office  of  the  register  of  conveyances  or  clerk  of  each  county  wherein  the 
corporation  shall  have  a  business  office.  In  cases  where  by  the  terms  of  the 
declaration  the  capital  stock  of  the  corporation  is  to  be  paid  in  instalments, 
the  treasurer  may  issue  stock  when  fifty  per  cent  of  the  first  instalment  of  the 
capital  stock  lias  been  paid  in.  and  the  provisions  of  the  act  have  in  other 
resi)ects  been  complied  with.  Collateral  inquiry  into  validity  of  corporate 
existence  is  forbidden  (chap.  48,  sees.  1880,  1885). 

0.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  cor]iorate  indebtedness. 

7.  Organization  Tax.  —  On  capital  stock  not  exceeding  $100,000,  one 
mill  on  each  dollar;  from  .'$1(}0,000,  and  not  exceeding  §1,000,000,  one-half 
mill  on  each  dollar  in  addition  to  the  $100  on  the  first  $100,000  ;  exceed- 
ing 81,000,000,  one-quarter  mill  on  each  dollar  in  addition  to  $550  on  the  first 
§1,000,000  (chap.  4.S,  sees.  188S,  1889  ;  Laws  of  1901,  chap.  248). 

8.  Filing  and  Recording  Fees.  —  Fee  to  the  Secretary  of  State  for  re- 
cording petition  for  incorporation,  $o.  For  recording  return  of  Board  of 
Corporators,  $3.     For  recording  articles  in  local  county  office,  $2. 

9.  Commencing  Business.  —  (See  also  ante,  "  Procuring  Charter.")  The 
corporation  must  organize  and  commence  business  within  two  years  from  the 
date  of  its  incorporation  or  the  date  of  the  commission  appointing  the  board 
of  corporators  (chap.  47,  sec.  1850). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State,  in  the  absence  of  any  statute  providing  otherwise  (see  chap. 
47,  sec.  l>>l<i). 

11.  Meetings  of  Stockholders  and  Directors.  —  At  least  one  meeting  of 

you 


SYNOPSIS-DIGEST    OF   INCORPORATION   ACTS. 

the  stockholders  shall  be  held  annually  within  the  State.     Directors'  meetings 
may  be  held  at  such  place  as  the  by-laws  may  provide  (chap.  47,  sec.  1846). 

12.  Directors'  Qualifications  and  Liabilities.  a.  Qualifications.  — 
There  may  be  any  number  of  directors  not  exceeding  nine.  There  are  no 
residential  requirements  (chap.  48,  sec.  1SS3). 

h.  Liabilities. —  Directors  are  liable  for  making  false  representations  as  to 
resources  and  foi'  misrepresentations  in  certificates  (chap.  48,  sec.  1843). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  creditors  only 
to  the  extent  of  their  unpaid  stock  subscriptions  (Cons.,  1895,  An.  IX. 
sec.  18). 

M.  C.  Mills  V.  Springs,  56  S.  C.  534 ;  35  S.  E.  222 ;  Lauraglen  Mills  v.  Kuff,  57 
S.  C.  53  ;  35  S.  E.  387 ;  Williams  v.  Beuet,  34  S.  C.  112 ;   13  S.  E.  97. 

14.  Stock  Certificates. — Each  stockholder  is  entitled  to  a  certificate 
under  the  seal  of  the  corporation,  signed  by  the  treasurer  (chap.  47,  sec.  1847). 

15.  Preferred  Stock.  —  There  is  express  provision  for  the  issuance  of 
preferred  stock  (chap.  47,  sec.  IS.jO). 

16.  Payment  of  Capital  Stock.  —  Stock  can  be  issued  only  for  labor 
done,  or  money  or  property  actually  received  (chap.  47,  sec.  1855;  chap.  48, 
sec.  1882).  Unless  the  charter  provides  that  stock  may  be  paid  in  instal- 
ments, it  cannot  be  issued  until  fully  paid  (chap.  48,  sec.  18!)4).  No  sub- 
scriptions in  labor  or  property  can  be  received  unless  the  same  and  value 
thereof  is  approved  by  the  Board  of  Corporators  (chap.  48,  sec.  1882). 

17.  Books.  —  Books  are  required  to  be  kept  open  to  inspection  of  stock- 
holders, and  it  may  be  construed  from  the  statute  that  they  must  be  kept  in 
the  State  (rdiaj..  48,  .sec.  1807). 

18.  Ofiice  and  Agent.  —  There  are  no  express  requirements  as  to  having 
a  principal  ollioe  or  place  for  the  transaction  of  business  within  the  State,  but 
by  construction  it  is  necessary  to  maintain  a  domiciliary  ofiice.  (See  Crom- 
well V.  Ins.  Co..  2  Rich.  Law,  512.) 

19.  Reports. —  Must  report  to  the  Comptroller-Ceneral  annually  during 
the  month  of  February  (Laws  of  1901,  chap.  269). 

20.  Anti-Trust  Statute.  —  There  is  an  anti-trust  statute  in  force  in  South 
Carolina.     (See  C.  C,  l!i02,  .sees.  281.5.  2817.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  may  be 
forfeited  for  non-user  for  five  years,  or  for  non-payment  of  taxes,  or  for  non- 
payment of  annual  franchise  tax,  or  for  violation  of  anti-trust  statute  (chap. 
48,  sec.  1898;  chap.  47,  sec.  18G5;  see  also  C.  C,  1902,  sees.  308,  2845,  2847). 
It  may  also  be  forfeited  for  failure  to  organize  and  commence  business  within 
two  years  from  incorporation  (chap.  47,  sec.  1850). 

22.  Amendments.  — The  charter  may  be  amended  only  for  the  purpo.se 
of  increasing  or  decreasing  the  capital  stock,  or  for  the  purpo.se  of  changing 
the  corporate  name  (chap.  47,  sees.  1851,  18.52,  as  amended  by  Laws  of  1903, 
pp.  72-74;  Laws  of  1901.  chap.  24H). 

23.  Extension  of  Corporate  Existence.  —  Provision  is  made  for  exten- 
sion of  coipniate  exiNtenc'c      (.See  cliiip.  17,  sec.  1871;  chap.  48,  sec.  1891.) 

21.  Dissolution.  —  Corporate  powers  cea.se  if  organization  is  not  com- 
lilrtcd  and  hu.^iness  commenced  within  two  years,  and  coinl  of  common  pleas 
may  di.ssolve  any  company  for  non-u.sfr.  y\n\  also  di.s.solve  voluntarily  by 
ri'solntion  of  stockhohlers  rf-prcsenting  a  majority  of  cajiital  stock  (chap.  47, 
sees.  1860,  1873;  Law.s  of  1902.  .Act  No.  .560;  see  Code  of  (  ivil  Procedure, 
1902,  sec.  265;  Laws  of  1004,  chap.  269). 

301 


IXrORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

25.  Annual  License  Fee.  —  I'lulor  the  francliise  tax  of  1003,  which  did 
not  go  into  elTort  until  April  1,  IDOl,  all  business  corponitioiis  except  those 
of  a  quasi-public  nature,  nmst  pay  to  the  State  Treasurer  on  or  before  April  1st 
of  each  vear  an  annual  license  fee  of  one-half  mill  upon  every  dollar  i)ai(l  in 
upon  the  capital  stock,  and  not  less  than  five  dollars  in  any  case  (Laws  of 
lil04,  cliap.  2(i!)). 

'2ti.  Foreign  Corporations.  —  Foreign  corporations  must  file  with  the 
Secretary  of  State  a  declaration  designating  principal  place  of  business  in  the 
State  and  the  name  of  agent  to  receive  service  of  process,  and  must  also  file 
in  same  office  a  copy  of  tlie  charter  and  by-laws  with  amendments.  Must 
also  file  aiumal  statement  showing  residence  of  corporation,  amount  of  capital 
stock  actually  jiaid,  names  of  officers  and  board  of  directors  with  their  resi- 
dence, etc.  'riiey  are  required  to  pay  a  fee  of  one-half  mill  on  each  dollar  of 
property  owned  by  them  within  the  State  (C.  C,  1902,  sees.  1779,  1705,  2360; 
(Laws  of  1904,  chaps.  247,  269). 

Central  R.  K.,  etc.  Co.  v.  Company,  32  S.  C.  319;  11  S.  E.  192;  Cone,  etc.  Co.  v. 
Poole,  41  S.  C.  70;  19  S.  E.  203;  HoUingsworth  v.  Sou.  R.  R.  Co.,  86  Fed.  353. 


SOUTH   DAKOTA. 

(The  references  cited  below  are  to  the  Revised  Civil  Code  of  1903  and  to  the  Compiled 
Laws  of  1887,  unless  otherwise  stated.) 

1.  Statutes  under  -vyhich  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  South  Dakota  is  to  be  found  in  Revised 
Civil  Code  of  1903,  sees.  396-479  (Compiled  Laws  of  1887,  sees.  2889-2971). 
Those  relating  to  mining,  manufacturing,  and  other  industrial  corpora- 
tions are  sees.  780-797,  Revised  Civil  Code,  1903  (Compiled  Laws,  1887, 
sees.  3108  to  3125).  The  provisions  relating  to  amendment  of  charters  are 
found  in  chap.  106,  Session  Laws  of  1903.  As  to  the  extension  of  cor- 
porate existence,  see  chap.  105,  Session  Laws  of  1903.  Under  this  act  cor- 
porations may  be  formed  for  any  lawful  purpose.  Special  acts  are,  however, 
provided  for  incorporation  of  railway,  street  railway,  wagon  road,  irrigation, 
insurance,  loan,  trust,  mortgage,  and  for  banks  of  discount. 

2.  Incorporators.  —  Three  or  more,  one-third  of  whom  must  be  residents 
of  the  State  (R.  C.  C,  sec.  407 ;  C  L.,  sec.  2900). 

Singer  Mfg.  Co.  v.  Peck,  9  S.  D.  29 ;  67  N.  W.  947. 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  certificate  nmst 
set  forth  : 

a.  Name.  —  The  Secretary  of  State  will  not  permit  the  use  of  another 
name  already  in  use  by  a  domestic  corporation. 

b.  Purposes.  — The  purpose  for  which  it  is  formed.    The  Secretary  of  State 
allows  the  insertion  of  any  number  of  purposes  not  covered  by  special  acts. 

c.  Dovucile.  --  Place  where  the  principal  business  of  the  corporation  is  to 
be  transacted. 

d.  Duration.  —  Not  to  exceed  twenty  years. 

e.  Directors.  —  Number  and  names  and  residences  of  those  who  are  to  serve 
until  the  election  of  their  successors,  and  qualifications  must  also  be  set  forth. 

/.     Capital  Stock.  —  Amount  and  number  of  shares  into  which  same  is 
divided.     There  is   no  limit  as  to  the  amount  of  capital  stock.     The   par 
value  of  shares  may  be  any  amount  (II.  C.  C,  sec.  408;  C.  L.,  sec.  2902). 
302 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

4.  Statutory  Powers  —  In  addition  to  the  statutory  enumeration  of 
common  law  powers  the  act  provides  for  voting  by  proxy  at  elections  of 
directors,  for  cumulative  voting,  for  forfeiture  of  shares,  for  non-payment 
of  subscriptions,  for  having  a  business  office  without  the  State  but  within 
the  United  States,  and  for  holding  therein  any  meeting  of  the  stockholders  or 
directors;  for  removal  of  directors ;  for  extension  of  corporate  existence;  for 
purchase  of  the  corporation's  own  stock  ;  for  issuing  stock  in  exchange  for 
property  or  services  (R.  C.  C,  sec.  427 ;  C.  L.,  sec.  2199  ;  R.  C.  C,  sec.  429  ; 
C.  L.  2921 ;  Con.  Art.  XVII.  sec.  5  ;  R.  C.  C,  sees.  453-469  inclusive ;  R.  C.  C, 
sec.  786;  C.  L.,  sec.  3114;  R.  C.  C,  sec.  438;  C.  L.,  sec.  2930;  R.  C.  C,  sec. 
439;  C.  L.,  sec.  2931  ;  Laws  of  1903,  chap.  105;  R.  C.  C,  sec.  425;  C.  L.,  2917 ; 
R.  C.  C,  sec.  422;  C.  L.,  sec.  2914;  R.  C.  C,  sec.  464;  C.  L.,  sec.  2950;  Con., 
Art.  XVII.  sec.  8). 

Summers  v.  Company,  86  N.  W.  749. 

5.  Procuring  the  Charter.  —  The  charter  must  be  signed  and  acknowl- 
edged by  the  incorporators  before  the  same  can  be  filed  and  certificate  of 
incorporation  issued.  Two  of  the  incorporators  must  take  oath  tliat  the 
corporation  is  not  formed  for  the  i)urpose  of  enabling  it  to  avoid  the  purposes 
of  the  South  Dakota  Anti-trust  Act,  and  upon  the  filing  of  tlie  articles  the 
Secretary  of  State  issues  a  certificate  of  incorporation  (R.  C.  C,  sees.  410,  411 ; 
C.  L.,  sees.  2904,  2905;   Revised  Penal  Code,  sec.  781). 

0.  Corporate  Indebtedness.  —  Debts  cannot  be  contracted  beyond  the 
amount  of  .stock  suliscribed  (R.  C.  C,  sec.  436;  C.  L.,  sec.  2928). 

7.  Organization  Tax.  — Where  authorized  capital  stock  is  §25,000  or  less, 
the  organization  tax  is  610;  where  it  does  not  exceed  §100,000,  SI 5;  where 
it  does  not  exceed  §500,000,  S20 ;  where  it  does  not  exceed  §1,000,000,  §25; 
over  §1.000.000.  SlO  (Laws  of  1903,  chap.  141,  sec.  1). 

.s.  Filing  and  Recording  Fees.  —  Where  copy  of  charter  is  prepared,  the 
charge  for  certified  copy  of  the  articles  of  incorporation  is  §1  (Laws  of  1903, 
chap.  141,  .sec.  4).  For  any  excess  of  one  thousand  words  in  articles,  a  fee 
of  10  cents  per  fulio  is  charged. 

9.  Commencing  Business.  —  Unless  tlie  corporation  organizes  and  com- 
mences the  transaction  of  business  or  the  construction  of  its  works  within  one 
year  from  the  date  of  its  incorporation,  its  corporate  powers  cease.  Every 
corporation  must  within  one  month  after  filing  articles  of  incorporation  adopt 
a  code  of  by-laws  for  its  government,  but  no  penalty  or  forfeiture  is  declared 
in  case  of  non-compliance  with  this  provision,  and  it  is  regarded  as  directory 
only  (R.  C.  C,  sec  411;  C.  L.,  sec.  2905).  No  collateral  inquiry  into  cor- 
porate existence  is  perraitt<-d  (R,  C,  sec.  399;  C.  L.,  sec.  2892). 

10.  Organization  Meeting.  —  The  organization  meeting  may  be  held  at 
the  j>riiicipal  office  of  the  corporation  without  the  State  if  provision  is  made 
therefor  in  the  articles,  otherwise  it  must  be  held  within  the  State  (R.  C.  C, 
sec.  7bG;  C.  L.,  sec.  3114;  R.  C.  C:.,  sec.  440;  C.  L.,  sec.  2932). 

11.  Meetings  of  Stockholders  and  Directors.  —  Incorporators',  stock- 
holdrr.s',  and  iliroctors'  meetings  must  ]«■  held  at  tin;  office  or  principal  place  of 
business  of  tlie  comjiany.  Ail  meetings  of  stdckholders  and  directors  of  mining, 
manufacturing,  and  other  industrial  corjifirations  may  l)e  held  at  the  outside 
office  named  in  the  articles  of  incorporation;  and  this  may  be  provided  for  in 
the  articles  ;  and  the  articles  may  be  amended  to  chan:.,'rf  the  location  of  the 
nut^ide  office.  The  mode  of  calling  meetings  is  as  ]»rovided  in  the  by-laws. 
Tlie  domiciliary  office  is  kept  at  the  place  in  the  State  named  in  the  articles 

3g;j 


INCOnrORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

fts  the  principal  plaoe  of  business.  Tlie  original  books  and  records  may 
bo  kept  at  llic  outside  business  oflice  if  there  be  one  (R.  C.  C,  sec.  78(); 
C.  L.,  soo.  .•511  I  ;  see  also  U.  C.  C,  sec.  410;  V.  L.,  sec.  2U:V2). 

1*2.  Directors'  Qualificatioua  and  Liabilities,  a.  Qiia/i/lcniian.t.  —  The 
statutes  of  South  Dakota  provide  that  one-third  of  the  officers  of  all  business 
corporations  shall  be  residents  of  the  State.  The  bar  of  the  State  generally 
regards  this  provision  as  being  applicable  only  to  the  executive  heads  of  the 
corporation,  such  as  president,  vice-president,  secretary,  and  treasurer.  The 
Secretary  of  State,  however,  in  the  absence  of  any  judicial  decision  on  the 
subject  of  a  controlling  nature,  and  in  order  to  protect  himself,  requires  that 
one-third  of  the  first  board  of  directors  shall  be  residents  of  the  State. 
They  are  elected  annually  by  a  majority  vote  of  stockholders.  The  board 
must  be  composed  of  at  least  three  and  not  more  than  eleven  members. 
Directors  must  be  stockholders  to  an  amount  to  be  fixed  by  the  by-laws 
(II.  C.  C,  sec.  i34;  C.  L.,  sec.  292G). 

h.  Liahilities.  —  Directors  are  liable  for  the  illegal  declaration  of  dividends, 
or  for  the  unlawful  withdrawal  of  capital,  or  for  any  violation  of  law  applying 
to  corporations  whereby  the  latter  became  insolvent.  Directors  assenting  to 
such  violation  are  jointly  and  severally  liable  for  all  debts  contracted  after 
such  violation  (R.  C.  C,  sec.  430;  C.  L.,  sec.  2928;  R.  C.  C,  sec.  787;  C  L., 
sec.  3115). 

13.  Stockholders'  Liabilities. —  Stockholders  are  liable  to  the  amount 
of  their  unpaid  stock  subscriptions  (R.  C.  C,  sec.  431;  C.  L.,  sec.  2933). 
They  are  also  liable  for  labor  claims  (R.  C.  C,  sec.  783;  C.  L.,  sec.  3111). 

S.  B.  T.  M.  Co.  V.  Compaiiv,  4  S.  D.  173;  56  N.  W.  98  ;  Bu.sby  v.  Keilly  et  al, 
6  S.  D.  401  ;  61  N.  W.  164 ;  Siuger  Mfg.  Co.  v.  Feck,  9  S.  D.  29 ;  67  N.  W.  947. 

14.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
signed  by  the  president  and  secretary  (R.  C.  C,  sec.  423;  C.  L.,  sec.  2915). 

15.  Preferred  Stock.  —  There  is  no  express  provision  of  law  authorizing 
the  issuance  of  preferred  stock.  The  Secretary  of  State,  however,  permits  the 
insertion  of  provisions  in  the  articles  authorizing  the  issuance  of  preferred 
stock. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  exchange  for 
money,  labor  done,  or  money  or  property  actually  received  (Cons.,  Art.  XVII. 
sec.  8).  The  act  provides  that  the  directors  named  in  the  articles  of  incor- 
poration must  proceed  to  open  books  of  subscription  to  the  capital  stock 
unsubscribed  and  to  secure  subscriptions  to  the  full  amount  of  the  fixed 
capital  (R.  C.  C,  sec.  421;  C.  L.,  sec.  2913). 

17.  Books.  —  Every  corporation  must  keeji  a  journal  of  meetings  of 
directors  and  stockholders.  They  must  also  keep  a  stock  and  transfer  book, 
which  with  the  journal  is  open  to  inspection  of  stockholders,  directors,  and 
creditors  of  the  corporation,  containing  a  record  of  all  stock,  the  names  of 
stockholders,  alphabetically  arranged,  instalments  jiaid  or  unpaid,  transfers, 
etc.  Also  a  book  of  by-laws,  to  be  open  to  inspection  during  office  hours. 
The  law  does  not  provide,  however,  that  any  of  these  books  shall  be  kept 
within  the  State,  and  provisions  in  the  articles  of  incorporation  for  keeping 
them  at  the  outside  office  are  regularly  allowed  by  the  Secretary  of  State 
(R.  C.  C,  sec.  423;  C.  L.,  sec.  2915  ;  R.  C.  C,  sec.  428;  C.  L.,  sec.  2920  ; 
R.  C.  C,  sec.  445;  C.  L.,  sec.  2937;  R.  C.  C,  sec.  782 ;  C.  L.,  sec.  3110). 

18.  OfiBce.  —  The  law  provides  that  every  corporation  having  a  business 
oflBce  out  of  the  State  must  have  its  main  office  for  the  transaction  of  business 

304: 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

within  the  State,  to  be  set  forth  in  the  articles  (R.  C.  C,  sec.  786;  C.  L.,  sec. 
31U). 

19.  Reports.  —  The  statute  provides  that  business  corporations  doing 
bu.siness  within  the  State  shall  annually  within  twenty  days  from  the  first 
day  of  January  make  a  report  which  must  be  published  in  some  newspaper 
at  or  nearest  to  the  place  where  the  business  of  the  corporation  is  carried  on, 
which  report  must  state  the  capital  stock  and  the  amount  thereof  actually 
paid  in,  the  amount  and  nature  of  indebtedness,  and  tlie  amount  due  the 
corporation,  the  number  and  amount  of  dividends,  and  when  paid,  and  the 
net  amount  of. profits.  Such  report  must  be  signed  by  the  president  and  a 
majority  of  directors,  and  be  verified  by  oatli  of  the  president  or  secretary,  and 
filed  in  the  office  of  register  of  deeds  of  county  where  the  business  of  the 
corporation  is  carried  on.  The  only  penalty  provided  for  failure  to  comply 
with  the  statute  is  that  a  person  who  wilfully  neglects  or  refuses  to  make,  sign, 
or  publish  such  report  shall  be  guilty  of  misdemeanor  (R.  C.  C,  sec.  784; 
C.  L.,  sec.  .3112). 

20.  Anti-Trust  Statute.  —  There  is  a  somewhat  drastic  anti-trust  statute 
in  force  in  South  Dakota  (Revised  Penal  Code,  1903,  sees.  770  to  781  inclusive). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Unless  the  cor- 
poration is  organized  and  commenced  business  within  two  years  after  incor- 
poration the  corporate  powers  cease.  Charters  may  also  be  forfeited  by  the 
State  on  any  of  the  following  grounds  :  For  violating  any  of  the  laws  creating, 
altering,  or  renewing  corporations  ;  by  violating  any  express  provisions  of  the 
law  whereby  the  corporation  shall  have  forfeited  its  charter  by  abuse  of  its 
power;  by  failure  to  exercise  its  powers;  whenever  it  shall  have  done  or 
omitted  to  do  any  act  which  amounts  to  a  surrender  of  its  corporate  rights ; 
for  exercising  franchi.ses  or  privileges  not  conferred  upon  it  by  law  (R.  C.  C, 
sec.  447  ;  C.  L.,  sec.  2939  ;  R.  C.  C,  sec.  571 ;  C.  L.,  sec.  5340). 

22.  Amendments.  —  Articles  may  be  amended  so  as  to  modify  or  enlarge 
corporate  business  or  purposes,  change  number  of  directors,  change  name  or 
location  of  its  business  within  the  State  or  without  the  State,  increase  or 
decrease  the  capital  stock,  or  in  any  other  respect  by  vote  of  two-thirds  of  all 
outstanding  stock  at  any  regular  or  special  meeting  called  for  that  purpose 
after  thirty  days'  notice  (sixty  days  for  increase  of  stock)  given  to  each  stock- 
holder stating  nature  of  proposed  amendment.  After  notice  of  proposed 
amendment  is  served  upon  stockholders,  time  may  be  waived  by  all  of  them, 
and  amendment  can  be  adopted  immediately.  Capital  stock  cannot  be 
dimini.slied  to  an  amount  less  than  indebtedness  of  corporation  or  estimated 
cost  of  works  which  it  may  be  the  purpose  of  the  corporation  to  construct. 
After  amendment  is  a<lopted,  the  president  and  secretary  of  the  corporation 
shall  {)repare  in  duplicate  a  certificate  sotting  forth  amendment,  stating 
number  of  votes  cast  therefor,  and  total  number  of  shares  of  stock  subscribed 
and  outstanding,  and  that  legal  notice  was  given.  One  of  these  certificates 
must  be  filed  with  the  Secretary  of  State,  and  the  other  with  .secretary  of  the 
corporation.  The  signature  of  president  and  secretary  to  such  certificate 
must  be  acknowledged  before  some  officer  authorized  (o  take  Jicknowledgments, 
who  knows  the  parties  signing  the  same  to  be  the  pn-siflent  and  secretary  of 
the  corporation,  and  when  such  certificate  is  filed  with  the  Secretary  of  State 
he  shall  issue  a  certificate  of  amendment,  setting  forth  in  what  ]>articular  tlio 
original  articles  of  incorporation  have  been  amended  (Laws  of  1903,  chap.  100, 
sees.  1-7  inclusive). 

3G5 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONfl, 

2:1.  Extension  of  Corporate  Existence.  —  Corporate  existence  may  be 
pxtcuilcil  for  a  t'urllier  period  of  twenty  years  if  desired  (Lavv.s  of  190;5,  ciiap. 

10.">). 

2i.  Dissolution.  —  Yoluutary  dissolution  i.s  effected  by  apiilication  to 
the  circuit  court  of  the  county  where  the  corporation's  principal  place  of 
business  is  situated,  upon  verified  petition  of  a  majority  of  the  board  of 
directors,  the  proceedings  being  simple  and  brief.  Involuntary  dissolution  is 
effected  under  code  of  civil  procedure  by  action  in  the  name  of  the  State,  on 
leave  of  the  circuit  court  or  judge  (R.  C.  C,  sec.  44G;  C.  L.,  sec.  2938). 

25.  Annual  License  Fee.  —  There  is  no  annual  license  fee. 

26.  Foreign  Corporations.  —  Before  any  foreign  corporation  can  transact 
business  within  the  State,  or  acquire,  hold,  and  dispose  of  property  within  the 
state,  or  sue  in  the  courts  therein,  it  must  file  in  the  office  of  the  Secretary  of 
State  a  duly  authenticated  copy  of  its  charter  or  articles  of  incorporation,  and 
shall  also  appoint  an  agent  within  the  State  upon  whom  process  may  be  had. 
A  duly  authenticated  copy  of  the  appointment  of  such  agent  or  officer  must  be 
filed  and  recorded  in  the  office  of  the  Secretary  of  State,  and  register  of  deeds 
of  the  county  wliere  said  agent  resides  (R.  C.  C,  sec.  883;  C.  L  ,  sec.  3190). 

Wright  V.  Lee  et  al,  4  S.  D.  237  ;  55  N.  W.  931  ;  Acme  Mer.  Agency  v.  Rochford, 
10  S.  D.  203  ;  72  N.  W.  466 ;  Foster  v.  Company,  5  S.  D.  57  ;  58  N.  W.  9. 

TENNESSEE. 

(The  references  cited  below  are  to  the  Code  of  1884  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate.— 
The  Business  Corporation  Act  of  Tennessee  is  based  upon  the  Act  of  March 
19,  1875  (Session  Laws  of  1875,  chap.  142).  The  law  is  peculiar  in  that 
it  specifically  prescribes  for  what  purposes  companies  may  be  incorporated, 
and  sets  forth  the  form  of  charter  for  each.  The  above  "  Charter  Act  "  has 
been  amended  from  time  to  time  until  now  it  is  possible  to  incorporate  in 
Tennessee  under  said  act  for  ordinary  business  purposes  (Laws  of  1903,  chap. 
474). 

2.  Incorporators.  —  Xot  less  than  five,  except  for  brewery  corporations 
where  only  three  incorporators  are  required.  There  are  no  residential  require- 
ments (.sec.  1G92;  Laws  of  1903,  chap.  474). 

3.  Contents  of  the  Certificate  of  Incorporation.  —  The  forms  for  draw- 
ing charters  are  set  out  at  length  in  the  statutes,  and  vary  according  to  the 
purposes  sought  to  be  obtained  by  incorporation.  Speaking  generally,  all  the 
forms  set  forth:  first,  name  of  the  corporation,  which  the  Secretary  of  State 
requires  shall  be  different  from  that  of  any  existing  corporation.  Second, 
the  purposes  must  be  set  forth,  and  the  incorporators  are  limited  sti'ictly  to 
purposes  included  in  one  class.  Third,  the  capital  stock  is  unlimited  except 
in  the  case  of  brewery  companies,  which  must  be  capitalized  for  not  less 
than  $.5,000  and  not  more  than  f.jOO,000.  Fourth,  an  enumeration  of  the 
general  powers  of  the  corporation,  which  are  in  substance  merely  an  enumera- 
tion of  common  law  powers.  The  statutoiy  form  also  contains  a  large 
number  of  provisions  for  the  regulation  of  the  internal  affairs  of  the  corpora- 
tion. Jt  also  provides  that  the  first  board  of  directors  shall  consist  of  the 
incorporators  named  in  the  charter  of  incorporation  (sees.  1G92,  1852,  Act  of 
April  30,  1897  ;  Laws  of  1899,  chaps.  17,  224,  300,  304;  Laws  of  1003,  chap. 
474).     Duration  may  be  unlimited  if  desired. 

3G6 


SYNOPSIS-DIGEST    OF   INCORPORATION   ACTS. 

4.  Statutory  Po-wers. —  The  statute  enumerates  the  coninion  law  powers 
of  corporations,  and  in  addition  thereto  grants  the  following  powers:  For  the 
purpose  of  repairs,  rebuilding,  or  to  meet  contingencies,  or  for  the  purpose  of 
a  sinking  fund,  corporations  may  establish  a  fund  of  which  they  may  loan 
and  in  relation  to  wiiich  they  may  take  proper  securities.  Mining  companies 
are  authorized  to  subscribe  for  stock  in  railway  corporation  whose  line  of  road 
is  contiguous  to  their  works.  Manufacturing  corporations  are  given  power 
to  locate  on  their  own  lands,  elevators,  hoisting,  warehouses,  transfer  trucks, 
etc.  Mining  corporations  are  given  power  to  purchase,  use,  or  dispose  of 
patent  rights.  All  corporations  are  given  power  to  vote  by  proxy.  To 
consolidate  with  other  corporations  engaged  in  the  same  general  business. 
Also  to  sell  in  its  entirety  all  the  assets  of  the  corporation  to  any  corpoi-ation 
engaged  in  the  same  general  line  of  business  (see  references  cited  at  end  of 
sec.  3;  also  sees.  170i,  1709,  1710,  1711  a,  1853,  1860,  1861,  1862,  186-4,  1866, 
1867,  1868,  1872,  Act  of  March  28,  1887 ;  Laws  of  1903,  chap.  486). 

5.  Procuring  the  Charter.  —  Incorporators  must  subscribe  and  acknowl- 
edge the  execution  of  the  charter,  which  is  in  fact  a  petition  for  incorpora- 
tion. This  instrument  when  so  acknowledged  must  be  registered  in  the 
county  where  the  principal  office  of  the  company  is  situated,  and  also  in  the 
office  of  the  Secretary  of  State.  The  latter  officer  issues  a  certificate  of 
registration  which  in  turn  must  be  registered  in  the  register's  office  of  the 
county  where  the  principal  business  office  of  the  company  is  situated. 
Thereupon  the  formation  of  the  corporation  is  completed  (sees.  1692,  1691). 
Collateral  inquiry  into  the  legality  of  corporate  existence  is  forbidden  (sees. 
1693,  1712  ;  Laws  of  1903,  chap.  474). 

Shields  v.  Clifton  Co.,  94  Teun.  123  ;  28  S.  W.  668. 

6.  Corporate  Indebtedness.  —  Corporations  are  limited  in  the  creation 
of  debts  to  tlie  amount  of  the  authorized  capital  stock  (sec.  1858;  Laws  of 
1903,  chap.  471) 

7.  Organization  Tax.  —  For  business  corporations  a  tax  of  one-tenth  of 
one  per  cent  on  the  authorized  capital  stock  is  exacted.  There  is  also 
a  registration  tax  of  810  (Act  of  June  17,  1895  ;  Laws  of  1897,  chap.  32; 
Laws  of  1899,  chap.  432). 

8.  Piling  and  Recording  Pees.  —  Ten  dollars  to  Secretary  of  State  for  filing 
articles  of  incorporation;  to  register  of  deeds,  83:  for  certified  copy  of  articles 
of  incori)oratif)n,  fee  averages  ^5  ;  to  fees  for  certificate  of  incorporation,  $3. 

9.  Commencing  Bu.<3iness.  —  Bu.'iiness  may  be  commenced  as  soon  as 
the  chartei-  is  legistered  as  required  by  law  and  the  organization  completed. 
If  the  corporation  establishes  agencies  in  any  other  county,  the  ciiarter  must 
be  recorded  there  (.sec.  1691). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  tiie  State,  in  the  absence  of  any  statute  providing  otherwise.  Tiie 
incorporators  act  as  the  first  board  of  directors. 

11.  Meetings  of  Stockholders  and  Directors. —  Annual  stockholders' 
meeting.s  nnist  lie  licld  within  the  State.  Diiedurs' meetings  may  be  held 
without  the  .Sl.ite  it"  the  by-laws  so  piovi.ie  (sees.  1706,  1H63). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualificaiums  — There 
must  be,  except  in  the  case  of  brewery  companies,  wliere  tliere  may  be  three, 
at  least  five  directors.  There  are  no  re.'<idcntial  requirements  (sees.  1702, 
1706;  Laws  of  1903,  chap.  474). 

b.    Liahililics.  —  Directors  are  liaide  for  illegal  declaration  of  diviilend.s,  or 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

for  autlioriziiij:  tlu>  creation  of  any  indebtedness  in  excess  of  tlio  capital  stock 
paid  in.  Directors  are  liable  for  loans  to  stockliolders  in  mining  corporations, 
quarrying,  boring,  or  manufacturing  companies.  They  are  also  liable  for 
intentional  fraud  in  failing  to  comply  substantially  with  the  articles  of  in- 
corporation, or  in  deceiving  the  public  or  individuals  in  relation  to  their 
liabilities  (sees.  1710,  1717,  1856,  ISo?,  1S58,  1850,  Laws  of  1897,  chap.  49; 
Laws  of  190;5,  chap.  474). 

Allisou  r.  Coal  Co.,  87  Tcnu.  f.O  ;  9  S.  W.  220. 

lo.  Stockholders'  Liabilities.  —  Stockholders  are  liable  for  the  amount 
of  their  unpaid  stock  subscriptions.  They  are  also  jointly  and  severally 
liable  for  moneys  due  or  owing  to  the  laborers,  servants,  clerks,  or  operators 
of  the  company  in  case  the  corporation  becomes  insolvent  (sees.  1708,  1858; 
Laws  of  1903.  chap.  474). 

14.  Stock  Certificates.  —  The  par  value  of  stock  certificates  may  be  $100 
or  less  (sec.  205-J).  Each  shareliolder  is  entitled  to  a  certificate  showing  t  lie  num- 
ber of  shares  held  by  him  signed  by  such  officers  as  the  by-laws  may  prescribe. 

15.  Preferred  Stock.  —  The  statute  does  not  expressly  authorize  the 
issuance  of  preferred  stock. 

16.  Payment  of  Capital  Stock-  — In  the  case  of  mining,  quarrying, 
boring,  and  manufacturing  companies  nothing  but  cash  or  land  at  a  fair 
cash  valuation  can  be  accepted  in  payment  of  capital  stock.  Manufacturing 
companies  are,  however,  authorized  to  receive  an  assignment  of  a  patent  in 
payment  of  stock  subscribed  to  the  amount  of  the  value  of  such  patent. 
The  act  specifically  provides  that  the  amount  of  any  unpaid  stock  due  from 
the  subscriber  to  the  corporation  shall  be  a  fund  for  the  payment  of  any 
debts  due  from  the  corporation;  the  transfer  of  stock  by  any  subscriber 
does  not  relieve  him  from  payment  unless  his  transferee  has  paid  up  all  or 
any  of  the  balance  due  on  said  original  subscription  (sees.  1708,  1856,  1872  ; 
Laws  of  1903,  chap.  474). 

Searight  v.  Payne,  6  Lea,  283 ;  Kclley  v.  Fletcher,  94  Tenn.  1 ;  28  S.  W.  1099. 

17.  Books.  —  The  act  requires  the  keeping  of  books  showing  the  list  of 
stockholders,  with  their  respective  interests,  the  amount  paid  on  shares  sub- 
scribed, and  all  stock  transfers  by  and  to  whom  made  (sec.  1707;  Laws  of 
1903,  chap.  474). 

18.  Office  and  Agent.  —  There  are  no  expiess  statutory  provisions 
requiring  the  maintenance  of  an  office  and  agent  within  the  State,  liy  impli- 
cation, however,  the  company  must  maintain  a  domiciliary  office  within  the 
State.     (See  sec.  1093.) 

19.  Reports.  —  By  acts  adopted  previous  to  1903  semi-annual  statements 
are  required  of  banks  and  trust  companies  and  annual  statements  of  building 
and  loan  companies,  mining,  quarrying,  boring,  and  manufacturing  com- 
panies. Annual  statements  are  required  of  all  corporations  securing  their 
charters  under  the  Act  of  1903  (Laws  of  1903,  chap.  474).  The  report  must 
be  published  in  a  newspaper  printed  in  the  county  where  the  principal  office 
or  business  is  located,  showing  the  amount  of  capital  stock,  existing  habilities, 
and  list  of  names  of  stockholders. 

20.  Anti-Trust  Statute.  —  There  is  an  anti-trust  statute  in  force  in 
Tennessee.  (See  Act  of  March  10,  1890;  Act  of  March  30,  1891;  Act  of 
April  30,  1897.) 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  where  the  corporation  has  by  neglect,  non-user,  abuse,  or  surrender, 

3GS 


SYiNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

forfeited  its  corporate  rights.  Any  act  of  the  board  of  directors  as  a  board 
constituting  an  express  violation  of  the  statute  is  declared  to  be  a  forfeiture 
of  the  ciiarter  (sees.  1718,  4162  ;  see  also  sec.  2484  ;  Code  of  1896,  sec.  6625). 

22.  Amendments.  —  Charters  may  be  amended  for  the  purpose  of 
changing  the  name,  increasing  or  decreasing  the  capital  stock,  or  for  the 
purpose  of  obtaining  any  powers  granted  under  the  General  Act  (sees.  1695, 
1865,  1866  ;  Act  of  April  7,  1803). 

23.  Extension  of  Corporate  Existence.  —  Perpetual  existence  is  open 
to  incorporators  if  they  desire  it.  Tliere  is  no  provision  for  the  extension  of 
corporate  existence. 

24.  Dissolution.  —  The  corporation  may  be  dissolved  on  application  to 
the  courts.  Directors  are  by  statute  made  trustees  for  that  purpose  unless 
other  persons  are  appointed  by  the  court  (sees.  1719-1723;  Act  of  March  28, 
1887). 

25.  Annual  License  Tax.  —  See  sees.  6269,  6521  z;  also  Laws  of  1901, 
chap.  174. 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  with  the  Sec- 
retary of  State  a  copy  of  charter  and  have  abstract  thereof  recorded  in 
the  register's  office  of  each  county  in  which  they  propose  to  do  business  or  own 
land.  Tax  on  the  capital  stock  is  as  follows:  $100,(100  and  less,  S50;  up 
to  §250, 000,  $100;  to  $500,000,  $150;  to  .$1,000,000,  S200;  over  $1,000,000, 
^250  If  a  foreign  corporation  locates  its  principal  office  and  does  all  its 
business  in  and  from  Tennessee  and  has  all  of  its  main  property  holdings  in 
Tennessee,  it  must  pay  a  privilege  tax  of  one-tenth  of  one  per  cent  on  author- 
ized capital  stock.  For  filing  charter  of  foreign  corporation.  Secretary  of 
State  is  entitled  to  a  fee  of  $20 ;  for  each  abstract  thereof,  $20  (sees.  2546, 
2553  ;  Laws  of  1895,  chap.  21  ;  sec.  119,  Laws  of  1899,  chap.  2  ;  Laws  of  1899, 
chaps.  14-31 ;  Laws  of  1903,  chap.  239). 

State  V.  Schlitz  Brewing  Co.,  104  Tenu.  715  ;  59  S.  W.  1033. 


TEXAS. 

(The  references  cited  below  are  to  the  Revised  Statutes,  1805,  unless  otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. 
—  Tlie  l)U>iucss  Corporation  -Vet  of  Ti'xas  is  to  iie  found  in  ilie  Revised 
Statutes  of  1895,  .sees.  640-670  inclusive,  sees.  680-(i86,  .sees.  744-749  c,  and 
the  amendments  of  1897,  1899,  1900,  1901,  and  1903.  Special  acts  nre 
provided  for  railroad  and  insurance  corporations.  Under  the  General  Act 
corporations  are  divided  into  some  sixty-four  different  classes,  covering 
almost  all  lines  of  Imsiiies.s  (sec.  612). 

2.  Incorporators.  —  Three  or  more  persons.  Two  nmst  be  citizens  of 
Texa.s  (sees    611,  644). 

Iliimikoii  r.  Comj.any,  15  Tex.  .App.  .1.38  ;  39  S.  W.  CJI. 

'.',.  Contents  of  the  Articles  of  Incorporation. —  The  articles  must  set 
forth : 

a.  Ndrni:. — The  Secretary  of  Stati-  will  not  permit  the  u.so  of  a  name 
already  in  use  by  a  domestic  corporation. 

h.  Purpose. — Corporations  are  limited  in  their  purposes  to  those  naimd 
in  some  one  of  the  sixty-four  classes  referred  to,  except  in  cases  especially 
provided  for  otherwise.     (See  sec.  650a.) 

2i  :30Jj 


INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

c.  Domiciliari/  Office.  —  rUice  or  places  where  the  business  is  to  be  trans- 
acted. 

</.    Duration. Term   for  w)iich  it  is  to  exist   not  to  exceed  fifty  years. 

Where  no  period  is  limited  the  duralit)n  is  twenty  years. 

e.    Direclor.t. Number  and  names  and  residences  of  the  board  for  the 

first  year. 

f.'  Capital  Stock. —  Amount  tliereof  and  number  of  shares  into  which  it  is 
divided  (sec.  C4;j).  Both  capital  stock  and  par  value  thereof  may  be  any 
amount  (sec  033). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers  of  corporations,  the  following  additional  powers  are  granted : 
To  vote  by  proxy,  to  forfeit  stock  for  non-payment  of  assessments,  to  issue 
preferred  stock,  and  to  authorize  directors  to  adopt  by-laws  (sees.  651,  653, 
6GS,  6G9). 

5.  Procuring  the  Charter.  —  The  charter  must  be  subscribed  by  all  the 
incorporators  and  acknowledged  by  them.  The  charter  is  then  filed  in  the 
office  of  the  Secretary  of  State,  at  which  time  the  organization  tax  must  be 
paid.  Corporate  existence  commences  from  the  time  the  charter  is  filed  in 
his  office.  The  articles  must  be  accompanied  by  an  affidavit  of  one  of  its 
executive  officers,  to  the  effect  that  fifty  per  cent  of  its  authorized  capital 
stock  has  been  subscribed  for,  and  ten  per  cent  paid  in,  or  that  at  least 
§100,000  of  capital  stock  has  been  paid  in  in  cash  (sees.  6-14-G46). 

0.  Corporate  Indebtedness. — Corporate  indebtedness  cannot  be  created 
in  excess  of  the  amount  of  the  authorized  capital  stock  (sec.  653). 

7.  Organization  Tax.  —  For  the  charter,  $25  must  be  paid  to  the  Sec- 
retary of  State,  and  .'^5  for  each  ten  thousand  dollars  or  fraction  thereof  of 
capital  above  810,000  (sec.  2439). 

8.  Filing  and  Recording  Fees.  —  There  are  no  fees  due  the  Secretary 
of  State  other  than  the  organization  tax.  This  includes  a  certified  copy  of 
the  charter. 

9.  Commencing  Business.  —  The  smallest  amount  of  paid  up  capital 
stock  with  which  the  corporation  may  begin  business  is  ten  per  cent  of  its 
autliorized  capital,  of  which  fifty  per  cent  thereof  must  have  been  subscribed. 
In  lieu  of  the  foregoing,  the  corporation  may  furnish  satisfactory  evidence  to 
the  Secretary  of  State  that  at  least  S100,000  of  its  authorized  capital  stock 
has  been  paid  in  in  cash.  Business  must  be  commenced  within  three  years 
after  filing  the  charter,  and  in  default  thereof  the  corporation  may  be  dis- 
solved upon  proper  action  brought  by  the  State  for  that  purpose  (Laws  of 
1001,  chap.  15). 

10.  Organization  Meeting.  —  Tlie  organization  meeting  must  be  held 
within  the  State.  The  statute  makes  no  provision  for  the  organization  of 
the  corporation. 

11.  Meetings  of  Stockholders  and  Directors.  —  Meetings  of  stock- 
holders may  be  held  witliin  tlie  State  at  such  time  and  place  as  the  by-laws  of 
the  corporation  may  require.  Directors'  meetings  may  be  held  without  the 
State  if  the  by-laws  so  provide. 

12.  Directors'  Qualifications  and  Liabilities,  a.  Qualifications.  —  There 
must  be  at  least  three  and  not  more  than  thirteen  directors.  There  are  no 
residential  requirements  (sec.  651,  sub.  8). 

b.    Liabilities.  —  Directors  are  liable  for  knowingly  declaring  illegal  divi- 
dends.    The  extent  of  their  liability  is,  however,  limited  to  the  amount  of 
such  dividends  (sec.  670). 
370 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  the  extent  of 
their  unpaid  stock  subscriptions  (sec.  68G). 

M.  B.  C.  Company  i-.  Company,  89  Texas,  511 ;  39  S.  W.  1047  ;  Cole  v.  Adams, 
92  Texas,  171 ;  46  S.  W.  790. 

14.  Stock  Certificates.  —  Stockholders  are  entitled  to  certificates  show- 
ing the  number  of  shares  owned  by  them,  signed  by  such  officers  as  the 
by-laws   may  prescribe. 

15.  Preferred  Stock.  ^-  The  right  to  issue  preferred  stock  is  only  given 
in  express  terms  to  corporations  organized  for  the  purpose  of  storing,  trans- 
porting, buying  and  selling  oil,  gas,  salt,  brine  and  other  mineral  solutions. 

16.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  in  exchange  for 
money,  labor  done  or  property  actually  received  (sec.  652). 

17.  Books.  —  A  stock  register,  transfer  book,  and  record  of  business 
transactions  must  be  kept  (statute  does  not  provide  where  to  be  kept),  and 
the  books  and  records  must  be  open  to  inspection  of  stockholders  at  all 
reasonable  times.  Execution  creditors  may  demand  names  of,  and  amount  of 
stock  liehl  by  stockholders  (sees.  662,  672). 

IS.  OfBce  and  Agent.  —  An  office  nmst  be  kept  in  the  State,  and  an 
agent  tlioruin  upon  whom  process  may  be  served  (sees.  673,  1222,  1223). 

19.  Reports.  —  The  directors  shall,  when  required  by  one-third  of  the 
stockholders,  make  report  showing  amount  of  company's  business,  etc.  No 
annual  report  required  (sec.  663). 

20.  Anti-Trust  Statute.  —  There  was  formerly  a  drastic  anti-trust  statute 
in  force  in  Texas,  but  it  lias  been  declared  unconstitutional  to  the  extent  that 
it  will  not  sujiport  actions  by  the  Stale  to  recover  penalties  for  a  violation  of 
the  law,  nor  afford  a  defense  to  an  action  on  a  right  originating  in  its  violation. 
(See  State  v.  Shippers'  and  Compress  Warehouse  Company,  95  Texas,  603; 
69-S.  W.  58;  see  new  act.  Laws  of  1903,  chap.  94.) 

Crystal  Ice  &  -Mfg.  Co.  v.  State,  23  Texas  Civ.  Ap]).  293  ;  56  S.  W.  562. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charters  may  be 
forfeited  for  violation  of  the  anti-trust  act,  or  for  acts  of  misuser  or  non-user, 
or  for  failing  to  organize  and  commence  business  within  three  years  from  date 
of  incorporation.     (See  Laws  of  1903,  chap.  92.) 

22.  Amendments.  —  Charters  may  be  amended  in  any  respect  desired, 
except  to  so  change  the  original  purpose  as  to  prevent  the  execution  thereof, 
or  to  decn-asc  the  capital  stock  (sees.  647,  649,  051,  652). 

2'i.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  the 
extension  of  corporate  existence. 

21.  Dissolution  —  The  corporation  may  be  dissolved  by  expiration  of  the 
charter,  or  l»y  judgment  of  dissolution  by  a  court  of  coniiietcnt  jurisdiction. 
Also  througli  failure  to  cf^mmence  business  within  three  years  from  date  of 
charter  (sees.  6S<»,  6.sl). 

2.").  Annual  License  Tax.  —  T«*n  dollars;  if  the  ca]>italization  is  over 
.«;.50,()00  and  less  than  iSloo.OOO,  $2(»;  !?100,000  and  less  than  !ji2UO,00O,  $30; 
$2()0,0()0  or  more,  -SoU  (s.-c  5213  i). 

L'6.  Foreign  Corporations.  —  Foreign  corporations  must  file  with  the 
Secretary  of  State  a  cf-rti tied  copy  of  articles  of  incorporation,  a  permit  being 
thereupon  i.ssued  by  said  officer  upon  i>ayment  of  the  following  fees:  If 
capital  .stock  is  JjlOO.OItO  or  less,  !?25;  up  to  e'iVH^OOO,  S50 ;  over  tliat  and 
le.ss  than  .«ll,000,O0O,  .'?100;  if  over  S1,IK>0,(»(H»,  !?2(>0;  the  j.ermit  being  limited 
to  ten  years.     An  aiiniuil  franchise  tax  of  $25  for  a  capitalization  of  not  over 

;j7i 


INCORPORATION   AND    ORGANIZATION    OP   CORPORATIONS. 

8:25,000;  of  8100  for  over  that  and  not  over  $100,000,  and  in  addition 
thereto  <?1  on  each  ten  thousand  dollars  of  stock  above  $100,000,  and  not 
over  81,0(.H).l)0(*,  and  a  furtlier  additional  tax  of  $1  on  each  linndred  tlionsand 
dollars  over  $1,000,000.  It  should  have  a  resident  agent,  ulHcer,  or  manager 
at  its  Texas  office,  upon  whom  process  against  the  corporation  may  be  served 
(art.  745,  R.  S.,  amended  chap.  119,  Laws  of  1897;  Arts.  746,  748,  1222- 
1223,  2439,  11,  S.,  Laws  of   1903,  chap.  92). 

Lake  View  Land  Co.  v.  Company,  95  Texas,  252 ;  G6  S.  W.  766 ;  Security  Co.  v. 
Bauk,  as  Tex.  575 ;  57  S.  W.  22. 


UTAH. 

(The  references  below  are  to  the  Revised  Statutes  of  Utah,  1898,  unless  otherwise  stated.) 

1.  Statutes  under  -which  Business  Corporations  may  incorporate.  — 

The  Business  Corporation  Act  of  Utah  is  to  be  found  in  the  Revised  Statutes 
of  1898  of  that  State,  sees.  314-373,  as  amended  by  the  Laws  of  1899  and 
1901.  Under  this  act  corporations  may  be  formed  for  any  purpose  for  which 
individuals  may  lawfully  associate  themselves.  Special  provisions  are  made 
for  insurance,  irrigation,  trust,  and  railway  companies. 

2.  Incorporators.  —  Five  or  more  persons,  one  of  whom  must  be  a  resi- 
dent of  the  State  (sec.  314). 

3.  Contents  of  the  Articles  of  Agreement.    The  contents  must  set  forth  : 

a.  Name.  —  No  corporation  can  use  the  name  of  a  corporation  ah-eady 
organized,  or  of  any  corporation  duly  authorized  to  transact  business  within 
the  State  (sec.  315,  sub.  1 ;  Laws  of  1899,  chap.  52;  I^aws  of  1001,  chap.  81). 

b.  Domicile.  —  Precinct  or  city  where  it  is  organized  (Laws  of  1901,  chap. 
81,  sub.  2j. 

c.  Incorporators.  —  Names  and  places  of  residence  (Id.). 

d.  Duration.  —  Time  thereof,  which  shall  not  be  less  than  three  nor  more 
than  one  hundred  years  (Id.). 

e.  Purposes.  —  Pursuit  or  business  agreed  upon,  specifying  it  in  general 
terms.  State  officials  permit  the  insertion  of  any  number  of  objects  in  the 
articles  (Id.). 

f.  Places  of  General  Business. —  (Id.). 

g.  Slock  Subscriptions.  —  Amount  of  stock  subscriptions.  Amount  of  stock 
which  each  incorporator  has  subscribed  for  (Id.). 

h.  Capital  Stock.  —  Limit  of  capital  stock  agreed  upon  and  the  par  value  of 
shares.     Both  may  be  any  amount  desired  (Id.). 

i.  Officers  and  Directors.  —  Number  and  kind  of  officers,  their  qualifications, 
terms  of  office,  and  time  and  maimer  of  their  election,  removal,  and  resigna- 
tion, with  the  names  of  the  officers  to  serve  until  first  general  elcctioir,  the 
number  of  directors  to  be  not  less  than  three  nor  more  than  twenty-five  (Id.). 

j.  Quorum  of  Directors.  —  How  many  of  the  entire  board  shall  be  necessary 
to  form  a  quorum,  to  be  authorized  to  transact  business,  etc.,  provided  that  a 
quorum  shall  not  be  less  than  one-fourth  of  the  entire  board  (Id.). 

k.  Stockholders'  Liability.  —  Whether  or  not  private  property  of  stock- 
holders shall  be  liable  for  its  obligati(jns  (Id.). 

/.  Provmons  for  the  Re  fjulut  ion  of  Internal  Affairs.  —  Such  general  clauses 
as  incorporators  deem  necessary  for  conducting  the  business  of  the  corporation 
for  its  future  welfare  (Id.). 


SYNOPSIS-DIGEST    OF    INCORPORATION   ACTS. 

The  act  provides  that  the  articles  of  incorporation  shall  also  contain  pro- 
visions relative  to  the  payment  of  stock  subscriptions  in  property,  if  it  is 
desired  to  pay  them  in  this  manner.  (See  sec.  5,  Procuring  Charter.)  The 
act  also  provides  that  the  articles  of  incorporation  may  provide  what  propor- 
tion of  the  outstanding  capital  stock  shall  be  represented  at  a  stockholders' 
meeting,  and  what  proportion  of  the  stock  so  represented  shall  be  necessary 
to  determine  any  question  of  election  (Laws  of  1901,  chap.  81,  amended; 
Revised  Statutes  of  ISDS,  sec.  316). 

4.  Statutory  Powers.  —  Tn  addition  to  statutory  enumeration  of  common 
law  powers  corporatidiis  have  the  following  additional  powers:  To  authorize 
voting  by  proxy,  to  forfeit  stock  for  non-payment  of  assessments,  to  consoli- 
date witli  other  corporations  engaged  in  the  same  line  of  business  in  the  same 
vicinity,  to  enforce  a  lien  upon  the  stock  of  its  members  for  debts  due  the 
corporation,  to  remove  directors  and  to  authorize  diiectors  to  adopt  by-laws 
(R.  S.,  sec.  322  ;  R.  S.,  sees.  335,  35G,  373;  A.  L.,  .sees.  340,  341 ;  R.  S.,  sec. 
333;  R.  L.,  sec.  327). 

5.  Procuring  the  Charter.  —  The  agreement  must  be  subscribed  by  all 
the  incorporators,  and  sworn  to  and  acknowledged  by  at  least  three.  In 
addition  to  the  foregoing  there  must  be  added  the  oath  of  at  least  three  of 
the  incorporators  to  the  fact  that  they  have  commenced,  or  it  is  their  bona 
Jide  intention  to  commence  and  carry  on  business  mentioned  in  the  agree- 
ment, and  that  they  verily  believe  that  each  party  to  the  agreement  has  paid 
or  is  fully  able  to  pay  the  amount  of  stock  subscriptions  made  by  him.  This 
agreement  cannot  be  made  until  at  least  ten  per  cent  of  the  stock  subscribed 
by  each  stockholder  and  not  less  than  ten  per  cent  of  the  authorized  capital 
stock  has  been  paid  in.  Where  subscriptions  to  the  capital  stock  consist  in 
w  hole  or  in  part  of  property  necessary  to  the  pursuit  agreed  upon  there  must 
appear  in  the  articles  of  incorporation  a  description  of  the  property  so  taken, 
■with  a  statement  of  the  fair  cash  value  thereof,  which  statement,  except  in  tlie 
case  of  mining  and  irrigation  corporations,  shall  be  accompanied  by  the  affidavit 
of  three  persons,  to  the  effect  that  they  are  acquainted  with  such  property  and 
that  it  is  reasonably  worth  the  amount  in  cash  for  which  it  was  accepted  by 
the  corporation.  As  soon  as  the  foregoing  provisions  are  complied  with,  and 
the  officers  named  in  the  agreement  have  taken  and  subscribed  the  oaths  of 
office,  the  agreement  with  the  oaths  of  office  and  the  affidavits  attached 
thereto,  must  be  filed  and  recorded  in  the  office  of  the  county  clerk  of  the 
county  in  which  the  principal  business  is  carried  on  within  ten  days  from  the 
date  of  execution  thereof.  The  county  clerk  issues  a  certificate  to  the  effect 
that  the  agreement  and  oaths  of  office  have  been  filed  in  his  office,  which  cer- 
tificate together  witli  a  coi>y  of  the  articles  of  agreement  and  oaths  must  be 
filed  in  the  office  of  the  Secretary  of  State,  who  thereupon  issues  a  certificate 
that  the  above  mentioned  instruments  have  been  filed  in  his  office  (R.  L.^ 
sees.  310,  320,  as  amended  by  Laws  of  1901,  chap.  81). 

P.  T.  C.  Co.  V.  Cumpaiiy,  2-3  Utah.  474  ;   65  Par.  73.5. 

G.  Corporate  Indebtedness.  —  There  is  no  statutory  limit  to  the  amount 
of  corporati;  indebtedness. 

7.  Organization  Tax.  —  Twenty-five  cents  on  each  thousand  dollars  of  the 
cajiital  stoclc  (Laws  of  l^!i7.  rhaj).  1  ;  Laws  of  1901,  ciiap.  00). 

S.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  State  for  i.ssuing 
certificate  of  incoiporation.  •?.";  ;  for  certifii'd  co)>y  of  artieji-s,  ^b\  to  county 
clerk  for  filing  and  indexing  articles  of  incorporation,  .$2.50;  for  recording 

37;j 


INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

same,  20  cents   per  folio;  filing  oath  of  officers,   50  cents   each    (Laws   of 
iJtOl,  chap.  nO). 

1).  Commencing  Business.  —  Business  may  be  commenced  as  soon  as  the 
articles  are  liled  as  required  by  law  and  ten  per  cent  of  the  capital  stock  sub- 
scribed and  ten  per  cent  of  the  authorized  capital  stock  has  been  paid  in,  and 
the  officers  have  duly  taken  their  oaths  of  office.  Business  must  be  com- 
menced within  the  period  of  two  years  after  the  time  of  filing  articles  to 
avoid  forfeiture  of  charter  (Laws  of  1891,  chap.  81,  amending  11.  S.,  sees.  31(5, 
321). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
Avithin  the  State.  Tlii?;  in  the  absence  of  any  statute  expressly  authorizing 
the  holding  of  organization  meetings  without  the  State. 

11.  Meetings  of  Stockholders  and  Directors.  —  Meetings  of  stock- 
holders and  directors  may  be  held  at  the  time  and  place  designated  by  the  by- 
laws. (In  the  absence  of  any  statute  expressly  authorizing  the  holding  of 
stockholders'  meetings  without  the  State  it  is  safe  to  say  that  without  the 
consent  of  all  .stockholders  such  meetings  must  be  held  within  the  State 
(R.  L.,  sees.  3:>L  3:36). 

12.  Directors'  Qualifications  and  Liabilities.  a.  Qualifications.  — 
There  must  be  at  least  three  and  not  more  than  twenty-five  directors,  one-third 
of  whom  must  be  residents  of  the  State.  One-fourth  of  the  entire  number 
may  constitute  a  quorum  if  the  articles  so  provide.  Directors  must  be  stock- 
holders. Special  provision  is  made  for  their  removal  by  the  stockholders 
(R.  S.,  sees.  324,  327 ;  Laws  of  1901,  chap.  81). 

b.  Liabilities.  — There  is  no  civil  statutory  liability  of  directors.  Criminal 
penalties  are,  however,  provided  for  misconduct  of  directors  (R.  S.,  sees.  4411, 
4422). 

13.  Stockholders'  Liabilities.  —  Unless  the  articles  of  agreement  other- 
wise provide,  stockholders  are  only  liable  to  the  creditors  to  the  extent  of  their 
unpaid  stock  subscrijitions  (R.  S.,  sec.  331 ;  see  also  Cons.,  Art.  XII.  sec.  18  ; 
see  also  R.  S.,  sees.  338,  354). 

Richardson  v.  Company,  2.3  Utah,  366 ;  65  Pac.  74  ;  Salt  Lake  Hardware  Co.  v. 
Company,  13  Utah,  423;  45  Pac.  200;  Henderson  v.  Turngren,  9  Utah,  432;  35 
Pac.  495. 

14.  Stock  Certificates. — Each  shareholder  is  entitled  to  a  certificate 
showing  the  number  of  shares  owned  by  him,  signed  by  such  officers  as  the 
by-laws  may  prescribe. 

15.  Preferred  Stock.  — The  issue  of  preferred  stock  is  expressly  author- 
ized by  statute  (Laws  of  1903,  chap.  59). 

16.  Payment  of  Capital  Stock. — Capital  stock  may  be  paid  for  in 
property,  by  providing  tlierefor  in  the  articles  of  agreement  and  describing 
such  property  therein  (Laws  of  1901,  chap.  81,  amending  R.  S.,sec.  316.  See 
also  Cons.,  Art.  XII.  sec.  5). 

17.  Books.  —  Correct  books  of  the  proceedings  and  business  of  the  corpo- 
ration must  be  kept  open  for  inspection  by  stockholders.  The  place  where 
such  books  are  to  be  kept  is  not  regulated  by  statute  (R.  S.,  sees.  328,  329, 
4415). 

18.  OfiBce  and  Agent.  —  The  Con.stitution  provides  that  no  corporation 
shall  do  business  witliin  the  State  witliout  having  one  or  more  places  of  busi- 
ness within  the  State  upon  whom  process  may  be  served  (Art.  XII.  sec.  9 ; 
see  also  R.  S.,  sec.  4415). 

374 


SYNOPSIS-DIGEST   OF   INCORPORATION    ACTS. 

19.  Reports.  —  The  statutes  do  not  require  reports  to  be  made  except  for 
insurance,  banking,  loan,  trust,  and  guaranty  companies. 

20.  Anti-Trust  Statute.  —  There  is  a  moderate  anti-trust  statute  in  force 
in  Utah  (R.  :>.,  sees.  17.32,  1762). 

2 1 .  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  may  be  for- 
feited for  non-user  for  a  period  of  two  years  consecutively,  or  for  entering 
illegal  pools  or  trusts  (K.  S.,  sees.  321,  1758). 

Jackson  v.  Company,  21  Utah,  1 ;  59  Pac.  238. 

22.  Amendments.  —  Articles  of  incorporation  may  be  amended  in  any 
respect  desired,  by  conforming  to  the  provisions  of  law  in  such  case  made  and 
provided  (K.  S.,  sec.  33S). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  the 
extension  of  corporate  existence. 

24.  Dissolution.  —  Voluntary  dissolution  maybe  had  by  application  to 
the  district  court  upon  two-thirds  vote  of  the  stockholders  at  a  special  meet- 
ing of  the  stockholders  (R.  S.,  sees.  3114,  3661  el  seq). 

2.5.    Annual  License  Fee.  —  There  is  no  annual  license  fee. 

20.  Foreign  Corporations.  —  Foreign  corporations  must  file  with  Secre- 
tary of  State  and  county  clerk  of  the  county  where  the  office  is  to  be  located, 
a  copy  of  the  articles  of  agreement,  by-laws,  and  the  appointment  of  some 
person  residing  in  county  where  principal  place  of  business  is  situated  to 
receive  service  of  j^rocess,  and  shall  pay  the  same  fees  to  the  Secretary  of  State 
as  domestic  corporations.  No  annual  licen.se  tax  or  annual  report  is  necessary 
(R.  S.,  sees.  351,  352).  Under  Const.,  Art.  XII.  sec.  6,  no  corporations  organ- 
ized outside  of  the  State  are  permitted  to  transact  business  within  the  State 
on  conditions  more  favorable  than  those  prescribed  by  law  to  similar  corpo- 
rations organized  under  the  laws  of  Utah. 

R.  G.  W.  Ry.  Co.  v.  Company,  2-3  Utah,  22 ;  63  Pac.  995. 


VERMONT. 

(References  below  are  to  the  Statutes  of  Vermont,  1894,  and  acts  amendatory  thereof.) 

1 .  Statutes  under  ■which  Business  Corporations  may  incorporate.  — 
The  liu.sine.ss  Corporation  Act  of  Vermont  i.s  found  in  the  statutes  of  Ver- 
mont (1894),  sees.  3673-3742  inclusive.  Under  it  corporations  may  be  formed 
for  any  lawful  purpose  excepting  telephone,  telegraph,  banking,  insurance, 
railway,  construction  and  operation  companies,  savings  banks,  trust  com- 
panies, and  corporations  intended  to  derive  profit  from  the  loan  uf  numcy  or 
real  estate. 

2.  Incorporators.  —  Five  or  more  jn-rsons.  There  are  no  residential 
requirements  (sec.  37<»1). 

3.  Contents  of  the  Articles  of  Incorporation.  The  articles  of  incorpo- 
ration must  contain : 

a.  Name.  —  .Similarity  of  nanirs  with  that  of  existing  corporations 
forbidden  (sec.  3705). 

b.  Purposes. — (^l)ject  or  objects  for  which  established.  Any  nuinb<r  of 
purposes  may  be  inserted  in  the  articles  (.sec.  3705). 

c.  Domicile. —  Place  in  which  corporate  business  is  to  be  carried  on 
(sec.  3705). 

375 


INCOKPORATION    AND   OUGANIZATTOX   OF   CORPORATIONS, 

d.  Cirpitn!  Stock:  —  Amount  tliereof.  Capital  stock  is  liiniteil  to  a  min- 
imum of  ?"H)0  and  a  maximum  of  $1,(100,000.  The  par  value  of  sliares  must 
not  exceed  SUR)  (sees.  3705,  3728).  Duration  of  corporate  existence  is 
uulimitetl. 

4.  Statutory  Powers. —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  granted  :  Tiie  right  to 
vote  by  proxy  at  stockholders'  meetings,  to  forfeit  stock  for  failure  to  pay 
assessments,  and  to  have  a  lien  upon  the  stock  of  its  members  for  debts  due 
to  the  corporation  (sees.  3691,  3718,  3727). 

5.  Procuring  the  Charter.  —  Articles  must  be  subscribed  by  all  the  in- 
corporators and  then  submitted  to  the  Secretary  of  State  for  his  approval. 
The  latter  may,  if  he  sees  fit,  refer  the  same  to  a  Judge  of  the  Supreme  Court 
who  is  given  power  to  determine  whether  the  proposed  corporation  may  or 
may  not  be  organized  under  the  General  Act.  If  the  articles  are  approved 
theV  are  recordeil  in  the  office  of  the  Secretary  of  State,  and  a  certified  copy 
thereof  must  be  recorded  in  the  ottice  of  the  clerk  of  the  town  in  which  the 
principal  place  of  business  of  the  corporation  is  located.  The  organization 
tax  must  be  paid  to  the  Secretary  of  State  before  corporate  existence  begins 
(sees.  3705,  3700,  3707). 

6.  Corporate  Indebtedness.  — One-fourth  of  the  capital  stock  must  be 
paid  in  before  the  corporation  can  contract  debts.  No  debts  can  be  con- 
tracted in  any  event  exceeding  in  amount  two-thirds  of  the  capital  stock 
actually  paid  in  (sec.  3724). 

7.  Organization  Tax.  —  Capital  stock  up  to  |5,000,  $10;  not  exceeding 
$10,000,  §25;  not  exceeding  !$50,000,  $-50;  not  exceeding  $200,000,  !$100 ; 
not  exceeding  $.500,000,  |200 ;  not  exceeding  $1,000,000,  ^300;  exceeding 
$1,000,000,  $500  (Laws  of  1898,  chap.  19,  sec.  2;  see  also  Laws  of  1900, 
chap.  15). 

8.  Filing  and  Recording  Fees.  —  Filing  fees  in  the  office  of  the  Secre- 
tary  of  State,  $2.  Recording  fees  in  local  town  or  city  office,  $1 ;  for  filing 
certificate  of  the  payment  of  capital  stock,  $1. 

9.  Commencing  Business.  —  Before  commencing  business  also,  the  presi- 
dent or  clerk  must  make  a  certificate  under  oath  stating  the  amount  of  capital 
actually  paid  in.  This  must  be  at  least  one-fourth  of  the  capital  stock,  if 
debts  are  to  be  contracted.  This  certificate  is  filed  in  the  office  of  the  Secre- 
tary of  State,  and  a  certified  copy  thereof  with  the  clerk  of  the  town  in  which 
the  prinripal  place  of  business  is  to  be  located  (sees.  3722,  3724). 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  the  State.  The  law  provides  how  tlie  same  shall  be  called  (sees. 
3708-3710). 

11.  Meetings  of  Stockholders  and  Directors.  —  There  is  no  statute 
authorizing  the  holding  of  stockholders'  meetings  without  the  State,  and 
by  implication  at  least  they  must  be  held  there.  Directors'  meetings  may 
be  held  within  or  without  the  State  as  the  by-laws  may  provide. 

12.  Directors'  Qualifications  and  Liabilities.  a.  Qualifications.  — 
There  must  be  at  least  three  directors  who  must  be  stockholders,  and  two 
of  them  must  be  residents  of  the  State  (sees.  3677,  3717). 

h.  Liabilities. —  Directors  are  liable  if  the  corporation  contracts  debts 
before  a  copy  of  its  articles  of  association  and  a  certificate  as  to  the  amount 
of  capital  stock  paid  in  are  filed  in  the  office  of  the  clerk  of  the  town  in 
which  the  principal  office  of  the  corporation  is  to  be  located.  They  are 
also  liable  for  illegal  payment  of  dividends,  or  for  permitting  the  creation 
370 


SYNOPSIS-DIGEST    OP   IXCORPORATIOX   ACTS. 

of  indebtedness  in  excess   of  two-ihirds  of  the  capital  stock  paid  in  Caecs. 
3722-3724).  ^  '^ 

Farr  v.  Brings  Estate,  72  Vc.  225 ;  47  Atl.  793. 

13.  Stockholders'  LiabiUties.  _  Stockholders  are  liable  to  the  extent  of 
their  unpaid  stock  subscriptions.  If  the  capital  stock  is  withdrawn  or 
refunded  to  the  stockholders,  before  the  full  payment  of  its  debts,  each 
stockholder  is  peiisonally  liable  to  tlie  amount  thereof  refunded  to  him 
(sees.  3(25,  3726). 

Barton  Nat.  Bank  v.  Atkins,  72  Vt.  33;  47  Atl.  176;  Corey  v.  Morrill,  61 
\t.  598;  17   Atl.  840. 

U.  Stock  Certificates.  —  Stockholders  are  entitled  to  a  certificate  signed 
by  sucli  officers  a.s  the  by-laws  prescribe. 

1.5.  Preferred  Stock.  —  There  is  no  provision  expressly  authorizing  the 
issuance  of  jn-eferred  stock. 

10.  Payment  of  Capital  Stock.  —  Stock  can  be  issued  only  in  exchange 
for  money  or  money's  worth. 

17.  Books.— Stock  book  mu.st  be  kept  within  the  State,  containing  the 
names  of  the  holders  of  stock,  their  places  of  residence  and  number  of  shares 
held  by  eacli,  amount  actually  paid  in  on  each  share  and  time  when  they 
acquired  the  same  (sees.  3683,  3714,  3733).  All  records,  amounts,  and 
papers  of  the  corporation  are  open  to  the  inspection  of  stockholders. 

18.  Office  and  Agent.  —  :\Iust  have  an  office  within  the  State  in  charge 
of  a  clerk  in  the  town  where  its  principal  place  of  business  is  located 
(.sees.  3712,  3713). 

10.  Reports.  —  There  is  no  statutory  provision  as  to  reports.  There 
is  a  statute,  however,  requiring  all  moneyed  corporations  annually,  on  or 
before  April  15th,  to  transmit  to  the  clerk  of  each  town  in  which  stockholders 
cf  tlie  corporation  reside,  a  ]i.st  of  the  stockholders  with  the  amount  of  sliares 
held  by  them  and  the  amount  paid  thereon.  They  must  also  transmit  to  the 
clerk  of  the  town  where  the  corporation  has  its  principal  business  a  list  of 
all  stockholders  with  the  number  of  shares  owned  by  them  and  the  amount 
paid  thereon  (sees.  380,  381,  382). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  in 
Vermont. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Charter  may  be 
forf(;ited  for  failure  to  [>ay  license  ta.xes  (.sees.  575,  578;  Laws  of  1902  chap. 
20,  sec.  5*1). 

22.  Amendments.  —  Articles  may  be  amended  for  the  purpose  of  increas- 
ing or  decreasing  the  capital  stock,  for  the  purpose  of  changing  its  name, 
or  for  change  of  domicile  (sees.  3720,  3730,  3731,  3734;  .see  also  Laws  of 
1808,  chap.  6s). 

23.  Extension  of  Corporate  Existence.  —  Companies  may  be  incor- 
porated for  an  unlimited  teini.  There  i.s  no  iirovision  for  extension  of 
corporate  existence. 

21.  Dissolution.  —  On  vote  of  the  stockholders  owning  one-fourth  of  the 
capita]  stock  a  corporation  may  petition  court  of  cliancery  for  dissolution 
(.sees.    3735,    3730;  see  also  Laws  of  10(i2,  chap.  20,  sec.  .57). 

25.  Annual  License  Fee.  —  Capital  stf)ck  to  ?50,000,  ;?10 ;  and  for  each 
850,000,  or  part  tlxToof  in  i-xccsa  of  S50.0()0.  85,  but  no  tax  sliall  exceed  )?50. 
Tax  is  payable  in  February,  special  ex<rnption  for  manufacturing  establish- 
ments (sees.  365,  575,  578 ;  Laws  of  1902.  chap,  20,  sees.  47-55). 

377 


IXCORrORATION  AND    OIlfiANIZATION    OF    CORPORATIONS. 

26.  Foreign  Corporations.  —  Foreign  corporations  must  file  with  the  Sec- 
rotary  of  State  a  copy  oi  diarter  and  statement  setting  forth  the  business  of 
the  corporation,  location  of  ollice  witiiiu  the  State,  and  an  agent  upon  wliom 
process  may  be  made;  and  pay  an  annual  license  tax  of  $10,  if  capitalization 
is  ;?5(),00(i  or  less,  and  if  over  )i?50,0()0  or  part  thereof  in  excess  of  If50,0()(),  $.">, 
but  in  no  case  to  exceed  §50  (R.  S.,  sees.  575,  41G5).  The  Secretary  of  State 
will  issue  certificate  showing  compliance  with  the  law  and  authorizing  the 
corporation  to  do  business  within  the  State  (Laws  of  1902,  chap.  20,  sees.  47, 
59-64). 

Osborue  v.  lus.  Co.,  57  Vt.  27a 


VIRGINIA. 

(The  references  cited  are  to  the  Business  Corporation  Act  of  1903,  found  in  Acts  of  Extra 
Session  (1002-1904),  cliap.  270.  Tills  is  in  turn  subdivided  into  five  subsidiary  chapters,  to 
•which  reference  is  made  below.) 

1.  Statutes  under  •which  Business  Corporations  may  incorporate.  — 
The  Business  Corporation  Act  of  Virginia  is  to  be  found  in  the  Laws 
of  1002-1904,  pp.  437-484.  Under  it  charters  may  be  procured  for  any 
lawful   business. 

2.  Incorporators.  —  Three  or  more.  There  are  no  residential  require- 
ments (chap.  1,  sec.  1). 

3.  Contents  of  the  Articles  of  Incorporation.  The  contents  must  set 
forth  : 

a.  Name. —  Name  must  contain  the  word  "corporation"  or  "incor- 
porated," and  must  be  such  as  to  distinguish  it  from  any  other  corporation 
engaged  in  a  similar  line  of  business  (chap.  1,  sec.  2). 

b.  Domicile.  —  Name  of  the  county,  city,  or  town  where  the  principal 
office  within  the  State  is  to  be  located  (Id.). 

c.  Purposes.  —  Purposes  for  which  it  is  formed.  There  may  be  any 
number  not  covered  by  special  act  (Id.). 

(/.  Capital  Stock.  —  Maximum  and  minimum  amount  of  capital  stock  and 
number  of  sliares.  If  preferred  stock  is  desired,  there  must  be  inserted  a 
description  of  the  several  classes  of  stock  with  the  terms  on  which  they 
are  created  (Id.). 

e.    Duration.  —  May  be  perpetual  if  desired  (Id.). 

/.  Officers  and  Directors.  —  Names  and  residences  of  officers  and  directors 
for  the  first  year  (Id.). 

g.    Real  Estate.  —  Limitation  upon  amount  of  holdings  thereof  (Id.). 

h.  Refjulation  of  Internal  Affairs.  —  Any  provisions  may  be  inserted  for 
the  conduct  of  the  affairs  of  the  corporation;  also  any  provisions  defining, 
limiting,  or  regulating  the  powers  of  the  corporation  to  the  directors  or 
stockholders  (Id.). 

4.  Statutory  Po^wers.  —  In  addition  to  a  statutory  enumeration  of  com- 
mon law  powers,  the  following  additional  powers  are  granted ;  To  take 
real  and  personal  estate  by  gift,  devise,  or  bequest;  to  subscribe,  guaranty,  or 
become  surety  in  respect  to  stock  and  bonds  of  other  corporations;  to 
conduct  business  in  other  States  and  Territories  and  foreign  countries ;  to 
hold  meetings  of  directors  within  or  without  the  State;  to  have  offices, 
to  hold,  purchase,  mortgage,  or  convey  real  and  personal  property  both  within 
and  without  the  State;   to  authorize  voting  by  proxy  in  the  election  of  direc- 

378 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

tors;  to  classify  directors;  to  permit  the  insertion  in  the  articles  of  a  provision 
delegating  the  power  to  adopt  by-laws  to  the  directors;  to  remove  directors; 
to  forfeit  stock  for  non-payment  of  assessments  ;  to  issue  preferred  stock  ; 
to  permit  cumulative  voting  by  inserting  provision  therefor  in  the  articles; 
power  to  insert  in  the  articles  provision  conferring  upon  the  bondholders 
right  to  vote  in  respect  to  corporate  affairs,  management,  and  consolidation 
with  other  corporations  (chap.  5,  sees.  2,  3,  4,  5,  6,  7,  8,  10,  12,  l;3,  16,  19, 
40,  41,  42).  The  statute  authorizes  the  directors  to  appoint  an  executive 
committee  of  two  or  more  directors  from  their  own  number  (chap.  1,  sec. 
13). 

5.  Procuring  the  Charter.  —  The  certificate  of  incorporation  must  be 
suliscribed  by  each  of  the  incorporators,  and  is  then  presented  to  the  judge 
of  the  circuit  court  of  the  county  or  to  a  judge  of  the  corporation,  circuit 
or  chancery  court  of  the  city  wherein  the  corporation  is  to  be  located,  for 
his  certificate  to  the  effect  that  it  is  executed  according  to  law.  When  so 
endorsed  and  when  organization  tax  is  paid,  the  certificate  must  be  presented 
to  the  State  corporation  commission,  whicii  is  authorized  to  pass  upon  the 
question  whether  the  applicants  have  by  complying  with  the  requirements  of 
the  law  entitled  themselves  to  the  charter.  If  satisfied  in  this  regard,  the 
fact  is  certified  by  them  to  the  Secretary  of  the  Commonwealth,  and  the 
charter  is  recorded  by  him  in  the  charter  records.  This  done,  the  Secretary 
of  the  Commonwealth  certifies  the  certificate  to  the  clerk  of  the  circuit  court 
of  the  county  or  to  the  corporation  court  of  the  city  wherein  the  principal 
office  of  the  corporation  is  to  be  located,  or  to  the  clerk  of  the  chancery 
court  of  the  city  of  Richmond  in  case  the  principal  office  is  to  be  located 
there.  The.se  officials  are  required  to  record  the  certificate  in  their  offices 
and  to  endorse  the  fact  of  such  recordation  upon  the  certificate.  Whereupon 
the  said  certificate  with  all  endorsements  thereon  is  returned  by  such  last- 
named  official  to  the  clerk  of  the  State  corporation  commission,  and  lodged 
with  him.  Corporate  existence  commences  as  soon  as  tiie  certificate  has  been 
lodged  for  record  in  the  otfice  of  the  Secretary  of  the  Commonwealth  (chap.  1, 
sec.  3). 

6.  Corporate  Indebtedness. — There  is  no  statutory  limitation  upon  the 
amount  of  corporate  indebtedne.ss.  (The  statute  expressly  gives  the  right  to 
a  corporation  to  create  a  bonded  indebtedness.  If  provision  is  so  made  in  the 
articles  of  incorporation  or  by  amendment  thereto,  voting  powers  in  the  cor- 
poration may  be  granted  to  bondholders  (chap.  5,  sees.  4  and  20). 

7.  Organization  Tax.  —  On  capitalization  of  !?.30.000,  or  less,  810;  over 
!850,000,  and  less  tlian  $1,000,000,  20  cents  for  each  thousand  dollars  or 
fraction  thereof;  81,000.000  or  more,  ."?G00.  (The  foregoing  schedule  does 
not  apply  to  transportation  or  transmission  companies.) 

8.  Filing  and  Recording  Fees.  —  The  organization  tax  is  payable  to  the 
Secretary  of  the  Commonwealth.  The  following  additional  fees  are  chargi-d; 
81,  for  application  of  the  .seal  of  the  charter  commission  to  the  certilicate, 
and  oi)  cents  per  page  ])lus  $2,  for  recording  the  charter  in  the  office  of 
the  Secretary  of  the  Commonwealth.  The  registration  fee  as  well  as  the 
franchise  tax  is  payable  annually  on  or  before  March  1st  of  each  year.  The 
annual  franchise  tax  is  payable  to  the  order  of  the  Treasurer  of  Virginia, 
and  forwarded  to  the  auditor  of  public  accounts  at  Uichmnnd.  There  is 
no  charge  for  the  approval  of  the  local  judge,  or  for  obtaining  his  certificate 
to  the  effect  that  the  crtificate  of  incorporation  is  executed  according  to  law. 
The  State  charter  commission  charges  i?!  for  certificate  under  seal  that  the 

371) 


IXCORPOR.VTIOX    AND    ORGANIZATION    OF   CORPORATIONS. 

applicants  for  a  charter  have  complied  with  the  requirements  of  law  and  are 
eutitU'd  to  a  charter.  The  Secretary  of  the  Cominoiiwealtli  makes  no  addi- 
tional cliarge  other  than  the  changes  referred  to  above  for  giving  his 
certificate  to  the  clerk  of  the  circuit  court,  as  to  the  filing  in  his  office 
of  the  certificate  of  incorporation.  The  charges  for  filing  and  recording  in 
the  local  ollice  (e.  q.  clerk  of  the  State  court),  are  the  same  as  for  the  Secre- 
tary of  the  Commonwealth  given  above.  The  State  charter  commission 
makes  no  charge  for  finally  lodging  the  certificate  of  incorporation  in  their 
office.  The  Secretary  of  the  Commonwealth  charges  $1.50  for  issuing  certifi- 
cate of  incorporation.  The  cost  of  certified  copy  of  the  certificate  of  in- 
corporation  is  50  cents  per  page,  50  cents  for  certificate,  plus  $1  for 
application  of  seal  when  required  under  seal.  There  are  no  charges  made  for 
filing  and  recording  report  as  to  officers,  directors,  etc.  Under  sec.  39,  chap. 
5,  of  the  act  concerning  corporations,  a  report  is  required  to  be  filed  with  the 
charter  commission.  Under  sec.  14,  chap.  1,  of  the  same  act  a  report  is 
required  to  be  filed  with  the  clerk  of  the  court.  There  is  no  charge  as  to  the 
report  under  sec.  39,  chap.  5,  of  the  Corporation  Act,  but  a  charge  of  25 
cents  to  the  clerk  of  the  court  for  the  report  under  sec.  14,  chap.  1, 
is  made.  There  is  an  additional  charge  of  50  cents  per  imge  where  the 
certificate  of  incorporation  exceeds  two  pages  in  length. 

9.  Commencing  Business.  —  Business  may  be  commenced  as  soon  as 
the  certificate  has  been  recorded  and  approved  as  required  by  law,  and 
as  soon  as  the  minimum  capital  stock  as  fixed  by  the  certificate  of  in- 
corporation has  been  subscribed.  The  corporation  must  commence  business 
•within  two  years  from  the  time  the  charter  is  issued  (chap.  1,  sec.  3;  chap. 
5,  sec.  1).  Within  thirty  days  after  the  first  election  of  oiHcers  and  directors 
a  report  authenticated  by  the  signature  of  the  president  or  one  of  the 
vice-presidents  and  the  secretary  of  the  corporation  must  be  filed  in  the 
office  of  the  State  corporation  commission,  stating  character  of  its  business, 
corporate  name,  location,  name  of  agent  upon  whom  process  may  be  served, 
amount  of  its  autliorized  capital  stock,  amount  actually  issued  and  outstand- 
ing, names  and  addresses  and  terms  of  office  of  officers  and  directors  and 
date  of  annual  meeting  (chap.  5,  sec.  39  ;  chap.  1,  sec.  14). 

10.  Organization  Meeting. —  The  organization  meeting  should  properly 
be  held  within  the  State.  The  cori^oration  must  organize  and  commence 
business  within  two  years  after  granting  of  the  charter  (chap.  1,  sec.  4; 
chap.  5,  sec.  51). 

11.  Meetings  of  Stockholders  and  Directors.  —  The  annual  meeting 
of  the  stockholders  must  be  held  within  the  State.  It  would  seem  that 
special  meetings  should  likewise  be  held  within  the  State.  Directors'  meet- 
ings may  be  held  within  or  without  the  State  as  the  by-laws  provide  (chap.  5, 
sec.  7). 

12.  Directors'  Qualifications  and  Liabilities.  a.  Qualifications.  — 
There  must  be  at  least  three  directors,  including  the  president,  who  must 
be  a  director.  The  act  provides  for  the  appointment  by  the  directors  of  an 
executive  committee  to  manage  the  business  of  the  corporation  (chap.  1,  sec. 
13 ;  chap.  5,  sec.  10). 

b.  Liahiliiiex.  —  Directors  are  jointly  and  severally  liable  for  any  damage 
resulting  from  their  wilfully  and  fraudulently  causing  to  be  published  or  given 
out  a  report  of  the  condition  or  business  of  the  corporation  known  to  them  to 
be  false  in  any  material  respect.  To  enforce  this  liability  action  must  be 
brought  within  two  years  after  the  right  of  action  accrues  (chap.  5,  sees.  26, 
380 


SYNOPSIS-DIGEST   OF    INCORPORATION   ACTS. 

35).     They  are  also  liable  for  illegal  declaration  of  dividends  if  they  do  not 
dissent  therefrom  (chap.  5,  sec.  GO). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  only  liable  for  their 
unpaid  .stock  subscriptions  (chap.  5,  sec.  9).  No  stock  can  be  assigned  on 
tiie  books  of  the  corporation  without  the  consent  of  the  corporation  until  all 
dues  and  debts  are  paid  thereon  (chap.  5,  sec.  57).  If  the  stock  is  assigned 
before  all  stock  subscriptions  are  paid  thereon,  the  assignee  is  liable  for  any 
instalments  which  have  accrued  or  which  may  thereafter  accrue  under  the 
subscription  agreement  (Id.). 

U.  Stock  Certificates.  —  Each  stockholder  is  entitled  to  a  certificate 
signed  by  the  president  or  one  of  the  vice-presidents  and  the  treasurer,  or  by 
any  two  officers  of  tlie  corporation  thereto  authorized  by  the  board  of  direc- 
tors (chap.  5,  sec.  14). 

15.  Preferred  Stock.  —  Preferred  stock  is  expressly  authorized  by  the 
act.  Provision  may  be  made  for  the  issuance  of  the  same,  either  in  the 
original  certificate  or  by  subsequent  amendment  thereto.  Preferred  stock 
may  be  issued  if  desired  subject  to  redemption  if  desired  three  years  after  the 
issue  thereof  at  a  price  not  less  tlian  par.  Dividends  thereon  may  be  made 
cumulative  or  non-cuinulutive  as  desired  (chap.  1,  sec.  2;  chap.  5,  sec.  lo). 

IG.  Payment  of  Capital  Stock.  —  Stock  may  be  issued  for  money, 
land,  or  otlier  properly,  real  or  personal,  leases,  options,  mines,  minerals, 
mineral  rights,  patent  rights,  rights  of  way,  easements,  contracts,  labors,  or 
services.  The  act  provides  that  there  shall  be  no  individual  liability  ori  any 
subscriber  beyond  the  obligation  to  comply  with  his  contract  of  sub.scription. 
Corporations  are  expressly  authorized  to  dispose  of  its  stock  for  the  purposes 
of  its  incorporation,  at  such  prices  and  for  such  consideration  and  on  such 
terras  and  conditions  as  it  sees  fit,  provided,  however,  that  the  entire  plan  for 
the  issuance  of  stock  together  with  the  valuations  placed  upon  the  property  to 
be  taken  in  exchange  for  stock  shall  be  submitted  to  the  State  corporation 
commission  before  the  issue  is  made.  The  act  further  provides  that  the 
judgment  of  the  directors  as  to  the  value  of  the  property  taken  in  excliange 
for  stock  shall,  in  the  absence  of  fraud  in  the  transaction,  be  conclusive. 
For  violating  this  provision  a  fine  of  .$1,000  may  be  imposed,  and  judgment 
entered  then; lor  by  the  said  corporation  commission,  which  is  given  judicial 
powers  for  tliis  purpose  (chap.  5,  sec.  9). 

17.    Books.  —  Transfer  books  niu.st  be  kept  (chap.  5,  sec.  IS). 

is.  OfiBce  and  Agent.  —  Corporations  must  have  a  principal  ofiice  within 
the  State.  In  case  the  ofiicers  and  directors  are  non-residents  of  (he  counly, 
city,  or  town  wiicre  the  principal  office  is  located,  tliey  must  annually,  by 
written  power  of  attorney,  appoint  some  practising  attorney  of  law  resid- 
ing therein  as  its  attorney  or  agent  upon  whom  .service  of  jtrocess  may  be 
made  who  shall  be  autliorized  to  enter  an  appearance  in  its  behalf.  Tliis 
power  of  attorney  must  be  recorded  in  the  clerk's  office  of  thi-  circuit 
court  of  the  county  or  the  corporation  or  chancery  court  of  the  city  where- 
in tlie  principal  office  of  the  corporation  is  located.  It  must  also  be  filed 
in  the  office  of  the  Secretary  of  the  Commonwealth  (chap.  1,  sec.  2;  chap. 
5,  sees.  5,  ■iU). 

19.  Reports.  —  Companies  incorporated  under  the  general  laws  must, 
within  thirty  days  after  the  annual  meeting,  file  in  office  of  State  corporation 
conimi.ssiou  a  report  stating  name  of  the  corporation,  location,  character  of 
business,  authoriz<'<l  cai>ital  stock,  amount  issui'd  and  outstanding,  names  and 
addresses  of  officers  and  directors,  date  of  next  annual  meeting.     Kvery  c(jr- 

381 


INCOUrORATION    AND   ORGANIZATION    OP   CORPORATIONS. 

poration  imist  file  witli  the  State  corporation  comnussion  by  February  1st  of 
each  year  report  of  the  aiuount  of  its  inaxiiimiii  capital  stock.  Every  corpo- 
ration AuxU  also  at  the  time  of  paying  its  annual  registration  fee  make  to  the 
State  corporation  comnussion  sucii  report  of  its  status,  business,  or  condition 
as  the  State  corporation  commission  shall  require.  Non-compliance  with 
these  provisions  subjects  the  corporation  to  a  line  of  not  less  than  -1525  and  not 
more  than  J^lOti  for  each  thirty  days'  default  (chap.  1,  sec.  30). 

'20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  ia 
Virginia. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Whenever  the 
princip'h,!  purpose  for  which  the  corporation  was  formed  has  failed  or  the 
management  thereof  is  abandoned  by  its  olRcers,  or  when  operations  under 
the  charter  have  been  suspended  or  abandoned  for  a  period  of  three  years,  or 
the  corporation  has  become  insolvent,  the  charter  of  such  corporation  is  liable 
to  forfeiture  or  may  be  dissolved  (chap.  1,  sec.  15). 

22.  Amendments.  —  At  any  time  before  the  amount  of  stock  fixed  by 
the  incorporators  shall  have  been  subscribed,  any  alteration  or  amendment  of 
the  original  certificate  may  be  had  by  complying  with  the  provisions  of  the 
act.  The  same  right  is  given  at  any  time  after  subscriptions  have  been  com- 
pleted but  before  the  corporation  is  duly  organized.  After  organization  the 
corporation  may  amend  its  charter  for  any  purpose  desired  by  complying  with 
the  provisions  of  the  act  (chap.  1,  sees.  5,  6,  7,  9,  10). 

23.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for 
the  extension  of  corporate  existence  after  the  expiration  of  the  charter. 

24.  Dissolution.  — The  incorporators  before  the  payment  of  any  part  of 
the  capital  stock  and  before  beginning  business  may  surrender  all  their  cor- 
porate riglits  and  franchises  by  following  the  steps  prescribed  in  the  statutes. 
After  organization  on  resolution  of  a  majority  of  the  board  of  directors  with 
the  consent  of  two-thirds  in  interest  of  the  stockholders  the  charter  may  be 
voluntarily  dissolved  (chap.   1,  sees.  11,  12,   15). 

25.  Annual  Franchise  Tax.  —  Before  March  1st  of  each  year  every  cor- 
poration shall  i)ay  into  tlie  treasury  of  the  State  a  tax  assessed  by  the  State 
coriX)ration  commission  as  follows:  With  capital  stock  of  $25,000  and  under, 
§10;  over  825,000  and  not  exceeding  S.")0,000,  $20;  over  1^.50,000  and  not 
exceeding  8100,000,  S40  ;  over  !$100,000  and  not  exceeding  $300,000,  $G0;  over 
8300,000  and  not  exceeding  $500,000,  $100  ;  over  $500,000  and  not  exceeding 
$1,000,000,  $200  ;  in  excess  of  $1,000,000,  SIO  for  each  additional  $100,000 
or  fraction  thereof.  Non-payment  within  the  time  required  subjects  the 
corporation  to  a  penalty  of  five  jier  cent  per  annum  (Acts  of  1903,  p.  182). 

26.  Annual  Registration  Fee.  —  All  domestic  corporations  other  than 
charitable  and  foreign  corporations  doing  business  within  the  State  shall  pay 
annually  into  the  treasury  of  the  State  before  March  1  of  each  year  the  fol- 
lowing registration  fee:  With  cai)italization  of  $15,000  or  under,  $5;  over 
$15,000  and  not  exceeding  $50,000,  $10:  over  $50,000  and  not  exceeding 
$100,000,  $15;  over  $100,000  and  not  exceeding  $300,000,  $20;  over  $300,000, 
$25.  This  fee  is  payable  in  addition  to  the  annual  franchise  tax  or  other 
taxes  imposed  upon  tlie  corporation.  Failure  to  pay  such  fee  for  two  years 
and  ninety  days  operates  as  revocation  of  the  charter  of  the  corporation 
(Act  of  1903,  pp.   180,  182). 

27.  Foreign  Corporations.  —  I\Iust  file  with  Corporation  Commission 
appointment  of  agent  upon  whom  process  may  be  served,  together  with  two 
authenticated  copies  of  their  charter  and  a  certificate  of  State  Auditor  showing 

382 


SYNOPSIS-DIGEST    OF   INCORPORATION   ACTS. 

payment  of  license  fees.  Thereupon  a  license  is  issued.  They  are  taxed  the 
same  as  domestic  corporations  upon  their  property  within  the  State.  Code, 
sees.  1104,  1105,  as  amended  by  Laws  of  1903,  chap.  242. 

Slaughter  v.  Commonwealth,  1.3  Grat.  767 ;  Nickels  v.  P.  B.  L.  &  S.  Ass'n,  93  Va. 
380;  25  S.  E.  8  ;  Goldsberry  v.  Carter,  100  Va.  438;  41  S.  E.  858. 


WASHINGTON. 

(The  references  below  are  to  Ballinger's  Code  and  Statutes  of  Washington  (1897),  unless 
otherwise  stated.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. — 
The  Business  Corporation  Act  of  Washington  is  to  be  found  in  liallinger's 
Code,  sees.  4250-4302  and  acts  amendatory  tliereof.  Parties  may  incorporate 
thereunder  for  manufacturing,  mining,  milling,  wharfing,  and  digging, 
mechanical,  banking,  mercantile,  improvement,  and  building  purposes,  or  for 
the  building,  equipping,  and  managing  water  flumes  for  the  transportation  of 
wood  and  lumber,  or  for  the  purpose  of  building,  equipping,  and  renting 
railroads,  or  constructing  canals  or  irrigation  canals,  or  engaging  in  any  other 
species  of  trade  or  business.     (See  Laws  of  1903,  chap.  84.) 

2.  Incorporators. — Two  or  more  persons.  There  are  no  residential  re- 
quirements (sec.  4251). 

Ha.stines  v.  Company,  29  Wash.  224  ;  69  Pac.  776. 

3.  Contents  of  the  Articles  of  Incorporation.  —  The  articles  of  incor- 
poration must  contain  : 

a.  Name.  —  No  name  can  be  used  similar  to  that  of  an  existing  domestic 
corporation  or  of  any  foreign  corporation  that  has  obtained  a  permit  to  do 
business  within  the  Stale  (sec.  4251  ;  Laws  of  1903,  chap.  84). 

h.  Purposes.  —  The  objects  for  which  the  corporation  is  formed  must  be 
stated.  The  statute  is  construed  by  the  Secretary  of  State  to  permit  the 
in.sertion  of  any  number  of  purposes  in  the  articles  (sec.  4251). 

c.  Capital  Stock.  —  The  amount  of  capital  stock,  which  may  be  any  amount 
(.sec.  4251). 

d.  Duration.  — Time  of  existence,  not  to  exceed  fifty  years  (sec.  4251). 

e.  Numher  of  Shares.  —  It  is  not  necessary  to  state  the  par  value  of  shares, 
and  this  may  be  any  amount  (.sec  4251). 

/.  Trustees.  —  Number  of  trustees  and  names  of  tho.se  who  sliall  manage 
tlie  concerns  of  the  company  for  at  least  two  and  not  more  than  six  mouths 
(sec.  4251). 

f/.  Domicile.  —  The  name  of  tlie  city,  town,  or  locality  in  the  county 
in  which  the  principal  place  of  business  of  the  company  is  to  be  located 
(sec.  4251), 

4.  Statutory  Powers.  —  In  addition  to  the  statutory  enumeration  of 
common  law  powers,  the  statute  confers  the  following  additional  powers  :  The 
right  to  vote  by  proxy,  to  remove  trustees,  to  forfeit  stock  for  non-payment  of 
asse.ssment,  and  giving  stockholders  in  mining  cf)mpanies  tlm  right  to  inspect 
property  (sees.  4253,  4255,  4202  ;  I>aw8  of  1901,  chap.  120). 

Par.xons  i>.  Company,  25  Wasli.  492;  r>')  P.'u.  7C.'j  ;  Harto  c.  Nix,  15  Wjusli.  563* 
40  Pac.  1033. 

5.  Procuring  the  Charter.  —  The  incorpor.itors  must  suh.srribe  and 
acknowl.dge  before  an  olliier  authorized  to  take  acknowledgments  llie  articles 

383 


INCORPORATION    AND   OUGANIZATION    OF    CORPORATIONS. 

of  incorporation  in  triplioatp.  One  of  these  must  be  filed  in  tlie  ollice  of  tlie 
Secretary  of  Slate  ami  another  with  tlie  CDunty  auditor  of  the  county  i"  which 
the  principal  place  of  business  of  the  company  is  intended  to  be  located. 
A  third  copy  should  be  retained  by  the  incorporators  (sec.  42.')1). 

t).    Corporate   Indebtedness.  —  There  is  no  limitation  upon  the  amount  • 
of  corporate  indebtedness  which  a  corporation  may  incur. 

7.  Organization   Tax.  —  There  is  no  ovganization  tax  in  Washington. 

8.  Filing  and  Recording  Pees.  — To  the  Secretary  of  State,  SjslO  for 
filin<4-  fees;  ^5  for  issuing  certificate  of  incorporation;  15  cents  per  folio  for  re- 
cording articles  with  the  county  auditor;  10  cents  per  folio  for  filing.  For 
certified  copy  of  articles,  $.').  If  cojjies  to  be  certified  exceed  twenty  folios,  a 
charge  of  lo  cents  per  folio  for  such  excess  (sees.  4285,  4287,  4288). 

9.  Commencing  Business.  —  Before  commencing  business  and  within 
thirty  days  after  it  shall  have  filed  its  certificate  of  incorporation  with  the 
county  auditor  of  the  county  in  which  it  has  its  principal  place  of  business, 
the  corporation  must  file  with  the  hitter  a  statement  sworn  to  by  its  president 
and  attested  by  its  secretary  and  sealed  with  its  corporate  seal,  containing  a 
list  of  all  its  officers  and  names  and  addresses  and  terms  of  office  for  which 
they  have  been  chosen  (sees.  4259,  4260).  Before  business  is  commenced  all 
the  capital  stock  must  be  subscribed. 

City  of  Spokane  v.  Trustees,  22  Wash.  172;  GO  Pac.  141. 

10.  Organization  Meeting.  —  The  organization  meeting  must  be  held 
within  thirty  days  after  the  certificate  of  incorporation  is  filed  with  the 
county  auditor  as  required  by  law.  The  meeting  must  be  held  within  the 
State,  and  statutory  provision  is  made  for  calling  the  same  (sees.  4255,  4258, 
4260). 

11.  Meetings  of  Stockholders  and  Trustees.  —  There  are  no  pro- 
visions as  to  where  meetings  shall  be  held,  except  that  meetings  for  the  elec- 
tion of  trustees  must  be  held  at  the  principal  place  of  business  within  the  State. 
Places  for  other  meetings  are  fixed  by  the  by-laws  (sees.  4255,  4258,  4276). 

12.  Trustees'  Qualifications  and  Liabilities.  a.  Qualifications.  — 
There  must  be  at  least  two  trustees  who  must  be  stockholders  and  one  of 
whom  shall  be  a  resident  of  the  State  of  Washington,  and  a  majority  of  them 
citizens  of  the  United  States,  and  must  take  and  subscribe  to  an  oath  of  office 
(sec.  4255). 

h.  Liabilities.  —  All  trustees  not  formally  dissenting  to  the  declai-ation  of 
illegal  dividends  or  to  the  unlawful  withdrawal  of  any  part  of  the  capital 
stock  are  jointly  and  .severally  liable  to  the  corporation  and  to  the  creditors  to 
the  full  amount  so  divided  or  reduced  or  paid  out  (sec.  4205 ;  see  also  Laws 
of  1903,  chap.  93). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  only  liable  to  the 
extent  of  their  unpaid  stock  subscriptions  (sec.  42G2  ;  Cons.,  Art.  XII.  sec.  4). 

14.  Stock  Certificates.  —  Stock  certificates  must  be  signed  by  such 
officers  as  the  by-laws  prescribe. 

15.  Preferred  Stock.  —  The  act  does  not  expressly  authorize  the  issu- 
ance of  preferred  stock. 

10.  Payment  of  Capital  Stock.  —  Stock  must  be  paid  for  in  money 
or  money's  worth.  Special  provision  is,  however,  made  in  the  case  of  mining 
corporations.  W'here  the  amount  of  capital  stock  of  such  corporations  con- 
sists of  the  aggregate  valuation  of  the  whole  numl)er  of  feet,  shares,  or  interest 
in  any  mining  claim  within  the  State,  no  material  subscription  to  the  capital 
384 


SYNOPSIS-DIGEST    OF    INCORPORATION   ACTS. 

stock  is  necessaiy,  but  each  owner  thereof  shall  be  deemed  to  have  subscribed 
such  an  amount  to  the  capital  stock  of  the  corporation  as  in  its  by-laws  shall 
represent  the  value  of  so  much  of  his  interest  in  said  mining  claims  or  legal 
title  to  which  he  may  by  deed  or  other  instrument  vest  in  the  corporation  for 
mining  purposes  (sec.  42S0 ;  Cons.,  Art  XII.  sec.  0). 
Dunlap  V.  Ranch,  24  Wash.  620 ;  64  Pac.  807. 

17.  Books.  —  Stock  tiansfer  books  must  be  kept  at  all  times  at  the 
principal  office  of  the  corporation  in  the  State  (sec.  4269).  These  are  open 
to  the  inspection  of  stockholders. 

State  V.  Company,  21  Wash.  451  ;  58  Pac.  584. 

18.  OflHce  and  Agent.  —  Every  corporation  must  maintain  an  office 
within  the  State  and  an  agent  to  receive  .service  of  process  (sec.  i'27)l). 

19.  Reports.  —  Before  the  second  Tuesday  in  January  incorporators  must 
file  with  the  auditor  of  the  county  where  business  is  located  a  statement 
showing  names  and  addresses  and  titles  of  company's  officers  and  terms  of 
office,  and  also,  within  thirty  days  of  date  of  incorporating,  must  file  a  similar 
report.  No  penalty  for  failure,  and  the  provision  is  generally  disregarded 
(sees.  4250,  42G0). 

20.  Anti-Trust  Statute.  —  There  is  no  anti-trust  statute  in  force  in  this 
State.  The  constitution,  however,  prohibits  combinations  to  fix  the  price  or 
limit  the  production  of  commodities  (Cons.,  .\rt.  XII.  sec.  22). 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  provisions  of 
law  as  to  the  bringing  of  information  in  -the  nature  of  quo  warranto  against 
corporations  will  be  found  in  P)allinger's  Codes  and  Statutes  (sees.  5189,  5190). 

22.  Annual  Franchise  Tax.  —  On  or  before  June  1st  of  each  year  every 
corporation  must  pay  an  annual  license  fee  of  !?10  (sec.  4289). 

23.  Amendments.  -  'J'he  power  of  amendment  only  extends  by  express 
enactment  to  the  increasing  and  decreasing  of  capital  stock  and  to  change  in 
the  location  of  the  principal  place  of  business  (sees.  4251,  4271,  4276;  Laws  of 
1899,  chap.  106). 

24.  Extension  of  Corporate  Existence.  —  Xo  provision  is  made  for  the 
extension  of  corporate  existence. 

25.  Dissolution.  —  Corporations  may  be  dissolved  on  vote  of  two-tliirds 
of  all  stockholders  upon  application  to  the  courts,  or  by  three-fourths  vote  of 
all  its  members  it  may  surrender  its  corporate  powers  (sec.  4275). 

26.  Foreign  Corporations.  —  Must  file  with  the  Secretary  of  State  certi- 
fied copy  of  charter  and  appointment  of  resident  agent  to  receive  service  of 
process.  Shall  pay  a  license  fee  of  $10  each  year  (Laws  of  1899,  chap.  58, 
sees.  4289-4294). 

Whitman  Ag.  Co.  ;-.  Strand,  8  Wa.sh.  647  ;  .16  Pac.  682 ;  Edi.son  Co.  v.  Canadian 
Co.,  8  Wash.  370  ;  .36  Pac.  260  ;  Uatlibone,  etc.  Co.  v.  Frost,  9  Wasli.  162  ;  37  Pac.  298 


WEST    VIRGINIA. 

(The  fpferenrcR  lielow  arc  to  the  Code  of  West  Virj,'iiiia,  1809,  clinps.  52-.')4,  b.h  nmcndi'd 
by  Laws  of  1901,  chap.  35.) 

1.    Statutes  under  w^hich   BusinesB   Corporations   may  incorporate. 

—  Tin-  Husiness  Corporatidn  .\(t  is  to  be  fdund  in  the  Code  df  West  \'irL;inia 
(Laws  of  1891,  as  amende<l  in  19t»l ),  chap.  52,  si'cm.  1-21;  cliaji.  M,  sees.  l-(5:{; 
chap.  54,  sees.  1-8.3.     Domeatic  cf>rporation8  are  divided  into  two  principal 

2"'  385 


INCORPORATION    AND    ORGANIZATION  OF   CORPORATIONS, 

classes:  lli'siilont  corporations,  wliose  principal  business  and  chief  works  are 
to  be  located  within  the  State;  and  non-resident  corporations,  whose  principal 
business  anil  chief  works  are  to  be  located  without  the  State.  No  corjx)ration 
can  be  incorporated  for  tlie  sole  purpose  of  purchasing  real  estate  in  order  to 
sell  the  same  for  profit  (Code  52  :  3,  as  amended  by  Laws  of  1901,  chap.  35, 
and  Laws  of  1903,  chap.  3). 

2.  Incorporators.  —  Five  or  more  persons.  There  are  no  residential 
requirements  (Code  54  :G). 

Crumlish  Admr.  v.  Ry.  Co.,  40  W.  Va.  627  ;  22  S.  E.  90. 

3.  Contents  of  the  Agreement  of  Incorporation  (Non-Resident  Cor- 
jxirations).     The  agreement  of  incorporation  must  contain  : 

a.  Name.  —  Similarity  of  corporate  names  forbidden  (Code  54  :  6,  sub.  1 ; 
see  also  Code  53  :  11  ;  Laws  of  1903,  chap.  :»,  sec.  3). 

b.  Domicile.  —  Location  of  its  principal  place  of  business  and  its  chief 
works  (Code  54:6,  sub.  2).  The  principal  olFice  need  not  be  wilhin  the 
State.     (See  Code  53  :  46.) 

c.  Ptirpoaes.  —  Objects  for  which  the  corporation  is  formed.  Any  num- 
ber of  purposes  may  be  inserted  (Code  54 :  G,  sub.  3). 

d.  Capital  Stock.  —  Amount  of  total  authorized  capital  stock,  number  of 
shares  and  par  value  thereof,  aiid  the  amount  of  the  same  paid  in.  If  pre- 
ferred stock  is  desired,  the  terms  on  which  the  same  is  issued  must  be  set 
forth  (Code  54  :  6,  sub.  4;  see  also  Code  53  :  17,  as  amended  by  Laws  of  1901, 
chap.  35).     Capitalization  and  par  value  of  shares  may  be  any  amount  (Code 

53  :  15). 

e.  Stock  Suhscriplions  hj  Incorporators.  —  Names  and  post-office  addresses 
of  the  incorporators  and  the  number  of  shares  subscribed  for  by  each  (Code 

54  :  6,  sub.  5).  There  must  be  at  least  five  bona  fide  stockholders,  who  are 
required  to  pay  in  ten  per  cent  of  their  subscriptions  forthwith  (Code  53  :  17, 
25). 

/.  Duration.  —  Period  of  corporate  existence  not  to  exceed  fifty  years 
(Code  54 : 6,  sub.  6  ;  see  also  Code  54  :  11,  as  amended  by  Laws  of  1901,  chap. 
35). 

g.  Provisions  for  Regulation  of  Corporate  Affairs.  —  Any  provisions  de- 
sired may  be  inserted  for  the  regulation  of  the  business  and  for  the  conduct 
of  the  affairs  of  the  corporation,  or  defining,  limiting,  or  regulating  the 
powers  of  the  corporation,  the  stockholders,  and  directors  (Code  54:  6,  sub.  7). 

h.  If  the  corporation  desires  to  hold  more  than  ten  thousand  acres  of  land 
in  West  Virginia,  the  agreement  nmst  set  forth  the  maximum  number  of  acres 
it  desires  to  hold  (Code  54  :  G). 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  the 
common  law  powers  of  corporations  (Code,  chap.  52,  sec.  1),  the  following 
additional  powers  are  granted  :  To  subscribe  with  the  consent  of  the  stock- 
holders for  the  stock  of  other  corporations ;  to  vote  by  proxy ;  to  transact 
business  in  other  States  and  countiies  ;  to  hold  its  organization,  stockholders  ', 
and  directors'  meetings  outside  of  the  State;  to  purchase  its  own  stock  ;  to 
transfer  all  its  assets  ;  to  issue  its  stock  for  property  or  services  ;  may  have 
an  office,  own  property,  and  carry  out  the  corporate  purposes  without  the 
State  ;  cumulative  voting  in  the  election  of  directors  is  mandatory;  to  appoint 
an  executive  committee  from  the  board  of  directors;  to  forfeit  stock  for  non- 
payment of  assessments ;  to  remove  directors,  and  to  issue  preferred  stock 
and  bonds  (Code  52  : 1 ;   52  :  3  ;   53  :  3  ;  54  :  6  ;  54  :  23  ;    53  :  18 ;   54  :  83,  as 

380 


SYxXOPSIS-DIGEST   OF   INXORPORATIOX   ACTS. 

amended  by  Laws  of  1901,  chap.  35;  53:24;  53:42;  53:44:  53-53:  53 -IG- 
54:82  c,  sub.  11.  '      ' 

Cross  V.  Ry.  Co.,  35  W.  Va.  174;  12  S.  E.  1071. 

5.  Procuring  the  Charter.  —  The  agreement  of  incorporation  mast  be 
signed  and  acknowledged  by  each  of  the  five  incorporators.  Each  incorpo- 
rator nuist  be  a  subscriber  for  at  least  one  share  of  stock.  Two  of  the 
incorporators  must  give  their  affidavit  that  the  amount  stated  therein  to  have 
been  paid  on  the  capital  stock  has  been  in  good  faith  paid  in  for  tlie  purposes 
of  the  business  of  the  intended  corporation  and  witli  no  intention  or  understand- 
ing tliat  the  same  shall  be  withdrawn.  The  original  agreement  of  incorpora- 
tion must  be  filed  in  the  office  of  the  Secretary  of  State.  Within  three  months 
therefrom  a  certified  copy  thereof  must  be  recorded  in  the  office  of  the  clerk 
of  the  county  court  where  the  principal  office  is,  or  wherein  the  resident 
agent  resides  (Code  54  :  G-9  ;  54  :  20,  as  amended  by  Laws  of  1901,  chap.  35). 

Greenbrier  Ex.  v.  Rodes,  37  W.  Ya.  738  ;  17  S.  E.  305. 

6.  Corporate  Indebtedness.  —  There  is  no  statutory  limitation  upon  the 
amount  of  indebtediifss  which  the  corporation  may  incur. 

7.  Organisation  Tax.  —  The  organization  tax  is  in  fact  the  first  year's 
annual  tax.  The  statute  distinguishes  between  resident  and  non-resident 
corporations  in  the  matter  of  organization  taxes.  Kesident  corporations  are 
those  whose  principal  place  of  business  and  chief  works  are  to  be  located  in 
West  Virginia.  Non-resident  corporations  are  those  whose  principal  place  of 
business  and  chief  works  are  located  outside  of  West  Virginia.  For  both 
classes  of  corporations  the  licen.se  year  begins  May  1st.  On  every  certificate 
issued  after  August  1st  the  State  only  collects  one-tenth  of  the  annual  license 
tax  for  each  month  or  fraction  thereof  for  the  remainder  of  the  license  year, 
but  in  no  case  to  be  less  than  §5  for  resident,  §10  for  non-resident  corporations. 
However,  if  the  charter  issues  on  or  after  March  1st,  then  in  addition  to  the 
proportionate  tax  for  the  remaining  two  months,  there  must  be  paid  al.so  a 
tax  for  the  full  license  year  beginning  May  1st  thereafter.  For  resident  cor- 
porations the  annual  license  tax  is  as  follows  :  Where  the  authorized  capital  is 
810,000  or  less,  $10  ;  up  to  .?25,000,  $15;  up  to  350.000,  S20  ;  up  to  8100,000, 
825;  for  each  additional  $1,000  up  to  .^1,000.000,  5  cents  per  thousand. 
Where  the  capital  .stock  is  more  than  !$1, 000,000,  the  tax  is  !?70,  and  SIO 
additional  for  every  $1,000.00')  or  fractional  part  thereof  over  the  first  million 
(Code  32 :  80,  as  amended  l)y  Laws  of  U)OI,  chap.  35;  Laws  of  1903,  chap.  3). 

For  non-resident  corporations  the  annual  liccnsi;  tax  is  as  follows  :  For  any 
amount  up  to  82.1,00:),  i$20 ;  up  to  .'$100,000,  $.'jO  ;  up  to  .?  1.000,000,  §.-.0,  and 
40  cents  per  thousand  on  eacli  81,000  or  fractional  part  thereof  in  excess  of 
8100.000.  Where  the  capitalization  does  not  exceed  82,000,000,  the  tax  is 
Sno  plus  30  cents  per  thousand  on  each  additional  8100,000  or  fractional  part 
thereof  in  excess  of  81,000,000.  Where  the  capitalization  does  not  exceed 
83,000.000,  the  tax  is  8710,  plus  20  cents  [.er  thousand  on  each  additional 
8100,000  in  cxce.ss  of  82,000,000.  Where  the  capitalization  docs  not  exceed 
81,000.000,  the  tax  is  8910,  plus  10  cents  i>er  thousand  on  each  additional 
8100,000  or  fractional  part  thereof  in  excess  of  83,000,000.  Where  the 
capitalization  is  over  81.000.000,  the  tax  is  81,010,  and  850  on  each  81,000,000 
or  fractional  part  thereof  in  excess  of  81,000,000  (Code  32:87,  as  amended 
by  Laws  of  1001,  chap.  35;  Laws  of  1903.  chap.  3). 

8.  Filing  and  Recording  Fees.  —  To  the  Secretary  of  Stat"  ff)r  charter, 

387 


INCOKrORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

SC  ;  cortifiod  copy  of  atrreeniciit  of  incorporation,  $5  ;  to  filing  and  recording 
jxnver  of  attornoy  to  act  as  resident  agent  in  Secretarj-  of  Stale's  office,  fo; 
for  filing  and  recording  same  in  comity  clerii's  office,  about  !i?1.25,  agreement 
of  incorporation,  SJ,  if  it  does  not  exceed  four  liundred  words;  if  over  that, 
3  cents  for  each  additional  thirty  words. 

9.  Commencing  Business.  —  The  corporation  must  hold  its  organization 
meeting  within  six  months  after  the  issuance  of  the  certificate  of  incorpora- 
tion. Within  thirty  days  after  organization  an  agent  witliin  the  State  mu.st 
bo  appointed  upon  whom  process  may  be  served.  Business  must  be  com- 
menced within  one  year  from  time  charter  is  issued  (Code  53  :  6  and  5-4  :  15, 
as  amended  by  Laws  of  1901,  chap.  35). 

10.  Organization  Meeting.  —  May  be  held  within  or  without  the  State 
(Code  51:  15,12:5). 

11.  Meetings  of  Stockholders  and  Directors.  —  If  the  by-laws  so  pro- 
vide, any  stockholders'  or  directors'  meetings  may  be  held  without  the  State. 
Otherwise  they  must  be  held  within  the  State  (Code  54:23;  see  also  Code 
53  :  51,  as  amended  by  Laws  of  1901,  chap.  35). 

12.  Directors'  Qualifications  and  Liabilities.  a.  QtuiUJicationii.  — 
There  must  be  at  least  five  directors,  unless  the  by-laws  otherwi.se  prescribe. 
Unless  otlierwise  provided  by  the  by-laws,  directors  must  be  stockholders 
and  residents  of  the  State  (Code  53  :  49). 

b.  Liabilities.  —  Assenting  directors  are  jointly  and  severally  liable  to 
creditors  for  the  illegal  declaration  of  dividends,  to  the  extent  of  the  capital 
illegally  withdrawn  in  this  manner  (Code  53  :  40). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  liable  to  creditors  to 
the  amount  of  tlieir  unpaid  stock  subscriptions.  They  are  also  liable  to 
creditors  to  the  extent  of  any  illegal  dividends  received  by  them  (Cons.,  Art. 
IL  sec.  2  ;  Code  53  :  22,  40). 

14.  Stock  Certificates.  —  Must  be  signed  by  the  president  or  vice-presi- 
dent and  such  other  officers,  if  any,  as  the  board  of  directors  may  direct.  The 
certificates  must  show  the  amount  paid  on  each  share  (Code  53  :  35,  as 
amended  by  Laws  of  1901,  chap.  35). 

15.  Preferred  Stock.  —  The  act  specifically  provides  that  preferred  stock 
may  be  issued  either  by  providing  for  it  in  the  certificate  of  incorporation,  or 
by  resolution  adopted  at  a  general  meeting  of  the  corporation  (Code  53  :  61; 
Code  54:  6,  as  amended  by  Laws  of  1901,  chap.  35). 

16.  Payment  of  Capital  Stock.  — •  The  statute  provides  that  at  least  ten 
per  cent  of  the  par  value  of  each  share  shall  be  paid  at  the  time  of  such  sub- 
scription, and  the  residue  as  required  by  the  board  of  directors  or  the  commis- 
sioners having  control  of  the  subscription.  Stock  in  corporations  other  than 
mining  and  manufacturing  shall  not  be  sold  or  dispo.sed  of  at  less  than  par. 
except  by  a  vote  of  three-fourths  of  all  the  stock  of  the  corporation  outstand- 
ing after  the  advertisement  of  such  intention.  But  mining  or  manufacturing 
corporations  may  issue  stocks  or  bonds,  and  negotiate  the  sale  of  the  same,  in 
payment  for  real  and  personal  property,  at  such  price  and  upon  such  terras 
and  conditions  as  may  be  agreed  upon  by  the  owners  and  the  directors  or 
stockholders.  All  stock  so  issued  shall  be  fully  paid,  and  not  liable  for  any 
further  call  or  assessment,  and  in  absence  of  actual  fraud  in  the  transaction 
the  valuation  placed  by  the  directors  upon  the  property  so  purchased  shall  be 
conclusive  (Code  53  :  25,  52 :  24,  as  amended  by  Laws  of  1901,  chap.  35). 

Richardson  v.  Graham,  45  W.  Va.  134 ;  30  S.  E.  92. 

388 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

17.  Books. — Xo  books  are  required  to  be  kept  in  the  State  (see  Code 
53:47,  54). 

18.  OfBce  and  Agent.  —  Every  non-resideut  corporation  must,  witliin 
thirty  days  after  its  organization,  execute  a  power  of  attorney  appointing  a 
resident  agent  upon  whom  service  of  process  may  be  made.  This  power  of 
attorney  must  be  filed  in  the  office  of  the  Secretary  of  State,  and  in  olHce  of 
the  county  clerk  where  the  attorney  resides  (Code,  chap.  54,  sec.  24). 

19.  Reports.  —  The  board  of  directors  nmst  make  an  annual  report  to  the 
stockholders  of  the  condition  of  the  corporation.  They  must  also  within 
ninety  days  after  the  first  election,  and  after  every  annual  meeting  thereafter, 
make  a  report  giving  the  names  and  post-office  addresses  of  the  president  and 
secretary,  and  post-office  address  of  the  principal  office  of  the  corporation.  A 
penalty  is  provided  for  not  making  this  report  (Code,  chap.  53,  sec.  4G,  as 
amended  by  Laws  of  1901,  chap.  35). 

20.  Anti-TruBt  Statute.  —  There  is  no  anti-trust  statute  in  force  in  AVest 
Virginia. 

21.  Annual  License  Tax.  —  Is  the  same  amount  as  the  organization  tax 
already  set  forth.  It  becomes  due  and  payable  on  May  1st  of  each  year.  The 
penalty  for  not  paying  the  tax  before  September  1st  is  §5.  After  September 
1st  an  additional  one  per  cent  for  each  month  such  failure  continues,  together 
with  costs  of  publication,  etc.,  is  exacted  (chap.  19,  sec.  4). 

22.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  on  tlie  following  grounds  : 

(1)  For  failing  to  have  five  stockholders  for  a  period  of  six  months  (Code, 
chap.  53,  sec.  17). 

(2)  For  failure  to  pay  license  tax  (Code,  chap.  32,  sec.  90,  as  amended  by 
Laws  of  1901,  chap.  35;  Laws  of  1903,  chap.  4). 

(3)  For  suspension  of  business  for  two  years  (Code,  chap.  53,  sec.  7). 

(4)  For  failure  to  organize  and  commence  busine.ss  within  one  year  after 
incorporation  (Code,  chap.  53,  sec.  6,  as  amended  by  Laws  of  1901,  chap.  35). 

(5)  For  misuse  or  abuse  of  charter  (Code,  chap.  109,  sees.  6-12). 

(6)  Where  the  certificate  has  been  obtained  for  a  fraudulent  purpose,  or 
for  a  purpose  not  authorized  by  law  (Code,  chap.  109,  sees.  6-12). 

(7)  For  failure  to  appoint  resident  agent  as  required  by  law  (Code,  chap. 
54,  .sec.  21). 

23.  Amendments.  —  Charter  may  be  amended  for  any  purpose  desired  by 
complying  with  the  provisions  of  law  relative  thereto  (Code,  chap.  54,  sec.  10, 
as  amended  by  Laws  of  1!>01,  chap.  35;    Laws  of  1903.  chap.  3,  .sec.  5). 

21.  Extension  of  Corporate  Existence.  —  .May  be  extended  upon  com- 
pliance with  the  statute  for  an  aiMitional  period  of  fifty  years  (Code  54,  sec. 
11,  as  aiiiernli'd  by  Laws  of  1901.  cliap.  35). 

25.  Dissolution.  —  A  majority  of  the  stockholders  may  at  any  time  at  a 
meeting  resolve  to  di.scontinue  the  corporate  busincs.s,  and  may  divide  the 
property  and  a.ssets  that  may  remain  after  paying  the  debts  and  lial)ilitips  of 
the  corporation.  Before  a  certificate  of  dissolution  shall  i.ssue  all  Stati' 
licen.se  taxes  nmst  be  j>aid.  Not  less  than  one-third  in  interest  of  the  stock- 
holders of  a  corporation  desiring  to  wind  up  its  affairs  may  petition  the  court 
of  chancery  in  the  county  in  which  the  princiiial  office  or  place  of  business 
is  3ituat<;d  ;  but  if  there  be  no  such  office  or  jijaco  of  business  in  the  State, 
they  may  petition  the  circuit  court  of  the  county  in  which  the  othiT  stock- 
holders, or  any  one  or  more  of  them  reside,  stating  the  grounds  of  (heir 
application.     The  cliarter  may  also  be  voluntarily  surrendered  before  organ- 

38U 


INCOUrOUATION    AND    ORGANIZATION    OF    CORPORATIONS. 

ization  (Code,  chap.  53,  sec.  50;  chap.  53,  sees.  57-59;  chap.  53,  sec.  6,  as 
aiuoudoil  by  Laws  of  1901,  chap.  35;  Laws  of  1903,  chap.  3,  sec.  4). 

26.  Foreign  Corporations.  —  Foreign  corporations  must  iile  in  the  Secre- 
tary of  Stale's  ofUee  and  in  the  otlice  of  the  county  clerk  of  the  county  where 
the  principal  oU'ice  is  located,  a  copy  of  the  charter,  and  a  certificate  of  au- 
thority to  do  business  from  the  Secretary  of  State.  It  must  also  file  with  the 
Secret.iry  of  State  a  written  acceptance  of  the  condition  that  it  will  exercise 
its  powers  subject  to  same  conditions  imposed  upon  domestic  corporations.  It 
must  also  appoint  a  resident  agent  upon  whom  process  may  be  served,  which 
must  be  filed  with  the  Secretary  of  State  and  with  county  clerk  on  or  before 
]March  1st.  An  executive  officer  of  such  foreign  corporations  must  file  a  sworn 
report  with  the  State  Auditor  showing  the  name  of  such  corporation,  where 
and  when  incorporated,  names  of  oflicers,  capitalization,  the  amount  of  prop- 
erty owned  and  used  within  the  State,  and  the  proportion  it  bears  to  the  total 
capital  stock.  If  the  corixiratiou  has  property  to  the  amount  of  $5,000  em- 
ployed within  the  State,  it  is  entitled  to  pay  the  same  license  fee  as  is  imposed 
on  resident  domestic  corporations.  No  such  corporation,  however,  shall  pay 
an  annual  license  tax  of  less  than  $100  (chap.  32,  sec.  88 ;  chap.  51,  sec.  30,  as 
amended  by  Laws  of  19U3,  chap.  3). 

Toledo,  etc.  Co.  i>.  Thomas,  33  W.  Va.  566;  11  S.  E.  37;  B.  J.  Co.  v.  Scherr,  510 
W.  Va.  533 ;  40  S.  E.  514 ;  Floyd  v.  N.  L.  &  I.  Co.,  49  W.  Va.  327 ;  38  S.  E.  653. 


WISCONSIN. 

(The  references  are  to  the  Wisconsin  Statutes  of  1398,  unless  otherwise  stated.  They  are 
published  in  two  volumes,  and  are  edited  and  annotated  by  Sanborn  &  Berryman.) 

1.  Statutes  under  which  Business  Corporations  may  incorporate. 

—  The  Business  Corporation  Act  is  found  in  the  Revised  Statutes  of  Wisconsin 
(1S98),  sees.  1718-1791  m.  Special  acts  are  provided  for  banking,  insurance, 
railway  construction  and  operation  companies,  and  plank  and  turnpike  roads. 

2.  Incorporators.  —  Three  or  more.  All  must  be  residents  of  the  State 
(R.  S.,  sec.  1771). 

3.  Contents  of  the  Certificate  of  Incorporation.  The  certificate  of 
incorporation  must  contain : 

a.    Purposes.  —  Any  number  of  the  classes  specified  (R.  S.,  sec.  1771). 

State  ex  rel.  Lederer  v.  Company,  88  Wis.  512;  60  N.  W.  796. 

h.  Name.  —  Similarity  of  names  not  forbidden.  Cannot  use  the  names 
of  individuals  in  the  manner  in  which  they  are  ordinarily  used  in  copartner- 
ships (R.  S.,  sec.  1772,  sub.  2). 

I.  0.  of  F.  I'.  Commissioner,  98  Wis.  94 ;  73  N.  W.  326. 

c.  Domicile.  —  Location  within  the  State  (R.  S.,  sec.  1772). 

d.  Capital  Stock.  —  Amount,  number  of  shares,  and  par  value  of  same 
(R.  S.,  sec.  1772). 

e.  Directors  and  Officers.  —  Designation  of  general  officers  and  number  of 
directors.  There  must  be  at  least  three  directors,  and  they  may  be  divided 
into  classes  if  de.sired  (R.  S.,  sees.  1776,  1772,  sub.  4). 

/.  Duties  of  Officers.  —  Principal  duties  of  the  several  officers  respectively 
(R.  S.,  sec.  1772,  sub.  5). 

g.    Memhership.  —  INIethod  and  conditions  upon  which  members  shall  be 
accepted,  discharged,  or  expelled  (R.  S.,  sec.  1772,  sub.  6). 
390 


SYNOPSIS-DIGEST   OP   INCORPORATION   ACTS. 

h.    Regulation  of  Corporate  Affairs.  —  Provisions  for  the  interests  of  the 
corporation,  the  acknowledgment  of  the  purposes  thereof  (sec.  1772,  sub.  7). 
Ford  V.  Hill,  92  Wis.  188;  66  N.  W.  115. 

i.  Corporate  Existence.  —  Duration  may  be  inserted  if  desired ;  otherwise 
unlimited. 

j.  Organization  Meeting.  —  Time  and  place  for  first  meeting  for  election  of 
officers  (R.  S.,  sec.  1773). 

4.  Statutory  Powers.  —  In  addition  to  a  very  full  statutory  enumeration 
of  the  "common  laws"  and  "  incidental  powers"  the  act  provides  for  the 
following  additional  powers:  A  limited  power  to  hold  stock  in  other  cor- 
porations ;  to  vote  by  proxy  ;  to  issue  preferred  stock  ;  to  acquire  the  rights, 
privileges,  or  franchises  conferred  upon  any  person  by  the  law  of  the  State 
where  the  same  would  be  in  direct  aid  of  the  corporation's  business :  may 
establish  a  sinking  fund  for  the  payment  of  corporate  debts,  classify  directors, 
and  hold  stock  in  other  corporations;  may  sell  all  of  its  property  (K.  S., 
sees.  1748,  1754,  1757,  1759  a,  1760,  1775;  Laws  of  1899,  chaps.  100,  198; 
Laws  of  1903,  chap.  12). 

X.  M.  T.  S.  Co.  No.  2  V.  Bishop,  103  Wis.  492 ;  79  N.  W.  785 ;  Marvin  v.  Anderson, 
1 1 1  Wis.  387  ;  87  X.  W.  226. 

5.  Procuring  the  Charter.  —  The  articles  of  association  duly  signed  and 
acknowledged,  or  a  true  copy  thereof,  verified  as  such  by  the  atfidavits  of 
two  of  the  signers  thereof,  must  be  first  filed  in  the  ollice  of  the  Secretary  of 
State.  A  like  verified  copy  and  certificate  of  the  Secretary  of  State  showing 
the  date  when  the  articles  were  filed  and  accepted,  must  within  thirty  days 
thereafter  be  recorded  by  the  register  of  deeds  of  the  county  where  the  cor- 
poration is  located.  No  corporation  .shall  have  a  legal  existence  until  such 
articles  have  been  so  left  for  record.  Tlie  organization  tax  must  be  paid  to 
the  Secretary  of  State  at  tlie  time  the  articles  are  presented  to  him  for  filing 
(R.  S.,  sec.  1773,  as  amended  by  chap.  238,  Session  Laws  of  1901).  Business 
cannot  be  commenced  until  one-half  of  the  capital  stock  is  subscribed  and 
twenty  per  cent  paid  in  (R.  S.,  sec.  1773). 

Attorney  General  v.  Company,  35  Wis.  425 ;  B.  P.  Co.  v.  Rose  et  at.,  95  Wis.  145  ; 
70  N.  W.  302 ;  Slocuni  v.  Head,  105  Wis.  431  ;  81  N.  W.  673. 

0.  Corporate  Indebtedness.  —  Bonds  can  only  be  issued  for  money,  labor, 
or  property  t-stimated  at  its  true  money  value,  equal  to  seventy-five  per  cent 
of  the  par  value  tlnreof  (R.  S.,  sec.  1753).  There  is  no  statutory  limitation 
upon  tin-  amount  of  corporate  indebtedness. 

7.  Organization  Tax. — For  filing  articles  of  beet  sugar  or  dairy  com- 
panies, $10;  f(ir  filing  articles  of  companies  formed  for  the  purpose  of  mining, 
smelting,  and  owning  mines  and  minerals  in  the  State  of  Wi.sconsin,  8i_'5,  if 
the  capitalization  is  !B-5,000  or  less,  and  !?1  for  each  a<l(iitional  ifil.OOO  capital- 
ization up  to  .'?150,000  ;  and  for  all  .such  corporations  with  a  capitalization  in 
excess  of  $150,000,  a  fee  of  $150.  For  ail  other  business  cor])oratinn8  the  tax 
is  825  if  the  capital  stock  is  !?_'5,000  or  less;  if  in  excess  of  §25.<iO(».  there  is 
an  additional  tax  of  i^sl  for  earii  additional  thousand  dollars  of  capitalization 
(R.  S.,  sec.  1772,  as  amended  by  cliap.  23S,  Session  Laws  of  1901). 

8.  Filing  and  Recording  Fees. — There  are  no  fees  for  filing  articles  in 
the  ollice  of  the  Secretary  of  .State  other  than  the  payment  of  the  organization 
tax.      I'or  c(!rti(ie<l  lopy  of  articles  of  in(;orporation  tlin  charge  is  $5. 

9.  Commencing  Business.  —  Corporations  cannot  transact  business  ex- 

;rji 


INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

cept  with  its  nn'iiibois,  until  onelialf  of  the  authorized  capital  stock  is  sub- 
scribed, and  twenty  per  cent  thcreoC  actually  paid  in  (K.  S.,sec.  177:5).  lUisiuess 
uiust  be  eonnnenoed  within  one  year  after  articles  are  filed  (11.  S.,sec.  17G3). 

10.  Orgauizatiou  Meeting.  —  iMu.st  be  held  within  tlie  State.  It  cannot 
be  held  until  one-half  of  the  capital  stock  has  been  subscribed  (K.  S.,  sec. 
1773).  Intil  orgauizatiou  the  incorporators  have  by  statute  directiou  of  the 
affairs  of  the  corporation  (Id.). 

Heath  r.  Company,  39  Wis.  146. 

11.  Meetings  of  Stockholders  and  Directors.  —  Stockholders'  meet- 
ings must  be  held  withiu  the  State  (11.  S.,  sec.  1762).  Directors'  meetings 
may  be  held  without  the  State  if  the  by-laws  so  provide  (R.  S.,  177G). 

12.  Directors' Qualifications  and  Liabilities,  a.  Qualijications. — There 
must  be  at  least  three  directors,  all  of  whom  nmst  be  stockholders  (R.  S., 
sec.  1772,  sub.  4,  sec.  1776).     There  are  no  residential  requirements. 

h.  Liabilities.  —  Directors  are  liable  for  illegal  declaration  of  dividends  and 
for  transacting  business  before  one-half  of  the  capital  stock  is  subscribed  for, 
and  twenty  per  cent  actually  paid  in  (R.  S.,  sees.  1765,  1773). 

Gores  v.  Day,  99  Wis.  276 ;  74  N.  W.  787. 

13.  Stockholders'  Liabilities.  —  Stockholders  authorizing  the  transac- 
tion of  business  before  half  of  its  authorized  capital  is  subscribed  and  twenty 
per  cent  paid  in,  are  liable  for  debts  of  the  corporation  incurred  prior  thereto 
(R.  S.,  sees.  1755,  1756,  1773).  They  are  also  personally  liable  to  the  amount 
of  the  stock  held  by  them  for  wages  due  clerks,  servants,  and  laborers,  for  ser- 
vices performed  for  a  period  not  exceeding  six  months  in  length  (R.  S.,  sec. 
1769).  They  are  also  liable  for  the  debts  of  the  corporation  to  the  extent  of 
their  unpaid  stock  subscriptions  (R.  S.,  sec.  1756).  They  are  also  liable  to 
existing  creditors  to  the  extent  of  any  diminution  of  capital  stock  (R.  S., 
sec.  1755 ;  see  also  Laws  of  1901,  chap.  129). 

Sleeper  v.  Goodwin,  67  Wis.  577  ;  31  N.  W.  335  ;  Clokus  v.  Company,  92  Wis.  325  ; 
66  N.  W.  398. 

14.  Stock  Certificates.  —  Certificates  are  ordinarily  signed  by  the  presi- 
dent and  secretary  (11.  8.,  sec.  1751). 

15.  Preferred  Stock.  —  Provisions  may  be  made  for  preferred  stock 
either  in  the  charter  or  by  unanimous  vote  of  the  stockholders  at  any  time 
thereafter  (K.  S.,  sec.  1759  a;  Laws  of  1903,  chap.  109). 

16.  Payment  of  Capital  Stock.  —  Stock  can  be  issued  only  for  money, 
labor,  or  property  estimao3d  at  its  true  money  value,  equal  to  the  par  value 
thereof.  All  fictitious  increase  of  the  capital  stock  is  void.  An  exception  is 
made  in  the  case  of  stocks  listed  on  the  stock  exchanges  of  New  York,  Chicago, 
Boston,  and  Philadelphia  (R.  S.,  sec.  1753;  Laws  of  1899,  chap.  193). 

First  Ave.  Land  Co.  v.  Parker,  111  Wis.  1  ;  86  N.  W.  604  ;  Shaw  v.  Gilbert,  111 
Wis.  165;  86  N.  W.  188. 

17.  Books.  —  Stock  books  and  books  of  account  must  be  kept  by  the 
coqwration  at  its  principal  office  in  the  State  (R.  S.,  sees.  1750,  1757).  The 
former  are  open  to  the  inspection  of  stockholders  and  creditors. 

18.  Office  and  Agent.  —  Every  business  corporation  must  have  its  prin- 
cipal office  in  the  State,  and  its  managing  officer  or  superintendent  shall  also 
reside  therein  (R.  S.,  sec.  1750). 

19.  Reports.  —  Must  withiu  ten  days  after  election  of  its  officers  file  in 

a02 


SYNOPSIS-DIGEST   OF   INCORPORATION   ACTS. 

office  of  register  of  deeds  of  county  in  which  the  corporation  is  located,  and 
where  its  articles  of  incorporation  are  recorded,  a  list  containing  name  of  its 
president,  vice-president,  if  any,  secretary,  cashier,  or  managing  agent,  upon 
whom  service  of  process  may  be  made  (R.   S.,  sec.  1775  b). 

20.  Anti-Trust  Statute.  —  There  is  a  rather  stringent  anti-trust  statute 
in  force  in  Wisconsin.     (See  R.  S.,  sees.  1747  e,  f,  g,    1791   j,  k,  1,  m.) 

21.  Annual  License  Tax.  —  There  is  no  annual  license  ta.x. 

22.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  The  charter  may 
be  forfeited  for  failing  to  keep  an  office  and  a  managing  officer  or  superintend- 
ent within  the  State  (R.  S.,  sec.  1750)  ;  for  entering  into  illegal  trusts  (sec. 
1791  j,  k,  1) ;  also  where  charter  is  procured  upon  some  fraudulent  suggestion 
or  enactment  (R.  S.,  sees.  3210,  3241).  If  a  corporation  remains  insolverit  or 
neglects  to  pay  its  debts  or  suspends  its  ordinary  business  for  one  year,  it  is 
deemed  to  have  surrendered  its  charter,  and  shall  be  adjudged  to  be  dissolved 
(R.  S.,  sec.  1763). 

Phillips  V.  Albany,  28  Wis.  340;  State  ex  rel.  Cornish  v.  Tuttle,  53  Wis.  45; 
9  N.  W.  791  ;  Attorney  General  v.  Company,  93  Wis.  604  ;  67  N.  W.  1138. 

23.  Amendments.  —  Charter  may  be  amended  in  the  following  respects  : 
Modification  or  enlargement  of  its  purposes;  changing  its  name  or  location  ; 
increase  or  diminish  its  capital  stock  ;  change  its  officers  or  number  of  directors, 
or  to  provide  anything  which  might  have  been  provided  for  in  its  original  arti- 
cles (R.  S.,  sees.  1774,  1790;  Laws  of  1901,  chap.  238). 

Wood  V.  Ass'n,  63  Wis.  9  ;  22  N.  W.  756. 

24.  Dissolution.  —  Corporation  may  be  dissolved  by  two-thirds  vote  of 
capital  stock,  at  a  meeting  called  for  the  purpose  (R.  S.,  sec.  1789).  The 
charter  may  also  be  surrendered  before  organization  (R.  S.,  sec.  1773). 

Hinckley  et  al.  v.  Pfister  et  al.,  83  Wis.  64 ;  33  N.  W.  21. 

25.  Extension  of  Corporate  Existence.  —  There  is  no  provision  for  ex- 
tension of  corporate  existence. 

2G.  Foreign  Corporations.  —  Foreign  corporations  must  file  a  copy  of 
articles  of  incorporation  in  office  of  Secretary  of  State,  accompanied  by  a  sworn 
statement  of  an  officer  of  the  corporation  stating  the  proportion  of  capital  stock 
represented  in  the  State  of  Wisconsin  l)y  its  pro])erty  hjcated  and  business 
transacted  therein,  and  shall  pay  a  fee  of  $25  to  the  State  if  the  capital  stock 
so  represented  is  825,000  or  less,  and  an  additional  $1  for  each  additional 
thousand  dollars  of  capital  stock  (R.  S.,  sec.  1770  a  and  b,  as  amended;  Laws 
of  1001,  chaps.  351,  399,  and  434,  sec.  1). 

State  ex  rel.  Drake  «;.  Doyle,  40  Wis.  175 ;  Aslilaud  Lumber  Co.  v.  Detroit  Salt  Co., 
114  Wia.  66;  89  N.  W.  904. 


WYOMING. 

(The  references  below  are  to  the  Revised  StaliitcH  of  Wyoming,  IS'IH,  unless  otherwise  stated.) 

1.    Statutes  under  which  Business  Corporations  may  incorporate. — 

The  BusiiHss  Corporation  Act  i.i  found  in  R'vised  Statutes  of  Wyoming,  1S99, 
sees.  .'5029-3079,  325.')-:')270.  (See  also  Laws  of  19(H,  chap.  83.)  Under  it 
corporations  may  be  formed  for  carrying  on  any  kind  of  manufactining, 
mining,  chemical,  merchandising,  or  mechanical  business, constructing  wagon 


INCOKl'ORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

roads,  railroads,  U'lejjrapli  lines,  digging  ditches,  building  flumes,  mining 
tunnels,  dealing  in  real  estate  or  carrying  on  any  business  designed  to  aid  in 
the  industrial  or  produetive  interests  of  the  country. 

2.  lucorporators.  —  Three  or  more.  No  residential  recpireuieuts  (R.  S., 
sec.  3029). 

Durhulu-r  v.  Frazer,  8  Wy.  58  ;  55  Pae.  306. 

o.  Couteuts  of  the  Certificate  of  lucorporation.  'J'he  certificate  must 
set  forth : 

a.  Name.  —  (Similarity  of  names  not  expressly  forbidden  by  statute,  but 
Secretary  of  State  will  not  allow  the  use  of  any  name  already  adopted  by  an 
existing  domestic  corporation.) 

/*.  I'tirjHises.  —  Object  for  which  the  company  is  formed.  Under  the  Con- 
stitution (Art.  X.  sec.  6)  no  corporation  can  have  power  to  transact  more  than 
one  general  line  or  department  of  business,  which  shall  be  distinctly  specified 
in  its  charter  of  incorporation. 

c.  Capital  Slock.  —  Amount  thereof  (unlimited  by  law).  If  preferred  stock 
is  to  be  issued,  this  must  be  set  forth  (R.  S.,  sec.  3042). 

d.  Duration.  —  Term  of  existence  not  to  exceed  fifty  years. 

e.  Number  of  Shares.  —  Number  and  par  value  of  shares  (par  value  may  be 
any  amount). 

f.  Trustees.  —  Number  and  names  of  the  board  for  the  first  year. 

g.  Domiciliary  Office.  —  Name  of  the  town  and  county  in  which  the  opera- 
tions of  the  company  shall  be  carried  on.  More  than  one  locality  may  be 
named  if  desired.  If  it  is  to  transact  business  outside  of  the  State,  this  must 
also  be  set  forth  (R.  S.,  sees.  3029,  3033,  3034). 

h.  If  trustees  are  to  adopt  by-laws,  provision  therefor  must  be  made  in  the 
certificate. 

4.  Statutory  Powers.  —  In  addition  to  a  statutory  enumeration  of  the 
common  law  powers,  the  law  provides  for  the  following  additional  powers: 
To  hold  stock  in  such  other  corporations  as  are  subsidiary  to  and  contribute  to 
the  objects  and  purposes  of  the  corporation  ;  to  issue  preferred  stock;  to  pur- 
chase mines,  manufactories,  and  other  appropriate  property  in  exchange  for 
capital  stock ;  to  vote  by  proxy;  mining  companies  may  construct  and  oper- 
ate railways,  tramways,  and  wagon  roads  for  their  own  particular  purposes  ;  to 
transact  business  outeide  of  the  State  (R.  S.,  sees.  3032,  3034,  3035,  3040, 
3041,  30i(5,  305!),  3078,  3070). 

5.  Procuring  the  Charter.  —  The  incorporators  must  sign  and  acknowl- 
edge duplicate  certificates  of  incorporation  before  some  officer  competent  to 
take  acknowledgments.  One  of  these  must  be  filed  with  the  county  clerk  of 
each  county  wherein  the  business  of  the  corporation  is  to  be  carried  on.  The 
other  must  be  filed  in  the  office  of  the  Secretary  of  State,  to  whom  the  organ- 
ization tax  must  first  be  paid.  After  the  Secretary  of  State  has  filed  and  re- 
corded the  same  in  his  office,  corporate  existence  commences.  Within  ninety- 
days  after  filing  certificate  of  incorporation  with  Secretary  of  State  an  addi- 
tional certificate  must  be  filed  with  same  official  signed  by  the  i-)resident  or 
secretary  designating  the  location  of  the  domiciliary  office  and  the  name  of  the 
agent  in  charge  thereof  and  upon  whom  process  may  be  served  (R.  S.,  sec.  3029, 
3030,  3032;  Laws  of  1903,  chap.  53). 

6.  Corporate  Indebtedness.  —  The  indebtedness  shall  at  no  time  exceed 
amount  of  the  capital  stock  (R.  S.,  sec.  3049,  3053). 

7.  Organization    Tax.  —  Capital  stock  not  exceeding  $5,000,  $5 ;    over 

304 


SYNOPSIS-DIGEST   OF   L\CORPORATION   ACTS. 

$5,000  and  not  exceeding  ^100,000,  810  ;  over  $100,000,  |10,  and  5  cents  ad- 
ditional for  each  §1,000  in  excess  of  §100,000  (sec.  oU30). 

8.  Filing  and  Recording  Fees.  —  The  payment  of  the  organization  tax 
includes  filing  and  recording  fees  of  the  Secretary  of  State.  The  fee  for  re- 
cording in  local  county  office  approximates  §2.50.  For  filing  certificate  of 
agency.  S2.50.  (See  sec.  oOJl.)  To  Secretary  of  State  for  issuing  certified 
copy  of  articles  where  copy  is  furnished,  §1.     (See  Laws  of  1899,  chap.  69.) 

9.  Commencing  Business.  —  May  commence  business  as  soon  as  certifi- 
cate of  incorporation  is  filed  and  recorded  in  the  office  of  the  Secretary  of 
State  (R.  S.,  sec.  3032). 

10.  Organization  Meeting.  —  Should  be  held  within  the  State  (sees.  3035, 
3030). 

11.  Meetings  of  Stockholders  and  Directors.  — The  act  does  not  author- 
ize meetings  of  stockholders  to  be  held  without  the  State.  Directors'  meet- 
ings may  be  held  wherever  the  by-laws  prescribe  (R.  S.,  sees.  3035,  3036). 

12.  Trustees'  Qualifications  and  Liabilities,  a.  Qi^alijications.  —  There 
must  be  at  least  three  and  not  more  than  nine  trustees.  All  nnist  be  stock- 
holders.    There  are  no  residential  requirements  (R.  S.,  sec.  30o5). 

b.  Liabilities.  —  Trustees  are  personally  liable  for  payment  of  corporate 
debts,  where  they  participate  in  an  illegal  declaration  of  a  dividend,  or  in  the 
creation  of  corporate  indebtedness  in  excess  of  the  capital  stock  (R.  S.,  sees. 
3048,  3019). 

13.  Stockholders'  Liabilities.  —  Stockholders  are  only  liable  to  creditors 
for  their  unpaid  stock  subscriptions  (R.  S  ,  sec.  3045). 

14r.  Stock  Certificates.  —  Must  be  signed  by  such  officers  as  the  by-laws 
prescribe. 

15.  Preferred  Stock.  —  May  be  provided  for  in  the  certificate  of  incorpo- 
ration, or  may  be  issued  thereafter  by  the  unanimous  consent  of  all  the  stock- 
holders (R.  S.,  sees.  3041,  3042). 

16.  Payment  of  Capital  Stock.  —  Capital  stock  may  be  issued  in  ex- 
change for  mines,  manufactories,  and  other  necessary  property  to  the  amount 
of  the  value  thereof.  The  act  specifically  provides  that  stock  so  issued  shall 
be  taken  to  be  full  stock,  and  the  holders  thereof  shall  not  be  liable  thereon 
either  to  the  corporation  or  to  cieditors  (R.  S.,  sec.  301G).  \\'ithin  thirty  days 
after  the  payment  of  the  last  instalment  of  capital  stock  the  president  and 
a  majority  of  the  trustees  must  make  record  in  tiie  office  of  the  register  of 
deeds  of  the  county  where  the  principal  business  is  carried  on,  a  certificate 
stating  the  amount  of  the  capital  so  fixed  and  paid  in  (R.  S.,  sec.  :')()17). 

17.  Books.  — 'J'hcre  is  no  provision  as  to  what  books  must  be  kept  other 
than  the  stock  book  (R.  S.,  .sec.  305.')).  Fifteen  per  cent  of  the  stockholders 
may  demand  a  statement  of  the  company's  affairs  from  the  treasurer  ( R.  S., 
sec.  -3057). 

is.  OCBce.  —  The  corporation  must  maintain  an  office  within  the  state 
(R.  S.,  si-oH.  3029,  3033,  3034). 

19.  Reports.  —  There  are  no  aimual  reports  to  be  made.  Statement  of 
conditions  of  corporate  affair.s  innsi  be;  published  by  treasurer  on  written  re- 
quest of  fifteen  per  cent  of  stockholders  (R.  S.,  sec.  3057). 

20.  Anti  Trust  Statute.  —  There  is  no  anti-tru.st  statute  in  force  in 
Wyoming.  'I'h''  constitution  however  (Art.  X.  sec.  -S)  forbids  consolidation 
or  combination  to  prevent  rom|it'lition,  etc. 

21.  Statutory  Grounds  for  Forfeiture  of  Charter.  —  Tin-  charter  may 
be  forfeited  for  non-user  ami  misuser  of  its  corporate  fnuicliises  and  privileges 


INCORPORATION   AND  ORGANIZATION   OP  CORPORATIONS. 

(R.  S.,  soc.  4214).     Also  for  failing  to  file  certificate  of  agent  and  place  of 
biksiuess  (Laws  of  11)03,  chap.  5;}). 

'2'2.   Amendments. —  The   charter  may  be  amended  by  complying  with 
•the  provisions  of  the  act  in  that  respect  as  follows  :    Change  of  name,  change 
in  number  of  trustees,  increase  or  decrease  of  capital  stock;    to  extend  or 
change  the  corporate  business  (R.  S.,  sees.  302i),  3U53-305G). 

23.  Annual  License  Tax.  —  There  is  no  annual  license  tax, 

24.  Extension  of  Corporate  Existence.  —  No  provisions  for  this  in  the 
act. 

25.  Dissolution.  —  By  a  termination  of  its  period  of  existence  ;  and  vol- 
untarily by  a  two-thirds  vote  of  the  stockholders,  whereupon  the  trustees 
become  trustees  for  the  creditors  and  stockholders  (R.  S.,  sees.  3255-3204 
inclusive). 

lutcr.  Trust  Co.  v.  Compauy,  3  Wy.  803 ;  31  Pac.  408. 

26.  Foreign  Corporations. — Must  file  with  the  Secretary  of  State  and 
register  of  deeds  copy  of  charter,  or,  if  incorporated  under  general  law,  copy 
of  certificate  of  incorporation  and  of  such  incorporation  law,  and  appointment 
of  agent  upon  whom  service  of  process  may  be  made.  They  must  pay  same 
tax  for  filing  certificate  as  is  required  of  domestic  corporations.  No  annual 
license  fee  and  no  reports  to  make  (R.  S.,  sees.  3265-3270  inclusive).  They 
must  also  accept  the  provisions  of  the  Wyoming  Constitution  (R.  S.,  sec.  3058  ; 
see  also  Laws  of  1901,  chap.  83). 


SUPPLEMENT  TO   PART   II. 

DOMINION    OF    CANADA. 

1.  Capital  Stock — Maybe  any  amount.  Par  value  of  shares  maybe 
any  amount. 

2.  Duration.  —  Charters  are  all  of  perpetual  duration. 

3.  Application  for  Charter  Patent.  —  Must  set  forth:  Corporate  name; 
purposes  ;  location  of  business  in  Canada  ;  amount  of  capital  stock  ;  number 
of  shares  and  par  value  of  each  ;  name,  address,  and  business  of  each  incor- 
porator; names  of  provisional  directors  from  among  the  incorporators; 
amount  of  subscriptions  and  amount  paid  thereon  by  each  incorporator,  how 
paid,  and  how  held  for  the  company. 

4.  Commencing  Business.  —  A  notice  giving  short  particulars  of  the 
company  must  first  be  published  in  the  Canada  Gazette.  The  application  for 
letters  patent  may  be  presented  one  month  after  expiration  of  such  notice, 
and  must  be  signed  by  at  least  five  persons  and  filed  with  the  Secretary  of 
State,  who  must  i.ssue  letters  patent  to  the  company  before  it  can  commence 
business.  Application  is  accompanied  by  an  agreement  in  duplicate  under 
seal,  between  the  incorporators,  giving  name  of  company,  capital  stock,  shares 
and  value  of  eacli,  and  covenanting  to  subscribe  and  take  the  respective 
amount  of  stock  set  opposite  their  names.  No  definite  amount  need  be  sub- 
.scribed  or  paid  in  before  obtaining  charter.  Before  commencing  business  ten 
per  cent  of  the  authorized  capital  stock  must  be  subscribed  and  paid  in. 
Notice  of  granting  charter  is  published  twice  in  the  Gazette. 

5.  Payment  of  Subscription.  —  May  be  made  in  money  or  property. 

3UG 


SYNOPSIS-DIGEST    OF   INCORPORATION    ACTS. 

6.  Cost  of  Iiicorporatiug.  —  Organization  fees  are  :  For  capitalization 
less  than  ^20,000,  §50 ;  over  that  and  less  than  $50,000,8150;  to  less  than 
SIOO.OOO,  $200;  to  less  than  $150,000,  $225;  to  less  than  S200,000,  $250;  to 
less  than  $:500,000,  S300;  to  less  than  S400,000,  $325;  to  less  than  $500,000, 
$350  ;  to  less  than  $600,000,  $375 ;  to  less  than  $700,000,  S400 ;  to  less  than 
$800,000,  S 425;  to  less  than  $900,000,  $150;  to  less  than  $1,000,000,  $475 ; 
when  $1,000,000,  $500;  for  every  additional  million  dollars  or  part  thereof, 
$100.  For  increase  of  capitalization,  fee  is  as  above,  but  on  increase  only. 
Publication  of  notice,  $S  to  $10. 

7.  Annual  License  Fee.  —  There  are  no  annual  license  fees  exacted  by 
the  Dominion  (iovernment. 

8.  Amendments.  —  Amendments  to  charters  can  be  obtained  by  supple- 
mentary letters  patent  on  petition  to  the  Secretary  of  State  -when  authorized 
by  a  resolution  of  two-thirds  of  the  subscribed  stock. 

0.  Incorporators.  —  Must  be  at  least  five,  with  no  restrictions  as  to  sex, 
nationality,  or  residence. 

10.  Directors.  —  Must  be  not  less  than  three  and  not  more  than  fifteen. 
They  must  be  stockholders.     No  restrictions  as  to  residence. 

11.  Meetings.  —  Stockholders'  meetings  must  be  held  within  the  Domin- 
ion, but  directors'  meetings  need  not  be. 

12.  Books.  —  The  books  of  the  company  must  be  kept  at  the  head  office. 

13.  Reports.  —  Upon  the  written  request  of  Secretary  of  State,  a  return 
must  be  made  to  him  of  amount  of  capital  of  the  company;  number  of  shares 
taken  from  the  commencement  of  the  company;  amount  of  calls  made; 
amount  of  calls  received;  amount  of  calls  unpaid;  amount  of  shares  for- 
feited; names,  addresses,  and  occupations  of  jiersons  who  have  ceased  to  be 
members  within  the  preceding  twelve  months,  and  number  of  shares  held  by 
each. 

14.  Office  and  Agent. —  Must  have  designated  office  in  the  Dominion  of 
Canada.     It  may  have  a  branch  office  located  outside  of  the  Dominion. 

15.  Liabilities.  —  Stockholders  are  liable  only  for  the  unpaid  balance  of 
their  shares. 

10.  Dissolution.  —  The  company  may  di.ssolve  by  a  resolution  of  the 
shareholders  passed  at  a  special  meeting. 

17.  Foreign  Corporations.  —  Are  governed  by  the  Dominion  and  the 
respective  Provincial  laws. 


MANITOBA. 

Under  the  laws  of  the  Province  of  Manitoba,  the  roqnironients  in  connec- 
tion with  incorporation  and  manag<;nient  are,  succinctly  stated,  substantially 
as  follows: 

A  petition,  signed  and  acknowledged  by  at  least  three  applicants,  must  bo 
made  to  the  Lieutenant-(Jovernor  through  the  Provincial  Secretary,  showing: 
Corporate  name;  objects;  place  or  places  in  Manitoba  where  business  is  to 
be  carried  on,  specially  mentioning  one  of  such  jtlaces  as  the  chief  place  of 
business;  amount  of  capital  stock;  number  of  shares  and  amount  of  oacli  ; 
names  with  address  and  calling  of  each  aiiplicant.  with  special  mention  of 
names  of  not  le.ss  than  three  nor  more  than  nine  of  them  who  will  be  first 
directors;  amount  of  stock  taken  by  eaeh  applicant,  ami  amount  paid  in 
thereon,  and  whether  paid  in  cash  or  property,  or  how  otherwise.     No  adver- 

897 


IXrOUPOIlATION    AND    ORGANIZATION  OF    CORPORATIONS. 

tisoment  of  intention  to  incorporate  is  necessary.  Tlie  fees  for  incorporalinp, 
paiil  to  tlie  cjovernnient,  range  from  ijl")  where  capitalization  does  not  exceed 
jri.OOO.  to  §200  for  one  million  capitalization;  all  over  that,  $250.  No  pay- 
ment on  stock  is  necessary  at  time  of  incorporating.  Stock  may  be  paid  for 
in  money  or  property.  The  directory  is  com[)osed  of  at  least  three  and  not 
over  nine  members.  Shareholders  may  be  residents  in  or  citizens  or  subjects 
of  any  country  or  State.  Before  commencing  business  ten  per  cent  of  the 
capital  stock  must  be  subscribed  and  ten  per  cent  of  subscrijjtions  paid  up. 
Xo  residential  requirements  as  to  incorporators,  directors,  or  stockholders. 

Foreign  Corporations.  —  Must  take  out  a  license  to  do  business  in  the 
Province,  by  tiling  a  petition,  with  certified  copy  of  the  act  of  incorporation  ; 
a  copy  of  the  last  financial  statement  of  the  company's  proper  officer ;  an 
atlidavit  verifying  that  the  company  is  entitled  to  do  business  ;  and  an  attorney 
resident  in  the  province  must  be  appointed  to  represent  the  company  in  all 
suits  and  actions.  A  fee  of  $150  must  be  paid  to  the  government,  regardless 
of  amount  of  capitalization.  There  are  also  fees  to  be  paid  under  the  Cor- 
poration Taxation  Act,  according  to  the  character  and  the  amount  of  its 
capital  stock. 


HAWAII. 

1.  Capital  Stock.  —  Maybe  any  amount.  Par  value  of  shares  may  be 
any  amount  (C.  L.,  sees.  2031,  2032). 

2.  Duration.  —  Any  period  not  exceeding  fifty  years  (C.  L.,  sec.  2035). 

3.  Articles  of  Incorporation.  —  For  joint-stock  companies,  must  show  : 
Name,  to  be  followed  by  word  "  Limited  ";  place  of  principal  office ;  purposes; 
amount  of  capital  stock,  and  if  privilege  of  subsequent  extension  of  capital 
stock  is  asked  for,  the  limit  of  such  extension;  number  and  designation  of 
officers  proposed.  Articles  must  be  signed  and  acknowledged  by  incorpora- 
tors, and  recorded  in  office  of  Secretary  of  Territory.  An  affidavit  sworn  to  by 
president,  secretary,  and  treasurer,  showing  number  of  shares,  amount  of 
capital  stock,  names  of  subscribers  for  shares  and  amount  paid  in,  must  be 
filed  with  Territorial  Secretary ;  and  when  object  of  the  corporation  is  to  take 
over  and  conduct  any  existing  business  or  enterprise,  etc.,  the  affidavit  must 
describe  property  representing  capital  stock  of  company,  a  valuation  of  each 
item  thereof,  and  copy  of  conveyance  to  be  made  by  owner  to  the  proposed 
corporation  (C.  L.,  sees.  2031-2034). 

4.  Amendments.  —  Charters  may  be  amended,  but  not  beyond  powers 
contained  in  original  charter  (C.  L.,  sec.  2043).  They  should  be  approved 
by  all  stockholders  unless  the  by-laws  otherwise  provide  (7  Haw.  Rep.  779). 

5.  Incorporators.  —  Any  number  not  less  than  five  (C.  L.,  sec.  2031). 

6.  Meetings.  —  May  be  held  at  place  or  places  designated  in  the  by-laws 
(2  Haw.  Itep.  22). 

7.  Directors.  —  As  provided  in  the  by-laws.  The  statute  does  not  seem 
to  specify  as  to  the  number. 

8.  Books  and  Records.  —  Original  articles  shall  during  business  hours 
be  open  to  inspection  of  public  in  office  of  Territorial  Secretary  (C.  L.,  sec. 
2033).  Territorial  Secretary  may  call  for  and  examine  corporate  books  and 
papers  (.\ct  of  June  29,  1898.  sec.  4). 

9.  OCBce  and  Agent.  — The  company  must  maintain  an  office  within  the 
Territorv  (C.  L.,  sec.  2032). 

'398 


SYNOPSIS-DIGEST    OF   INXORPORATION    ACTS 

10.  Liabilities.  —  Stockholders  are  liable  only  to  extent  of  amount  unpaid 
on  stock  (C.  L.,  sec.  2018). 

11.  Reports.  — The  corporation  shall  annually,  on  July  1st,  present  to 
Territorial  Secretary  an  exhibit  of  its  affairs  (C.  L.,  sec.  2021.) 

12.  Dissolution.  —  Three-fourths  of  stockholders,  at  a  meeting  called  for 
the  purpose,  may  petition  for  dissolution  of  corporation  by  Territorial  Secre- 
tary (C.  L.,  sec.  2022). 

13.  Foreign  Corporations.  —  In  order  to  do  business  or  hold  realty  in 
Hawaii,  corporation  shall  file  witli  Territorial  Secretary  certified  copy  of  char- 
ter or  act  of  incorporation,  and  certificate  stating  names  of  its  officers,  and 
name  of  person  upon  whom  legal  notices  and  process  may  be  served;  also 
certified  copy  of  by-laws  ;  and  shall  pay  a  fee  of  $50  to  Territorial  Secretary 
(Act  of  June  12,  1898,  sees.  1,  2). 


PHILIPPINES. 

The  Philippine  Civil  Commission  has  now  under  advisement  and  prepara- 
tion a  local  corporation  law  which  will  probably  be  enacted  early  in  1905. 
For  a  foreign  corporation  to  do  business  in  the  Philippines  it  is  necessary  to 
comply  with  the  provisions  of  the  Code  of  Commerce  (Arts.  XV.,  XVII., 
XXI.).  The  requirements  stated  therein,  so  far  as  they  relate  to  obtaining  a 
permit  by  foreign  corporations  to  do  business  in  tlie  Philippine  Islands,  are  as 
follows : 

(1)  The  corporation  must  be  a  commercial  association  within  the  meaning 
of  the  Code  of  Commerce  of  the  Pliilippine  Islands,  and  as  such  be  subject  to 
its  provisions. 

(2)  That  by  reason  of  its  domicile  in  the  United  States  it  stands  in  the 
same  relation  to  the  laws  of  the.se  islands  as  did  Spain  before  their  cession. 
(See  also  Art.  XV.  of  the  Code  of  Commerce.)  Art  XXI.  of  the  Code  of 
Commerce  provides  what  foreign  corporations  must  do  who  desire  to  estab- 
lish themselves  or  create  business  in  the  Philippine  Islands.  Art.  XVII.  of 
Code  of  Commerce  provides  how  they  shall  lie  registered. 

It  is  necessary  to  have  a  Spanish  consular  certificatefor  their  establishment 
and  authorization. 

The  Register,  known  as  the  Commercial  Register,  at  Manila,  consists  of 
two  independent  books  of  record  in  which  are  recorded  private  merchants  and 
associations. 

Art.  XXI.  of  Code  of  Commerce  provides  that  "  On  the  sheet  of  the  record 
of  each  merchant  there  shall  be  entered  : 

"  1.  Name,  firm  name  or  title. 

"  2.  The  kind  of  commerce  or  transaction  engaged  in. 

"  3.  The  date  on  which  busine.ss  is  to  begin  or  was  begun. 

"4.  The  domicile,  with  a  statement  of  the  branches  wiiicli  may  have 
been  e.stablislied. 

"5.  The  articli's  cotistitutiug  a  commcicial  association,  whatsoever  may 
be  its  object  or  appellation,  as  well  as  tlie  instniment.s  modifving,  rescinding, 
or  dissolving  tiie  said  association," 

In  the  case  of  foreign  corporations  domiciled  in  countries  not  using  tlio 
notarial  system,  the  necessary  i)aper8  to  be  availal>le  here  must  be  executeil 
and  authenticated  according  to  the  prfjvisions  of  the  insular  laws,  and  tln'y 
will  not  be  recognized  here  unless  in  strict  compliance  with  such  laws. 

399 


INCOnPORATlON    AND    OUCAMZATION    OF    CORPORATIONS. 

For  tlic  roijistralion  of  a  compauj^  organized  in  tlie  Unitofl  States  to  do 
business  here  tliere  would  be  required: 

(I)  Tlie  several  acts  of  the  legislature  which  constitute  the  cliarter,  each 
of  w  hieh  must  have  attached  the  ordinary  certificate  of  the  Secretary  of  State 
under  his  olReial  seal. 

(II)  The  evidence  of  the  organization  of  tlie  company  under  its  charter, 
the  best  attainable,  such  as  would  be  necessary  to  prove  the  facts  in  the  State 
courts.  The  best  evidence  would  probably  be  the  documents  showing  the 
opening  of  books  for  subscription,  the  names  of  subscribers  and  the  proceed- 
ings thereat,  the  issue  of  shares,  the  filing  of  certificate  of  amount  paid  up,  and 
all  the  formal  papers  and  proceedings  required  in  organizing  under  the  charter 
and  under  the  provisions  of  the  corporation  and  laws  applicable  under  the 
terms  of  the  charter. 

Before  the  cession  of  these  islands  this  certificate,  for  use  in  Spanish  colo- 
nies, to  register  a  corporation  domiciled  in  Spain,  was  given  by  a  Spanish 
minister.  By  analogy,  this  now  being  a  United  States  colony,  the  certificate 
would  be  given  by  the  similar  Member  of  Cabinet  of  the  United  States,  but 
owing  to  the  difference  of  political  organization,  that  officer  is  not  vested  with 
power  in  such  cases. 

So  far  as  we  have  been  able  to  ascertain  no  provision  has  been  made  for 
the  substitution  of  any  authority  in  the  United  States  to  supply  this  certificate, 
and  that  is  the  reason  why  the  documents  and  facts  showing  the  establish- 
ment and  authorization  should  be  set  out  in  such  manner  as  to  enable  some 
proper  officer  in  the  domiciliary  State  to  make  the  certificate  which  in  such 
case  the  Secretary  of  War  could  authenticate  as  entitled  to  full  faith  and 
credit. 

(III)  The  by-laws  of  the  company  and  all  changes  therein. 

(IV)  All  additional  issues  of  stock,  and  all  the  matters  embraced  within 
Art.  XXI.  prescribing  what  is  necessary  to  be  recorded.  (See  also  Code  of 
Civil  Procedure,  sees.  299,  301,  303,  313.) 

In  addition  to  this  a  power  of  attorney  conferring  upon  a  resident  agent 
such  power  as  is  desired,  is  necessary.  It  must  be  in  Spanish  and  carefully 
drawn  and  authenticated,  and  it  must  expressly  confer  power  to  register  the 
company  in  tlie  Commercial  Register  at  Manila.  The  power  must  contain  or 
have  annexed  thereto  by  the  notary  the  resolution  of  the  board  of  directors 
authorizing  the  execution  of  the  power  by  the  officers  appearing  before  the 
notary  for  that  purpose. 

All  documents  must  be  translated  from  English  into  Spanish  before  they 
can  be  registered,  and  the  cost  is  $1,  United  States  currency,  per  page  for 
translation.     The  registry  fees  are  nominal. 


PORTO    RICO. 

1.  Capital  Stock. —  May  be  any  amount  not  less  than  S2,000 

2.  Duration.  —  Any  number  of  years. 

3.  Certificate  of  Incorporation.  —  Must  state:  Name;  location  of  prin- 
cipal office  in  Porto  Rico;  purposes;  amount  of  capital  stock;  nunber  of 
shares,  and  par  value  of  each  ;  amount  of  paid  in  capital  (not  less  than  i?l,000), 
with  which  it  will  commence  business  ;  names  and  addre.'-ses  of  incorporators; 
number  of  shares  subscribed  by  and  amount  paid  in  by  each.     Articles  must 

400 


SYNOPSIS-DIGEST    OF   INCORPORATION   ACTS. 

be   signed  and   acknowledged   by  the  incorporators,  and   filed   in   ofl&ce  of 
Secretary  of  Porto  Rico. 

4.  Commencing  Business.  —  At  least  $1,000  of  capital  stock  must  be 
paid  in  before  coniraencing  business. 

5.  Cost  of  Incorporating.  —  Simply  the  legal  fees  to  Secretary  of  the  Ter- 
ritory for  filing  and  recording  articles  and  issuing  certificate  of  incorporation, 

6.  Annual  License  Fee.  —  There  is  none. 

7.  Amendments.  —  Articles  may  be  amended  in  all  respects,  upon  reso- 
lution of  board  of  directors,  and  vote  of  two-thirds  of  the  stock. 

8.  Incorporators.  —  Must  be  three  or  more  persons  of  lawful  age.  No 
residential  requirements. 

9.  Directors.  —  Must  be  at  least  three,  one  of  whom  must  reside  in 
Porto  Rico. 

10.  Meetings.  —  iMust  be  held  at  the  principal  office  in  Porto  Rico. 

11.  Reports.  —  No  reports  are  required  to  be  made. 

12.  Books.  —  Stock  and  transfer  books,  open  to  inspection  of  shareholders 
and  others  interested,  must  be  kept  at  the  principal  office;  and  ten  days  before 
election  of  directors  or  officers  a  list  of  stockholders  entitled  to  vote  must  be 
made  and  be  open  to  inspection  of  stockholders. 

13.  OSEce  and  Agent.  —  A  principal  office  must  be  maintained  in  Porto 
Rico,  with  an  agent  in  charge. 

14.  Liabilities Stockholders   are  liable   only  for   amount   unpaid   on 

stock. 

15.  Dissolution.  —  Voluntary  dissolution  may  be  had  by  resolution  of  the 
directors,  and  by  written  consent  of  two-thirds  in  interest  of  stockholders. 

IG.  Foreign  Corporations.  —  There  seems  to  be  no  law  pertaining  to 
Porto  Rico  regulating  foreign  corporations. 


2»  401 


PART    III. 
FORMS  AND  PRECEDENTS. 


SPECIFIC  OBJECT  CLAUSES. 


Form  I 

Accountants 1 

Acquisition  of  Existing  Busi- 
ness    2 

Advertising 3 

Ag^ricultural  Implements  ...  4 

Air  Brakes 5 

Motors    G 

Power 7 

Aluminum  Goods 8 

Ammonia 9 

Ammunition    1" 

Amusement  Company 11 

Aug  jra  Goats     1- 

Aniin  il  Fanciers 13 

Apartment  Houses 14 

Architects 1"< 

Asphalt IC 

Auditors.     See  Form  1. 

Automobiles    17 

Bakery IS 

Baking  Powder 10 

Ballot  Boxes 20 

Banking    and     Trust    Com-  I 

panies 21 

Birrel  Manufacture    22 

Bicycles    23 

Bi-icuit  Company 24 

Books 2.5 1 

Boots  and  Slioes "20 

Braudie.s 27 

Breeders 2S 

Brewery    20 

Brick 30 

Bridge  Builders 31 

Bronze 'i- 

Bruoms 33 

Bruihes 34 

Building  Contractors .'*•"> 

Butchers 3i; 

B'.ittons    37 

Car  Builders .'V* 

Carbon  Engines .30 

Ca«h  RegiMlers 4<l 

Cattle 41 

Cements 42 

Cereals 43 

Chemicals +* 

Cigirs 4-''' 

Clothing  Manufacturers    .  .  .  4<'i 

Coal  . 47 

Coal  Briquetto 4» 

Coal     Transportation    Com- 
pany     40 

Coffee r.<i 

Cold  Storage •II 

Colonization  Company    ....  52 


I N  D  E  X. 

Form  I 

Commercial  Company 53 

Commission  Merchants  ....  54 

Confectionery    55 

Construction  Company  ....  5(> 

Contractors  and  BuUders  ...  57 

Cordage 5S 

Cotton 50 

Cotton  Brokers    tiO 

Oil 01 

Plantations,  etc (J'J 

Cutlery C>3 

Dairy  Products    (H 

Decorating    C5 

Department  Stores C(i 

DistUlers (>7 

Dock  Company GS 

Dredging GO 

Drilling 70 

Drugs 71 

Dry  Goods 72 

ElectricalBusiness  —  General  73 

Generating  Machinery   .  74 

Lighting 7.'. 

Electrical  Machinery 7G 

Vehicles    77 

Elevators  (Grain) 78 

Machinery 70 

Passenger    80 

Enamel  and  Stamped  Ware    .  81 
Engineering     and     Dredging 

Company 82 

Explosives 83 

Express 84 

Extracting  Company 85 

Fancy  Ol.iss 8(i 

Farm  Products  -Dairy  ....  87 

F  irm  Products  etc 8K 

FircprooMng     8'.l 

Fisheries '•••• 

Flour 01 

Fr.od  l'ro<Iuct» 0-2 

Foreign     Commercial    Com- 

I)!uiy    03 

Fniifht  Agents 0» 

Fruit  Company     05 

PlniitntioiiH     !)G 

Fui-1-Having  Machines '••7 

Furniture    OH 

Garbage  Machinery '.>!> 

Gas. 1<H» 

Gas  Engines,  Bumem,  etc.   .  to| 

Ginneries 1«2 

01-mn 103 

Gold  and  Silver  Ware KM 

Graphite 105 

Hardware    lOG 


Form 

Hotel  Company    107 

Ice 108 

Inspection  of  Elevators  ....  100 

Insurance 110 

Investment Ill 

lion  and  Steel 113 

Lamps 113 

Laud  and  Development  Com- 
pany  114 

Laundry 115 

Lead  Company llfi 

Leather 117 

Light  and  Heat 118 

Locomobiles 119 

Lumber  and  Nursery 1'20 

Machinery 121 

Magazines 122 

Manufacturing 123 

Manganese 124 

Matches 125 

Mechanical  Engineers \'M 

Medical  College 127 

Medical  Institute 128 

Mercantile  Agency 129 

Mica 130 

Mining  (Limited  Powers)  .  .  .   131 

Full  Powers 132 

(Investments) 133 

Rights 134 

Mortgage  and  Trust 135 

Motor  Cars 130 

Companies 137 

Musical  Instruments 138 

Newspapers 130 

Nickel 140 

Novelties 141 

Oil  and  Petroleum 142 

Oil  and  Pipe  Line  Company  .  143 

Paints 144 

PaiM-r 145 

PuHHengorand  Baggage  Trans- 
fer . 140 

Pat<>nt  Medicines 1-17 

I'atents US 

PhonogrniiliH 140 

Photograiihy 15(1 

Pianos 151 

Pipe  fi'ounilry 152 

Plantation  Company 15:1 

Plunilters'  Supplies 154 

Pottery 155 

Poultry ]5<i 

Publishers 157 

Ouarry 158 

Railway  F,(|uipment 15!) 

Real  E8Ut«(Citv) ICO 

403 


INCOrvrORATIOX    AND    OUGANIZATION    OF   CORPORATIONS. 


Realty 

Rt'iluotion  Comjwuiy 

Kotinerios 

R(>8tauraiits 

Rubber  Coiui>aiiv   .  . 

Suit ."  .  .  . 

Siuiitnriiims 

S:MU-e.s  ami  Piekles  . 

Snw-Mills 

Sealiiitr 

Si'paratora 

Sewing  Muehiiies   .  . 

Sheep  

Ship  BuiUliug   .  .    .  . 

Silk 

Slate  aiul  Tile  .  .  .  . 
Sliuiflitei-Houses  .  . 
Slot  Miichines    .  .  .  . 

Soap 

Statiouary  Eugiues  . 


l(;i 
KVJ 

ica 
i(;4 
icr. 
Kit; 
It;: 

KkS 

u;;! 

1711 
171 
17l' 

17:! 
171 


Form 

Stationers ISl 

Steanilio.it.s    182 

Steel  Lath  ami  FireprootinK 

l\mipany    IS;! 

Steel  Manufacture    1,S4 

Stereopticon  Machines    ....  lt<;"> 

Steveiloreti     l.SC 

Stock  lJroker.s 1,S7 

Storajje  IJatterics 1,SS 

Su^rar  Refineries IW) 

Suii;ical  Instruments    I'.MI 

Tailors I'.tl 

Tanneries    I'.I'J 

Tar  Manufacturing 11)3 

Telegraph     and      Telephone 

Companies I'.M 

Theatres I'.C 

Thread I'.M; 

Tobacco 197 

Trading-Stamp  Company  .  .  .  li)8 


Fonn 

Train  Control     I'J'J 

Transportation  Company  .     .  '200 
Troiiical  Trailing  Company    .  '201 

Trust  Company 'M'i 

Turbine  l''.ugines '203 

Typesetting  Machines '204 

Typewriters '205 

Valve  Company '20G 

Varnish  Removers '207 

Warehousers '208 

WattOies  and  Diamonds  ....  '20D 
Water,     Light,     Power,   and 

Traction  Company 210 

Water  Heaters '211 

WaU'r  Works     21'2 

Wfi^jliing  Machines '213 

Wliarf  and  Warehouse    ....  '214 

Woollen  and  Worsted 215 

Yam  Mill 216 


FORM  I.  —  ACCOUNTANTS. 

To  open,  take  charge  of,  examine,  inspect,  and  autlit  books  of  account;  to  cer- 
tify to  tlie  results  of  sucli  cxaniinatioii,  inspection,  and  audit,  and  to  guanmty  the 
correctness  of  the  same.  To  furnish  facihties  to  individuals,  finus,  and  corporations 
for  opening  sets  of  books  of  account  and  for  auditing  and  balancing  the  same.  (See 
p.  550.) 

FORM  2.  —  ACQUISITION  OF  EXISTING  BUSINESS. 

To  purchase,  acquire,  and  take  over  the  business  and  property,  both  real  and 
personal,  name  and  assets  of  every  nature  and  description  of  the  business  now  being 
carried  ou  by  iu  the  city  of  State  of 

FORM  3.  — ADVERTISING. 

To  carry  on  a  general  advertising  business  in  all  its  various  branches ;  to  solicit 
and  contract  for  and  give  publicity  to  all  kinds  of  advertising;  to  prepare,  niauu- 
facture,  construct,  and  arrange  for  advertising  devices,  advertisements,  and  novelties. 
To  erect,  construct,  purchase,  lease,  or  otherwise  acquire  fences,  bill-boards,  sign- 
boards, buildings,  and  other  structures  suitable  for  advertising  purposes.  To  do 
a  general  bill-posting,  sign-tackiug,  circularizing,  and  distributing  business  of  every 
kind  appertaining  to  any  and  all  kinds  of  advertising. 

FORM  4.— AGRICULTURAL  IMPLEMENTS. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  agricultural  imple- 
ments ;  to  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  harvesters, 
binders,  reapers,  mowers,  harrows,  hay  racks,  headers  and  shredders,  cutters,  bind- 
ing machines,  threshers,  drillers,  seeders,  and  agricultural  tools  and  implements  of 
all  kinds,  and  such  other  goods,  wares,  and  mercliandise  as  are  usually  manufactured 
or  sold,  exported  or  imported,  and  dealt  in  by  manufacturers  and  dealers  in  a  similar 
line  of  business. 

FORM  5. -AIR  BRAKES. 

To  carry  on  the  busiuess  of  manufacturers  and  dealers  in  air  or  pnenmalic 
brakes  and  braking  devices  and  appliances  of  every  description ;  to  manufacture, 
buy,  sell,  export,  import,  and  gentn-ally  deal  in  air  or  pneumatic  braking  devices 
and  appliances,  car  tracks,  railway  ap[)liances  and  supplies,  machinery  and  appli- 
ances of  every  description.  Also,  to  manufacture,  buy,  sell,  export,  import,  and 
generally  deal  iu  compressed  air  maeliinery  and  parts,  and  to  acquire  by  purchase  or 
otherwise  inventions,  patents,  licenses,  and  patent  rights,  and  sneh  brakes,  braking 
devices,  railway  machinery  and  appliances  and  com])ressed  air  machinery  and  ap- 
p-iratus  as  may  be  manufactured,  bought,  sold,  imported,  exported,  and  dealt  in  by 
manufacturers  and  dealers  in  a  similar  line  of  business. 

404 


FORMS   AND   PRPXEDENTS. 


FORM  6.— AIR  MOTORS. 


To  manufacture,  construct,  purchase,  or  otherwise  acquire,  deal  in,  sell,  hire, 
lease,  use,  repair,  operate,  and  maintain  uiachinery,  engines,  compressors,  or  uiotors, 
tools,  devices  operated  by  compressed  air  or  other  expansible  fluids,  apparatus  and 
appliances  of  any  and  every  character. 

FORM  7.— AIR  POWER. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  air  compressors, 
machinery  aud  aj)paratus  useful  or  convenient  for  use  in  connection  with  the  afore- 
said business  or  any  part  thereof;  to  purchase  or  otherwise  acquire,  sell,  lease,  ex- 
port, or  import  machinery,  engines,  trucks,  aud  cars  suitable  for  use  in  connection 
with  the  aforesaid  line  of  business  or  auy  part  thereof. 

FORM  8.  — ALUMINUM  GOODS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  aluminum  goods, 
and  such  other  goods,  wares,  and  mercliundise  as  are  usually  manufactured,  bought, 
sold,  ex[)orted,  or  iuiported  aud  dealt  in  by  manufacturers  and  dealers  in  a  similar 
line  of  business.  To  carry  on  the  business  of  mining,  milling,  concentrating,  con- 
verting, smelting,  treating,  pre[)aring  for  market,  manufacturing,  buying,  selling, 
aud  otherwise  producing  and  dealing  in  aluminum  aud  other  products. 

FORM  9.  — AMMONIA. 

To  prepare,  distil,  manufacture,  buy,  sell,  and  generally  deal  in  ammonia  aud 
such  other  products  as  are  usually  distilled,  manufactured,  bought,  sold,  and  dealt 
in  by  manufacturers  and  dealers  in  a  similar  line  of  business. 

FORM   10.  — AMMUNITION. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  gunpowder, 
shot,  bullets,  cartridges,  shells,  explosives,  and  such  other  goods,  wares,  aud  mer- 
chandise as  are  usually  manufactured,  bought,  sold,  exported,  imported,  and  dealt  iu 
by  dealers  iu  a  similar  line  of  business. 

FORM  11. —  AMUSEMENT  COMPANY. 

To  build,  buy,  lease,  or  otherwise  acquire,  own,  operate,  and  maintain  merry-go- 
rounds,  loop-the-loops,  gravity  and  pleasure  railways,  aerial  coasting  swings,  Ferris 
"Wheels,  and  all  other  devices  of  a  like  nature  calculated  to  olfer  amusement  to  the 
public  and  [)rolit  to  the  company.  Also  to  mnnufaeturc,  locate,  buy,  lease,  or  other- 
wise acquire,  sell,  and  deal  iu  scenery,  stage  appliances,  tliealre  ajipliauees,  and  other 
articles  suitable  for  use  on  stage  or  in  amusement  enterprises,  theatres,  or  other  pub- 
lic places.  Also  to  purchase,  own,  lease,  or  otherwise  acquire,  license,  or  sell  plays, 
operas,  songs,  musical  or  dramatic  manuscripts  or  copyrights  whatsoever  whieli  may 
be  used  as  a  basis  for  the  amusement  or  entertainment  of  persons  in  pul)Iic  or 

Crivate  places.  To  carry  on  the  business  of,  and  to  do  any  an<l  all  things  that  may 
e  ordinarily  conducted  by  dramatic  and  operatic  agents  and  managers  of  amuse- 
ment enterprises  of  any  kind,  including  the  manufacture  of  appliances  used  iu 
theatrical  amusement  enterprises.  Also  to  condnet  annisement  enterprises  of  all 
kinds.  To  purchase,  lease,  or  otherwise;  aemiire,  buy,  sell,  orolluM-wise  dispose  of 
lands  and  buildings  for  the  creel  ion,  operation,  aud  maintenance  of  theatres,  opera 
Jnuses, .and  amusement  enterprises  of  every  charact(!r,  witii  suitable  plants,  ma- 
chinery, lighting,  and  heating  apparatus,  and  other  appliances  connected  tiierewitli. 

FORM   12. —ANGORA  GOATS. 

To  carry  on  in  all  its  various  branches  n  general  stoek-raising  farm  and  ranch 
business;  particularly  to  buy,  sell,  breed,  raise,  or  otherwise  deal  in  Angora  Goats 
and  other  domestic  animals. 

405 


INCORPOUATION    AND   ORGANIZATION   OF   CORPORATIONS. 

FORM   13. -ANIMAL  FANCIERS. 

To  huv,  sell,  import,  export,  and  geucrally  deal  in  all  kinds  of  animals,  domestic 
or  wild;  and  i)artieularly  to  buy,  sell,  import,  export,  and  deal  in  dogs,  cats,  goats, 
birds,  and  such  otber  animals  as  arc  usually  bought,  sold,  imported,  aud  ex- 
])orted  by  dealers  iu  a  similar  line  of  business. 

FORM  14.  —  APARTMENT  HOUSES. 

To  erect,  build,  equip,  operate,  maintain,  buy,  and  sell  apartment  houses;  to 
supply  electricity  for  lighting,  heating,  power,  signalling,  and  other  purposes.  To 
oousti-uct,  own,  and  operate  electric  telephone  exchanges. 

FORM  15. —ARCHITECTS. 

To  conduct,  manage,  and  carry  on  the  businesses  of  architects  and  engineers  in 
all  or  any  of  their  respective  branches,  and  also  the  development  of  real  estate 
situate  in  the  State  of  or  elsewhere;  to  make  contracts  for  the  preparation 

of  plans  or  other  drawings  and  specilicatious  of  buildings  or  parts  of  buildings  of 
any  kind  and  description;  to  superintend  the  construction  thereof  and  to  do  any 
ani  all  acts  iu  the  Hue  of  the  businesses  of  architects  and  engineers  which  it  may 
deem  necessary,  profitable,  or  desirable  for  the  promotion  of  its  business.  To  ac- 
quire by  purchase  or  otiierwise  own,  hold,  buy,  sell,  convey,  lease,  mortgage,  or  en- 
cumber" real  estate  including  quarry  lands  or  other  property,  personal  or  mixed.  To 
survey,  subdivide,  plat,  improve,  and  deveh)p  lands  for  purposes  of  sale  or  other- 
wise, "and  to  do  and  perform  all  things  needful  and  lawful  for  the  development  and 
improvement  of  the  same  for  residence,  trade,  or  business.  To  acquiie  to  the 
same  extent  as  natural  persons  and  without  limit  as  to  amount,  by  purchase,  lease, 
exchange,  hire,  or  otherwise,  lands,  improved  or  unimproved,  tenements,  heredita- 
ments, chattels,  real  or  personal,  or  any  interest  therein;  to  erect  and  construct 
houses,  buildings,  and  works  of  every  description  on  any  lands  of  the  company  or 
upon  any  other" lauds  ;  to  rebuild,  enlarge,  alter,  or  improve  existing  houses,  build- 
ings, orVorks  thereon;  to  subdivide,  improve,  and  develop  lands  for  purposes  of 
sale  or  otherwise;  to  convert  and  appropriate  any  such  land  into  and  for  roads, 
streets,  and  other  conveniences,  and  to  do  and  perform  all  things  needful  and  lawful 
for  the  development  and  improvement  of  the  same,  and  generally  to  deal  with  and 
improve  the  property  of  the  company  and  of  other  parties ;  to  own,  hold,  and  main- 
tain any  property  acquired  by  the  company;  to  sell,  convey,  lease,  release,  let,  ex- 
change," mortgage,  or  otherwise  encumber  or  dispose  of  lands,  houses,  buildings, 
hereditaments,  appurtenances,  chattels,  and  other  property  of  the  company;  to  equip, 
furnish,  conduct,  operate,  manage,  lease,  and  maintain  hotels,  apartment  houses, 
boarding  houses,  dwelling  houses,  sanitariums,  warehouses,  or  any  kind  of  building 
for  dwelling,  amusement,  recreation,  charitable,  or  religions  purposes  ;  to  undertake 
or  direct  the  management  and  sale  of  the  property  of  the  company,  real  and  personal ; 
to  sell,  assign,  release,  hold,  or  satisfy  mortgages  which  may  become  the  property  of 
the  company ;  to  loan  on  bond  or  mortgage  or  otherwise,  or  to  advance  money  to, 
and  to  enter  into  contracts  and  arrangements  of  all  kinds  with  contractors,  laborers, 
skilled  or  otherwise,  builders,  projjerty  owners,  and  others. 

FORM  16.  —  ASPHALT. 

To  mine,  manufacture,  produce,  prepare,  buy,  sell,  export,  import,  and  generally 
deal  in  asphalt,  cement,  and  such  other  products  as  are  usually  dealt  iu  by  dealers 
engaged  in  a  similar  line  of  l:usiness;  to  manufacture,  produce,  ])repare,  cx])ort, 
import,  and  deal  in  any  product  in  the  manufacture  or  composition  of  which  asphalt 
or  cement  is  used  ;  to  prospect  for  and  locate  lands  suitable  for  clearing  and  mining 
all  kinds  of  minerals,  stone,  aud  other  products ;  also  to  enter  into  contracts  for  the 
paving,  repairing,  and  improving  of  streets,  alleys,  and  areas  in  and  about  public  or 
private  buildings  or  grounds. 

AUDITORS.    See  ACCOUNTANTS,  FORM  1. 
40G 


FORMS   AND   PRECEDENTS. 


FORM  17.  —AUTOMOBILES, 


To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  all  kinds  of 
vehicles,  engines,  machines,  or  appliances  for  the  generation  of  steam,  electric,  gaso- 
lene, or  otiier  power  for  the  purpose  of  propelling  care,  carriages,  wagons,  trucks, 
and  vehicles  of  every  kiiul  and  description ;  and  also  to  manufacture,  buy,  sell, 
import,  export,  and  generally  deal  in  machinery  of  all  kinds  and  such  tnecliauical 
devices  and  engineering  appliances  as  are  generally  manufactured,  bought,  sold, 
exported,  imported,  and  dealt  in  by  manufacturers,  and  dealers  in  a  similar  line  of 
business. 

FORM  18  —BAKERY. 

To  carry  on  the  business  of  bakers  in  all  its  various  brandies  in  the  city 
of  and  vicinity ;  to  manufacture,   make,  purchase,  sell,  export,  and  import 

bread,^  crackers,  biscuits,  cake,  sweetmeats,  and  confectionery  of  all  kinds  ;  also  to 
manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  baking  powders,  yeasts, 
cream  of  tartar,  and  all  otiier  articles  which  may  be  necessary  or  conveniently  used  in 
connection  with  the  aforementioned  business  or  businesses. 

FORM  19.  — BAKING  POWDER. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  baking  powder  and  its 
ingredients.  To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in 
baking  nowder  and  all  the  ingredients,  whether  chemical  or  otherwise  which  are 
or  may  be  component  parts  of  liaking  powder,  and  to  manufacture,  buy,  sell,  ex- 
port, import,  and  generally  deal  in  such  other  goods,  wares  and  mcrchanciise  as  are 
made  or  carried  by  manufacturers  and  dealers  in  a  similar  line  of  business. 

FORM  20.— BALLOT  BOXES. 

To  manufacture,  buy,  sell,  lease,  export,  import,  and  generally  deal  in  articles 
commonly  known  as  voting  or  ballot  boxes,  and  particularly  to  purchase  or  other- 
wise acquire  letters  patent  of  the  United  States  or  of  foreign  countries  governing 
the  manufacture  of  such  voting  or  ballot  boxes,  together  with  all  extensions  and 
renewals  of  the  same. 

FORM  21.  — BANKING  AND  TRUST  COMPANIES. 

To  carry  on  a  banking  and  trust  company  business  and  in  connection  therewith 
to  discount  bills,  notes,  and  other  evidences  of  debt,  receive  and  pay  out  deposits 
with  or  without  interest,  receive  on  special  deposit  money  or  bullion  or  foreign  coin, 
stocks,  bonds,  or  other  securities;  to  buy  and  sell  foreign  and  domestic  exchnnge, 
g  )ld  and  silver  bullion,  foreign  coins,  bonds,  stock,  bills  of  exchange,  notes,  and 
other  negotiable  paper;  to  lend  money  on  percentage,  security  or  bonds,  pledges  of 
bonds,  or  other  negotiable  securities;  to  take  and  receive  secnrily  by  mortgage  or 
otherwise  upon  property,  real  and  personal  ;  to  invest  money  for  iiulividuals  or 
corporations,  and  to  act  as  Trustee  for  any  purpose;  to  do  any  business  and 
exercise  any  powers  incident  to  the  business  of  trust  companies  doing  a  banking 
business. 

FORM  22. —BARREL  MANUFACTURE. 

To  manufacture,  buy,  sell,  export,  import,  aiul  generally  deal  in  barrels  and 
barrel  heads,  hogsheads  and  h(,\cs  made  from  wood  or  metal. 

FORM  23.  —  BICYCLES. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  bicycles  and  bicycle 
sundries ;  to  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  bicycles, 
motor  cycles,  bicycle  saddles,  bicycle  parts,  and  bicycle  sundries  of  all  kinds. 

407 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

FORM  24. —BISCUIT  COMPANY. 

To  pivparo,  inamil'acturo,  buv,  sell,  import,  export,  and  gonorally  ileal  in  biscuits, 
cakes,  crackers,  i)retzels,  })astry  and  bread  of  all  kinds,  and  in  other  food  products. 
To  nianulaeture,  buy,  sell,  import,  export,  and  generally  deal  in  maciiinery  for  the 
making  and  baking  of  biscuits,  cakes,  crackers,  pretzels,  pastry,  and  bread. 

FORM  25. —  BOOKS. 

To  carry  on  the  business  of  booksellers,  stationers,  bookbinders,  and  engravers, 
liliiographers,  publishers,  and  mannfacturers  of  inks  and  all  articles  and  things  of 
the  same  character  as  the  foregoing  or  connected  therewith. 

FORM  26. —BOOTS  AND  SHOES. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  boots,  shoes,  and  foot- 
wear of  every  kind  and  description.  To  manufacture,  buy,  sell,  impoi-t,  export,  and 
generally  deal  in  boots,  shoes,  rubbers,  soles,  lasts,  and  all  kinds  of  leather,  rubber, 
or  cloth  goods.  To  make,  manufacture,  buy,  sell,  import,  export  and  deal  in 
machinery  of  all  kinds  for  the  manufacture  of  boots  and  shoes,  rubbers,  soles,  lasts, 
and  all  kinds  of  leather,  rubber,  and  clotli  goods.  To  manufacture,  buy,  sell, 
export,  import  and  generally  deal  in  all  kinds  of  blacking,  polishes,  varnishes,  lasts, 
button  hooks,  fasteners,  and  such  other  articles  of  merchandise  as  are  usually  manu- 
factured by  manufacturers  and  dealers  in  a  similar  line  of  business. 

FORM  27.  —  BRANDIES. 

To  carry  on  the  business  of  manufacturers,  distillers,  and  dealers  in  brandies, 
■wines,  and  liquors  of  every  class  and  description.  To  manufacture,  buy,  sell,  export, 
import,  store,  warehouse,  and  generally  deal  in  brandies,  wines,  whiskey,  malt  liquors, 
gin,  spirits,  and  beverages  of  all  kinds,  and  their  products  and  by-products  of  every 
nature  whatsoever.  To  carry  on  the  general  business  of  distilling  and  rectifying 
brandies,  wines,  whiskey,  and  liquor,  and  the  blending  of  gins  and  whiskeys  of  all 
classes  and  description,  and  generally  deal  in  grain,  sugar,  molasses,  and  all  liquors, 
used  in  connection  with  the  operation  of  a  distillery.  To  manufacture,  buy,  sell, 
import,  and  export  maciiinery  for  the  manufacture,  distillation,  and  rectification  of 
liquors  of  every  class  and  description.  To  build,  operate,  and  maintain  warehouses, 
bonded  or  otherwise,  and  to  do  a  general  warehouse  business.  To  issue,  register, 
and  oertify  warehouse  receipts.     To  manufacture,  buy,  sell,  and  deal  in  ice. 

FORM  28.  —  BREEDERS. 

To  carry  on  the  business  of  breeding,  raising,  training,  buying,  selling,  import- 
ing, and  exporting  horses.  To  conduct  any  anil  all  manner  of  business  permitted 
at  fair  and  race  courses,  and  in  general  to  do  any  and  all  things  in  accordance 
with  law  that  may  directly  or  indirectly  be  connected  with  the  raising  of  horses. 
To  keep  careful  lists  of  the  most  celebrated  horses  of  all  noted  breeds,  and  their 
pedigree  and  distinguishing  characteristics,  and  to  publish  from  time  to  time  every 
kind  of  information  on  such  subjects  of  interest  to  horsemen.  To  buy,  sell,  raise, 
and  handle  live  stock  of  all  kinds  and  description. 

FORM  29.  — BREWERY. 

To  prepare,  brew,  manufacture,  export,  imj)()rt,  buy,  sell,  make,  and  deal  in  beer, 
porter,  ale,  and  all  other  classes  and  kinds  of  malt  liquors.  To  manufacture,  buy, 
sell,  im))ort,  and  export  malt.  To  buy  and  sell  grains  of  all  kinds  ;  to  manufacture, 
buy,  sell,  and  refine  liquors  of  all  kinds;  to  manufacture,  buy,  sell,  and  deal  in  ice. 
To  build,  oi)erate,  and  maintain  warehouses,  and  to  do  a  general  warehouse  business. 
To  manufacture,  buy,  sell,  import,  aiul  export  machinery  for  the  manufacture,  dis- 
tillation, brewing,  and  treating  of  malt  liquors. 

408 


FORMS   AND   PRECEDENTS. 

FORM  30.  — BRICK. 

To  manufacture  for  purposes  of  sale  pressed  brick,  building  brick,  terra  cotta, 
tile,  roofing,  vitrified,  and  other  building  materials  whicli  can  be  made  from  clay. 

FORM  31.  — BRIDGE  BUILDERS. 

To  manufacture,  sell,  export,  and  generally  deal  in  bridges  and  structural  work. 
To  manufacture,  buy,  sell,  export,  and  import  steel,  iron,  tin,  aluminum,  and  other 
metals.  Also  to  manufacture,  buy,  sell,  export,  and  import  engines,  boilers,  ma- 
chinery, plates,  apparatus,  tools,  appliances,  and  materials  useful  or  convenient  for 
carrying  on  any  of  the  several  lines  of  business  heretofore  set  forth. 

FORM  32.  —  BRONZE. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  bronzes  of  all 
kinds,  classes,  and  descriptions.  Also  to  manufacture,  prepare,  buy,  sell,  export, 
import,  and  generally  deal  in  silicon,  aluminum,  and  all  kinds  of  metals  or  metallic 
compounds  suitable  and  convenient  to  be  used  or  commonly  used  by  dealers  in 
bronzes. 

FORM  33.  —  BROOMS. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  brooms  of  all  classes 
and  descriptions ;  to  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in 
brooms,  broom  corn,  broom  hangers,  binding  twine,  binding  wire,  and  all  other 
articles  suitable  for  use  in  such  manufacture;  also  to  deal  in  such  other  goods, 
wares,  and  merchandise  as  are  usually  manufactured  or  dealt  in  by  manufacturers 
and  dealers  in  a  similar  Hne  of  business. 

FORM   34.— BRUSHES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  hair  brushes, 
scrubbing  brushes,  nail  brushes,  electric  brushes,  brooms  and  dusters  of  all  classes 
and  descriptions.  Also  to  manufacture,  buy,  sell,  export,  import,  and  generally  deal 
in  such  other  goods,  wares,  and  merchandise  as  are  commonly  manufactured  and 
dealt  in  by  those  engaged  in  a  similar  line  of  business. 

FORM  35.  — BUILDING  CONTRACTORS. 

To  engage  generally  in  the  business  of  contracting  for,  erecting,  decorating, 
and  furnishing  thereof,  buildings  of  every  class  and  description.  To  engage  gen- 
erally in  the  business  of  builders,  contractors,  and  dealers  in  lumber,  stone,  brick, 
cement,  marble,  plumbers'  supplies,  and  all  other  kinds  of  building  material. 

FORM  36.  —BUTCHERS. 

To  carry  on  the  business  of  wholesale  and  retail  dealers  in  meat  and  meat 
products,  and  to  operate  in  connection  therewith  slaughter-houses,  stock  yards,  and 
live-stock  farms  and  ranches;  also  to  operate  and  maintain  cold-storage  ware- 
houses, plants,  aud  all  buildings  necessary  or  expedient  for  carrying  on  the  aforesaid 
business. 

FORM  37. —  BUTTONS. 

To  carry  on  the  l)usincss  of  maiiufaeturers  and  dealers  iu  l)uttons  of  all  kinds, 
classes,  aud  drseriiitioris ;  to  manufacture,  l)uy.  sell,  ini|)ort,  export,  and  gcnrrally 
deal  in  buttons  and  all  i)rriduct3  U'^eessary  or  useful  in  the  business  of  but  ton  manu- 
facturing. To  purchase  or  ollierwi.se  acquire  letters  patent  of  the  United  States  or 
of  foreign  countries,  together  with  all  extensions  or  renewals  <if  the  same,  covering 
the  manufacture  of  buttons  and  button  maehincry  ;  also  to  i)uy,  manufacture, 
and  keep  in  stock  for  purposes  of  sale  such  goods,  wares,  and  mi-rchandise  as  arc 
usually  manufactured  by  and  dealt  in  by  manufacturers  and  dealers  in  a  similar  line 
of  business. 

409 


INCORPOUATION    AND   OUGANIZATION   OF   CORPORATIONS. 

FORM  38.  -  CAR  BUILDERS. 

To  carry  on  the  business  of  inaiuitac'turiiiijf,  huyiiijif,  leasing,  or  otlierwise  acquir- 
ing, equipping,  constructing,  altering,  repairing,  maintaining,  operating,  and  selling 
steam,  electric,  or  cable  cars,  and  to  manuiacture,  buy,  lease,  or  otlierwise  acquire, 
construct,  alter,  repair,  and  sell  all  apparatus,  api)liances,  devices,  machinery,  and 
materials  lor  use  in  operating,  constructing,  or  maintaining  steam,  electric,  or  cable 
cars,  or  used  in  constructing,  operating  or  maintaining  any  line  of  railway,  steam,  or 
electric  lines  or  otherwise,  or  the  stations,  terminals,  or  equipment  thereof. 

FORM  39.  — CARBON  ENGINES. 

To  manufacture,  buy,  sell,  import,  export,  and  deal  in  carbon  engines  and  all 
kinds  of  machinery,  tools,  and  implements  incidental  to  the  development  of  new  and 
useful  mechanical  devices,  and  to  ol)tain  letters  patent  thereupon  ;  to  acquire 
letters  patent,  domestic  or  foreign,  for  the  right  to  construct  machines  upon  which 
patents  have  already  been  issued  and  ajiplied  for. 

FORM  40.  — CASH   REGISTERS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  cash  registers, 
check,  slij),  and  automatic  printing  registers,  autographic  registers,  weighing,  adding, 
calculating  and  registering  machines  of  all  kinds,  classes,  and  descriptions. 

FORM  41.  — CATTLE. 

To  breed,  raise,  buy,  sell,  export,  import,  and  deal  in  cattle,  sheep,  horses,  and 
live  stock  of  all  classes  and  descriptions.  To  build,  construct,  buy,  lease,  or  other- 
wise acquire,  own,  and  maintain  shiughtcr-houses.  To  carry  on  the;  business  of 
butchers  and  packers  ;  also  to  manufacture,  buy,  sell,  and  generally  deal  in  all  articles 
made  from  the  carcasses  of  animals.  To  purcliase,  lease,  or  otherwise  acquire 
farms  and  lauds  suitable  for  stock  raising  and  agricultural  business. 

FORM  42. —CEMENTS. 

To  manufacture,  prepare,  buy,  sell,  import,  export,  and  deal  in  cement,  Port- 
land or  otherwise,  lime,  limestone,  and  all  kinds  of  iilasters  and  artificial  stone.  To 
build,  buy,  lease,  or  otherwise  acquire  manufactories,  plants,  buildings,  and  ware- 
houses suitable  for  tlie  manufacture,  selling,  and  storing  of  cement  and  other  prod- 
ucts of  a  similar  nature.  To  manufacture  and  deal  in  such  other  goods,  wares, 
and  merchandise  as  are  usually  manufactured  and  dealt  in  by  those  engaged  in  a 
similar  line  of  business. 

FORM  43.  — CEREALS. 

To  buy,  sell,  import,  export,  and  generally  deal  in  all  kinds  of  cereals  and  the 
manufactured  products  thereof.  To  grind  material  for  cereals  and  the  various 
products  thereof.  To  erect,  construct,  own,  purchase,  lease,  or  otherwise  acquire 
elevators,  mills,  granaries,  and  buildings  for  the  storing,  handling,  manufacturing, 
and  selling  of  grains  and  cereals,  and  the  various  products  thereof.  To  carry  on  a 
general  milling  and  manufacturing  business  in  the  preparation  of  grains,  cereals, 
and  other  products  for  market,  and  to  manufacture,  buy,  sell,  import,  export,  and 
deal  in  milling,  elevator,  and  all  other  machinery  for  the  handling  of  grains  and 
cereals  and  their  various  products  and  by-products. 

FORM  44.  —  CHEMICALS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  all  kinds  of 
chemicals,  and  to  carry  on  tho  business  of  chemists,  druggists,  and  manufacturers 
of,  and  dealers  in  pharmaceutical,  medicinal,  chemical,  and  other  preparations, 
articles,  compounds,  pigments,  drugs  and  druggists'  sundries,  chemical,  surgical, 

410 


FORMS   AND   PRECEDENTS. 

aud  scientific  apparatus  and  niacliinery.  To  aualvze  and  refine  wlieu  necessary 
all  kinds  of  chemicals,  medicines,  and  preparations.  To  apply  for,  obtain,  register, 
purchase,  or  otherwise  acquire,  use,  operate,  sell,  assign,  or  otherwise  dispose  of  any 
and  all  trade  marks,  secret  processes,  trade  names,  distinctive  marks,  and  all  inven- 
tions, improvements,  and  processes  used  in  connection  with  or  secured  under  letters 
patent  or  otherwise,  domestic  or  foreign,  aud  otlier  governmental  grants  or  con- 
cessions, aud  to  use  aud  employ  the  same  in  connection  with  the  purposes  herein- 
before set  forth. 

FORM  45.  — CIGARS. 

To  carry  on  the  business  of  manufacturers  and  dealers  in  cigars  and  tol^acco. 
To  manufacture,  buy,  sell,  exchange,  import,  export,  and  generally  deal  iu  leaf 
tobacco,  chewing  tobacco,  cigars,  cigarettes,  and  cheroots  ;  to  plant,  grow,  and  treat 
leaf  tobacco,  and  to  manufacture,  sell,  lease,  or  otherwise  acquire  machinery,  tools, 
implements,  aud  appliances  incidental  and  necessary  in  the  cultivation,  care,  and 
treatment  of  leaf  tobacco,  or  in  tiie  manufacture  of  cheroots,  chewing  and  smoking 
tobacco,  cigars  and  cigarettes.  To  build,  operate,  maintain,  lease,  or  otherwise 
acquire  factories,  warehouses,  and  buildings  suitable  for  the  caring,  storing,  prep- 
aration, and  manufacture  of  tobacco  and  its  several  products. 

FORM  46. —CLOTHING  MANUFACTURERS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  clothing  and 
wearing  apparel  of  every  nature  and  description.  To  engage  in  manufacturing, 
buying, selling,  importing,and  exporting  underwear  and  gentlemen's  furnishing  goods. 

FORM  47.— COAL. 

To  buy  and  sell  anthracite,  bituminous,  semi-bitumiuons  coal,  lignite  coal,  and 
their  products  and  by-products.  To  acquire  by  ])ureliasc,  lease,  or  otherwise  coal 
lands,  sliales,  and  properties,  and  to  operate  and  maintain  mines  thereon.  To 
engage  iu  the  business,  both  wholesale  and  retail,  of  dealers  in  coal,  coke,  wood,  aud 
fuel  oil. 

FORM  48.  — COAL  BRIQUETTE. 

To  manufacture,  buy,  sell,  deal  in,  aud  deal  with  coal  briquettes;  to  mine,  buy, 
sell,  deal  iu  and  deal  with  coal  and  other  minerals,  and  to  manufacture  aud  sell 
coke  and  its  by-products;  to  acquire  by  purchase,  lease,  or  otiicrwise  coal  mines, 
coal  lauds,  coal  properties,  mineral  and  mining  rights ;  to  manufacture,  purchase, 
or  otiierwise  acquire,  hold,  own,  mortgage,  lease,  assign,  transfer,  invest,  deal  in 
and  deal  with  and  trade  in  goods,  wares,  merchandise,  and  property  of  every  class 
and  description. 

FORM  49.  — COAL  TRANSPORTATION  COMPANY. 

To  mine,  buy,  sell,  import,  export,  and  generally  deal  in  anthracite,  bituminous, 
and  semi-bitumiuous  coal ;  to  act  as  agent  aud  broker  for  coal  aud  to  make  con- 
tracts with  coal  companies  with  reference!  to  handling  aud  selling  their  coal  and  on 
such  terms  as  may  be  agreed  upon.  To  buy,  lease,  build,  and  own  sales-rooms, 
storerooms,  storehouses,  warehouses,  docks,  piers,  aud  real  estate  necessary  to  the 
carrying  on  of  such  business.  To  carry  on  the  l)usiuess  of  engaging,  receiving, 
transporting,  and  delivering  coal  and  merchandise  of  all  kiiuls  upon  freight  or  for 
hire  between  any  port  or  ports  of  the  United  iStates  and  any  foreign  port  or  |)orts, 
or  between  any  foreign  port  or  ports  and  any  port  or  ports  of  the  United  States; 
to  engage  iu  the  business  of  chartering  vessels  therefor  aud  operate  vessels  in  such 
service.  To  act  as  agent  for  vessels  employed  iu  such  nervice;  to  contract  and 
arrange  for  the  transportation  of  cargo  to  aud  from  any  of  such  ])ortH  by  rail, 
boat,  or  otherwise  from  or  to  any  inland  or  coastwise  place  or  places.  To  build, 
buy,  sell,  charter,  eq\iip,  ojicratr,  and  own  steamships,  steamboats,  sailing  ships, 
coal  barges,  canal  boats,  and  other  property  to  be  used  iu  such  l)usiuess,  trade, 
commerce,  and  navigation. 

■Ill 


INCORPORATION   AND    ORGANIZATION    OP   CORPORATIONS. 

FORM  50.  — COFFEE. 

To  raise,  cultivate,  prndiiec,  export,  import,  treat,  cure,  ripen,  jjolish,  burn, 
roast,  brown,  buy,  sell,  and  <,'enerally  deal  in  collees  of  every  grade,  cliaracter,  and 
description.  To  acquire  bv  purchase,  lease,  or  otherwise  lands  and  properties  suit- 
able for  planting  and  raising  coll'cc  plants.  To  buy,  sell,  and  generally  deal  iu 
such  other  goods,  wares,  and  merchandise  as  are  usually  dealt  iu  by  those  eugaged 
in  a  similar  line  of  business. 

FORM  51.  — COLD   STORAGE. 

To  preserve  in  cold  storage  and  generally  deal  in  all  kinds  of  food  products  of 
a  perishable  nature  or  otherwise.  To  nianul'aeture,  buy,  sell,  and  deal  in  ice.  To 
buy,  sell,  store,  import,  and  export  fruit,  iisli,  butter,  milk,  and  all  kinds  of  food 
products,  whether  animal  or  vegetable.  To  operate  and  maintain  stores,  buildings, 
■warehouses,  depots,  and  wharves  for  the  carrying  on  of  any  of  the  aforesaid  lines  of 
business. 

FORM  52.  — COLONIZATION  COMPANY. 

To  buy,  sell,  lease,  or  otherwise  acquire  lands  and  other  property  for  the  pur- 
pose  of  disposing  of  the  same  to  settlers;  to  plant,  grow,  and  cultivate  tobacco, 
fruits,  sugar,  collee,  and  all  kinds  of  vegetables;  to  mine  for  gold,  silver,  copper, 
lead  and  all  kinds  of  minerals;  to  manufacture  marble,  stone,  brick,  and  building 
materials  of  a  similar  nature;  to  cut,  nuuinfacture,  buy,  sell,  and  deal  iu  wood 
and  lumber;  to  build,  maintain,  and  operate  hotels,  stores,  packing-houses,  ware- 
houses, elevators,  saw-mills,  tlour-niills,  dwellings,  stations,  and  wharves;  to  raise, 
buy,  sell,  and  deal  in  mules,  sheep,  and  horses ;  to  engage  iu  the  business  of  farmers 
and  planters. 

FORM  53.  -  COMMERCIAL  COMPANY.    (See  FORM  92.) 

FORM  54.  —  COMMISSION  MERCHANTS. 

To  engage  in  the  business  of  selling  goods,  wares,  and  merchandise  as  commis- 
sion mercliauts,  and  as  general  selling  agents;  particularly  to  act  as  agents  or 
brokers  for  the  selling  upon  commission  or  otherwise  of  the  following  classes  of 
property,  to  wit  :  (here  insert  descrij)tion  of  projierty  to  be  sold.) 

FORM  55.  —  CONFECTIONERY. 

To  purchase,  manufacture,  buy,  sell,  import,  ex{)ort,  and  deal  in  candy,  confec- 
tionery, sugar,  glucose,  ices,  chocolate,  and  chewing  gum  ;  to  manufacture,  purchase, 
or  otherwise  acquire,  sell,  import,  export,  and  generally  deal  in  such  goods,  wares, 
and  merchandise  as  are  ordinarily  carried  by  manufacturers  or  dealers  in  a  similar 
line  of  business. 

FORM  56.  —  CONSTRUCTION  COMPANY. 

To  manufacture,  buy,  sell,  or  otherwise  acquire,  import,  export,  and  generally 
deal  in  sheet.iron,  copper,  tin,  galvanized  iron,  cornices,  skylights,  smokestacks, 
water,  gas,  and  electric  works,  wharves,  roads,  reservoirs,  canals,  factories,  waie- 
hoiises,  and  mills ;  to  manufacture,  buy,  sell,  import,  exjjort,  and  generally  deal  iu 
iron,  steel,  manganese,  copper,  and  other  materials  or  alloy  tiiereof,  coke,  gas,  coal, 
lumber,  and  building  materials  or  any  article  consisting  or  partly  consisting  of  iron, 
steel,  copper,  and  other  materials,  and  any  products  thereof. 

FORM  57.  -CONTRACTORS  AND   BUILDERS. 

To  construct,  erect,  equip,  repair,  and  improve  houses,  buildings,  public  or  pri- 
vate roads,  alleys,  tramways,  railways,  reservoirs,  irrigation  ditches,  wharves, 
sewers,  tunnels,  conduits,  and  subways. 

412 


FORMS    AND    PRECEDENTS. 


FORM  5S.  — CORDAGE. 


_  To  manufacture,  buy,  sell,  import,  export,  aud  gcaerallv  deal  iu  cordage,  binding 
twine,  rope,  hemp,  hawsers,  eliaiub,  and  other  commodities  of  a  similar  nature. 

To  buy,  sell,  export,  import,  aud  generally  deal  iu  rope,  hemp,  aud  all  raw  mate- 
rials suitable  for  use  iu  the  manufacture  of  cordage  and  binder  twine. 

FORM  59.  — COTTON. 

To  buy,  sell,  import,  export,  plaut,  raise,  gather,  giu,  and  clean  cotton;  to  bale 
cotton  by  baud  or  mecliauical  process ;  to  build,  operate,  and  maintain  warehouses, 
aud  to  do  a  general  warehouse  busiuess.  To  manufactui-e,  buv,  sell,  export,  im- 
port, and  generally  deal  in  machinery  for  the  ginning,  cleaning,"  baling,  and  com- 
pressing of  cotton  and  other  fibrous  materials.  To  engage  iu  the  business  of 
producing,  buying,  selling,  importing,  aud  exporting  cotton  seed.  Also  to  manu- 
facture, purchase,  lease,  or  otherwise  acquire,  operate,  aud  sell  machinery  for  com- 
pressing cotton  or  other  fibrous  materials,  and  for  the  purpose  of  giiiniug  and 
cleaning  the  same. 

FORM  60. —COTTON  BROKERS. 

To  carry  on  the  business  of  buying,  selling,  and  otherwise  dealing  iu  cotton,  either 
as  principals  or  on  commission. 

FORM  61. —  COTTON  OIL. 

To  buy,  gin,  bale,  aud  prepare  seed  cotton.  To  carry  ou  the  business  of  buying, 
selling,  importing,  exporting,  manufacturing,  refining,  preparing,  producing'  and 
generally  dealing  in  cotton  oil  aud  other  oils;  to  carry  on  the  business  of  buying, 
selling,  importing,  ginning,  baling,  warehousing,  and  shipping  seed  cotton  and  any 
aud  all  other  kinds  of  cotton ;  to  manufacture,  produce,  prepare,  buy,  sell,  iuijiort, 
export,  and  generally  deal  iu  cotton  seed  and  any  aud  all  products  aiid  by-products 
thereof. 

FORM  62. -COTTON  PLANTATIONS,  ETC. 

To  manufacture  from  the  cotton  plant  or  other  substances  pulp,  paper,  chemi- 
cals, aud  other  material,  aud  all  or  any  articles  consisting  or  partly  consisting  of 
pulp,  paper,  cliemicals,  or  other  materials,  aud  all  or  any  products  thereof.  To 
acquire,  own,  lease,  occupy,  use,  improve,  cultivate,  or  develop  any  cotton  planta- 
tions, wood  lands,  lands  containing  coal,  iron,  or  other  ores,  or  other  lauds  for  any 
purpose  of  the  c(jmpaiiy.  To  gal  her,  remove,  mine,  or  otherwise  extract  cotton 
plant.s,  timber,  or  other  vegetation,  coal,  ores,  or  other  minerals  from  any  lands 
owned,  acrpiired,  leased,  or  occupied  by  the  company  or  from  any  other  lands.  To 
buy  aud  sell  or  otherwise  to  deal  or  to  trallie  in  raw  cotton,  cvjtton  niant,  pulp, 
paper  or  chcmieals,  wood,  lumber,  coal,  iron,  ores  and  other  niiitcrials,  and  any 
of  the  products  thereof  and  any  articles  consisting  or  partly  consisijuir  thereof.  To 
purchase,  iiirf;,  make,  construct,  or  otherwise  aerjuire,  provide,  maintain,  equip,  alter, 
erect,  improve,  repair,  manage,  and  work  any  private  roads,  private  telegraph  and 
telephone  lines,  bridges,  piers,  wharves,  wells,  reservoirs,  flumes,  watercourses,  water 
works,  aqueducts,  shafts,  tunnels,  furnaces,  coke  ovens,  crushing  works,  gas  works, 
electric  light  and  power  plants,  compressed-air  plants,  chemieal  works  of  all  kinds, 
concentrators,  snudters,  smelting  [ilanis  and  refineries,  matting  plants,  warehouses, 
workshops,  factories,  dwelling  houses,  stores,  hotels,  or  other  buildings,  engines, 
machinery,  im[)lemetits  and  other  works,  conveniences  and  properties  of  anv  de- 
scription iu  eonn(;etion  with  or  which  may  seem  directly  or  indirectly  conducive  (o 
any  of  the  objects  of  the  company,  and  to  conlril)ute  to,  sut)sidi/,e,  or  otherwise  aid 
or  take  part  in  any  such  o[ierations.  To  charter,  hire,  l)uild,  or  otherwise  acquire 
aud  maintain  steamshi|)3  and  other  vessels  of  any  description,  and  private  steam, 
compressed  air,  gravity,  or  electric  railroads  and  tramways,  and  to  employ  the 
same  in  the  trans jiortation  of  the  company's  raw  material,  |)roducts,  and  sui)plies. 
To  buy,  sell,  manufacture,  and  deal  in  machinery,  implements,  conveniences,  pro- 


INCORPORATION    AND    ORGANIZATION   OF   CORPORATIONS. 

visions,  ami  ihiiij^rs  capable  of  being  used  in  connection  wilh  manufacturing  opera- 
tions or  any  of  tlie  business  of  tiie  company  or  required  by  workmen  aud  others 
employed  by  the  company.  To  buv,  sell,  hold,  manage,  lease,  turn  to  account,  and 
otherwise  acquire  land  and  freehold  estates  and  interests  therein;  and  to  lay  off 
realty  into  lots  and  blocks,  street  alleys  aud  parks,  and  to  dedicate  such  portion 
thereof  to  the  public  as  the  company  may  think  proper. 

FORM  63.  — CUTLERY. 

To  manufacture,  buy,  sell,  lease,  export,  import,  and  generally  deal  in  cutlery, 
razors,  tools,  aud  machinery  of  all  kind,  classes,  and  descriptions. 

FORM  64.  — DAIRY  PRODUCTS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  butter,  butter- 
milk, oleomargarine,  and  butterine ;  to  buy,  sell,  and  generally  deal  in  milk  and  all 
kiutls  of  dairy  products  ;  to  construct,  maintain,  and  operate  refrigerating  cars,  fast 
freight  lines,  aud  warehouses. 

FORM  65.  — DECORATING. 

To  carry  on  the  business  of  painting,  paper  hanging,  and  the  decoration  of  houses 
and  buildings  of  every  class  and  description ;  to  carry  on  the  business  of  manu- 
facturing, buying,  selling,  importing,  exporting,  and  generally  dealing  in  stained 
and  enamelled  glass  aiul  all  kinds  of  goods,  wares,  and  merchandise  suitable  for  use 
or  ornamentation  in  the  decorating  business.  To  manufacture,  prepare,  buy,  sell, 
import,  aud  export  paint  aud  painters'  supplies  and  kindred  articles. 

FORM  66.  — DEPARTMENT  STORES. 

To  carry  on  the  business  of  a  general  department  store ;  to  establish  and  con- 
duct therein  the  business  of  dry-goods  merchants,  milliners,  cloth  and  fabric  maim- 
facturers,  furriers,  gents'  furnishing  goods,  hosier's,  hatters,  clothiers,  boot  and  shoe 
merchants,  chemists,  druggists,  dealers  in  leather  goods,  wholesale  furniture,  silver, 
china,  and  glass  ware,  books,  stationery,  notions,  photographs,  pictures,  and  jewels. 
To  buy,  sell,  import,  export,  and  generally  deal  in  plated  goods,  perfumery, 
toilet  articles,  bicycles,  motor  carriages  of  all  kinds,  wines,  liquors,  tobacco,  and 
photographic  supplies. 

FORM  67.  — DISTILLERS. 

To  engage  in  business  as  distillers  and  rectifiers  of  brandies,  whiskies,  and 
liquors  of  all  kinds,  classes,  and  descriptions.  To  carry  on  the  business  of  manufac- 
turers, distillers,  and  dealers  in  wines,  brandies,  spirits,  and  liquors  of  all  kinds ;  to 
carry  on  the  general  business  of  distilling  and  rectifying  wines,  brandies,  spirits, 
and  liquors  of  all  kinds,  and  generally  to  deal  in  grains,  sugar,  molasses,  and  all 
products  used  in  connection  with  the  operation  of  a  distillery.  To  manufacture, 
buy,  sell,  import,  export,  and  deal  in  machinery  for  the  distillation  and  rectification 
of  liquoi-s  of  every  class  and  descri])tions.  To  build,  o))erate,  and  maintain  ware- 
houses, bonded  or  otherwise,  and  to  do  a  general  Avareliouse  business.  To  issue, 
register,  guaranty,  and  certify  warehouse  receipts.  To  manufacture,  buy,  sell,  and 
deal  in  ice. 

FORM  68.  — DOCK  COMPANY. 

To  construct,  erect,  and  maintain  docks,  elevators,  piers,  basins,  loading  and 
unloading  machines,  coal-yards  and  all  kinds  of  terminal  and  transfer  facilities  for 
railway  or  water  transportation.  Also,  to  engage  in  freighting,  lighterage,  wharfage, 
and  warehousing  business.  Also,  to  load  and  unload  cars  and  vessels  of  all  kinds 
and  descri[)tions.  Also,  to  purchase  docking  and  berthing  facilities  for  steam  and 
sailing  vessels  of  all  kinds  aud  descriptions. 

414 


FORMS   AND   PRECEDENTS. 


FORM  69.  —  DREDGING. 


To  carry  ou  the  business  of  dredging  iu  all  its  various  branches ;  to  buy,  sell, 
manufacture,  purchase,  lease,  or  otherwise  acquire,  own,  maintain,  and  operate 
docks,  scows,  lighters,  derricks,  vessels  —  steam  or  otherwise  —  engines,  cars, 
wagons,  tools,  and  personal  property  of  every  class  and  description  convenient 
or  necessary  in  carrying  on  the  business  of  dredging. 

FORM  70.  —  DRILLING. 

To  prospect,  bore,  drill  for,  and  produce  oil  and  natural  gas ;  to  purchase, 
lease,  or  otherwise  acquire  lands  believed  to  contain  oil  and  gas,  and  to  erect  and 
maintain  thereon  pumping  and  drilling  stations,  reservoirs,  tanks,  pipe  lines  and 
other  facilities  and  conveniences  that  may  be  necessary  or  required  in  and  about 
said  business. 

FORM  71. —DRUGS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  iu  all  kinds  of 
drugs,  druggists'  sundries,  pharmaceutical,  medicinal,  chemical,  and  all  other  prepa- 
rations ;  to  manufacture,  buy,  sell,  import,  export,  and  generally  deal  iu  compounds, 
pigments,  electrical,  medicinal,  surgical,  and  scientific  apparatus  aud  proprietary 
articles  of  all  kinds.  To  maintain  a  laboratory  for  the  analysis  of  all  kinds  of 
chemical,  animal,  and  vegetable  products. 

FORM  72.— DRY   GOODS. 

To  buy,  sell,  import,  export,  manufacture,  and  deal  in  dry  goods  of  every  class, 
nature,  aud  description ;  to  conduct  a  general  retail  and  wholesale  dry -goods  busi- 
ness, either  as  principals  or  on  commission  or  both.  To  buy,  sell,  import,  export, 
aud  deal  iu  laces,  linens,  white  goods,  silks,  ribbons,  neck  wear,  gloves,  cotton,  and 
dry  goods  of  all  classes  aud  descriptions. 

FORM  73.  —  ELECTRICAL   BUSINESS  —  GENERAL. 

To  carry  ou  the  business  of  electricians,  electrical  engineers  and  dealers  in 
electricity,  and  electric  motive  power,  lighting,  and  lieating.  To  manufacture,  buy, 
sell,  import,  exi)ort,  and  generally  deal  in  electrical  machinery  of  all  classes  and 
descriptions;  also  to  produce,  accumulate,  distribute  for  hire  electricity  and  electro- 
motive force,  aud  to  sup|)ly  the  same  for  use  as  power  for  lighting,  lieating,  aud 
motive  purposes;  to  carry  on  the  business  of  lighting  cities,  towns,  villages,  streets, 
buildings  —  public  or  private  —  by  means  of  electricity,  and  to  supj)ly  liglit  and 
heating  power  to  carriers  of  passengers  and  goods,  either  by  land  or  water.  To 
construct,  build,  purchase,  lease,  or  otherwise  acquire,  maintain,  equip,  oj)erate,  and 
build  street  railways,  street  cars,  and  other  passenger  or  freight  vehicles  operated 
by  electricity  or  otherwise.  To  manufacture,  use,  purchase,  lease,  or  otherwise 
acquire  and  maintain  telephones,  telegrapiis,  plionographs,  and  all  kinds  of  electrical 
devices ;  to  construct,  operate,  and  maintain,  purcliase.  lease,  or  otiierwisc  acquire 
subways,  coiuluits,  electric  ligiiting  and  heating'  plants.  To  lay,  coustruet,  and 
maintain  cables,  wires,  lines,  and  all  necessary  appurtenances  and  appliances. 

FORM  74.      ELECTRIC  GENERATING  MACHINERY. 

To  manufacture,  construct,  j)urciiase,  or  otherwise  acquire,  deal  in,  sell,  hire, 
lease,  use,  repair,  oi)erate,  and  maintain  electric  geiu-rating  machinery  and  ajiparatus, 
dynamos,  motors,  meters,  electric  engines,  accumulators, and  any  and  all  parts,  devices, 
instriimeiits,  and  things  ada|)ted  to  be  usi-d  in  llie  constriirfion  of  or  upon  or  in  con- 
ncftion  with  or  in  the  operation  of  such  electric  generating  innchinery  and  a|>paratus, 
dynamos,  motors,  meters,  electric  engines,  and  accumulators,  and  alsn  all  a|p|iaraliis, 
machinery,  engines,  tools,  drviees,  and  apnliances  for  generating'  or  nroducing,  accu- 
mulating, distributing,  and  using  elect ricity  for  any  |)nrr)ose,  and  also  all  parts,  nt- 
tacliments,  devices,  instruments,  articles,  and  things  U>  be  u.sed  therewith  or  in  the 
constructifju  and  operation  thereof.  To  coustruet,  jiiirrlia.se,  or  otherwise  acquire, 
deal  in,  sell,  hire,  lease,  u.sc,  repair,  operate,  aud  niauitaiu  electric  light  plants,  clcc- 

415 


INCOUrOKATlON  AND  OUG ANIZATION  OF  COUrOUATIONS. 

trie  power  plants,  oloctric  plants  and  power  plants  of  any  and  every  character  and 
t'ur  aiiv  and  every  imrpusc,  and  niaeliinery,  engines,  tools,  devices,  and  appliances  of 
auv  and  every  eliaraeter  whatsoever  therefor. 

FORM  75.  — ELECTRIC  LIGHTING. 

To  mannfactiire,  generate,  store,  transmit,  and  distribute  electric  current  for 
liijht,  heat,  and  power;  to  manufaeturc,  buy,  sell,  import,  export,  lease,  or  otherwise 
acquire  and  generally  deal  in  maeliiuery,  and  devices  for  the  manufacture,  generation, 
storage,  transmission,  and  distribution  of  electric  current  for  light,  heat,  and  power 
purposes  ;  to  erect,  buy,  sell,  lease,  or  otherwise  acquire,  operate,  and  maintain  elec- 
tric lighting,  heating,  and  power  plants;  to  manufaeturc,  buy,  sell,  lease,  or  otlier- 
wise  acquire,  imj)ort,  export,  and  generally  deal  in  electric  apparatus  of  all  kinds; 
to  erect,  buy,  sell,  lease,  or  otherwise  acquire,  maintain,  and  operate  underground 
subways,  conduits,  poles,  string  wires,  above,  upon,  or  under  the  si  reets,  alleys,  and 
territories  of  counties,  townships,  cities,  towns,  and  villages,  whether  maintained  or 
owned  by  public  or  private  corporations  or  individuals. 

FORM  76.  —  ELECTRICAL  MACHINERY. 

To  nian\ifaeture,  buy,  sell,  import,  export,  and  generally  deal  in  electrical  ma- 
chinery and  supplies  of  all  classes  and  descriptions ;  to  manufacture,  buy,  sell,  im- 
port, export,  repair,  convert,  lease,  or  otherwise  dispose  of  and  generally  deal  in 
electric  nu)tors,  electrostatic  machines,  continuous  electric  batteries,  interrupted 
current  batteries,  dry-cell  electrodes,  X-Ray  tubes,  fluoroseopes,  internal  body  bat- 
teries, battery  apparatus,  milli-ampere  meters,  sinusoidal  current  electric  machines, 
rheostats,  compressors,  generators,  pumps,  motors,  and  electrical  appliances  and 
goods  of  every  kind  and  character.  To  buy,  sell,  import,  export,  lease,  or  other- 
wise acquire  and  generally  deal  in  all  kinds  of  ve"hicles,  machines,  or  appliances 
for  the  generation  of  electric  power  for  the  purpose  of  propelling  cars,  wagons, 
trucks,  and  vehicles  of  every  kind  and  description. 

FORM  77. —ELECTRICAL  VEHICLES. 

To  manufacture,  buy,  sell,  lease,  or  otherwise  acquire,  export,  import,  and  gen- 
erally deal  in  vehicles  of  every  class  and  description  propelled  by  electric  power ; 
to  acquire  by  purchase,  lease,  or  otherwise  electrical  vehicles  for  the  purpose  of 
operating  the  same  in  carrying  and  transporting  passengers,  goods,  ^'ares,  and  mer- 
chandise. To  acquire  by  purchase,  lease,  or  otherwise  to  equij)  vehicles  of  every 
kind  and  descrijjtion  for  the  purpose  of  using  and  operating  the  same  for  the  carriage 
of  passengers,  goods,  wares,  and  merchandise  by  means  of  electricity,  gasolene, 
compressed  air,  or  steam. 

FORM  78.  —  ELEVATORS  (GRAIN). 

To  erect,  buy,  sell,  lease,  or  otherwise  acquire  and  maintain  and  operate  eleva- 
tors for  the  storage  of  grains  and  cereals  of  every  kind  and  description.  To  build, 
operate,  and  maintain  warehouses  and  to  do  a  geiuual  warehouse  business ;  to  issue, 
register,  and  certify  warehouse  receipts.    To  manufacture,  buy,  sell,  and  deal  in  ice. 

FORM  79. -ELEVATOR  MACHINERY. 

To  manufacture,  construct,  purchase,  or  otherwise  acquin;,  deal  in,  sell,  hire, 
lease,  use,  repair,  operate,  and  maintain  elevators  and  hoisting  and  lifting  apparatus 
of  any  and  every  character  and  any  and  all  parts,  devices,  instruments,  and  things 
adapted  for  use  in  the  construction  of  or  upon  or  in  connection  with  or  in  the  opera- 
tion of  such  elevators,  hoisting  and  lifting  ajjparatus  of  any  and  every  character. 

FORM  80.  —  ELEVATORS  (PASSENGER). 

To  manufacture,  buy,  sell,  lease,  or  otherwise  acquire,  import,  export,  equip, 
maintain,  and  operate  elevators  and  hoisting  machinery  of  every  class  and  descrip- 
tion, whether  propelled  by  electricity,  air,  power,  steam,  or  otherwise. 

41G 


FORMS   AND   PRECEDENTS. 


FORM  81.  — ENAMEL  AND   STAMPED  WARE. 

To  manufacture,  cast,  forge,  roll,  tin,  enamel,  coat,  plate,  buy,  sell,  import,  ex- 
port, and  generally  deal  in  all  kinds  of  enan)el  and  stamped  ware,  including  kitchen 
and  liousehold  wares,  household  ornaments,  and  enamel  and  stamped  articles  made 
from  iron,  steel,  tin,  aluminum,  and  other  materials. 

FORM  82.  —  ENGINEERING  AND  DREDGING  COMPANY. 

To  carry  on  a  general  dredging,  contracting,  and  engineering  business  in  all 
of  their  brandies  ;  also  to  design,  construct,  enlarge,  extend,  repair,  complete, 
take  down  and  remove,  or  otherwise  engage  in  any  work  upon  oridges,  piers, 
docks,  foundations,  mines,  shafts,  tunnels,  wells,  waterworks,  lighthouses,  build- 
ings, railroads,  telegraph  and  telephone  lines,  canals  and  all  kinds  of  excavations, 
and  iron,  wood,  masonry,  and  earth  constructions  in  all  parts  of  the  world,  and 
to  make,  execute,  and  take  or  receive  any  contracts  or  assignments  of  contracts, 
therefor  or  relating  thereto  or  connected  therewith. 

To  engage  in  the  business  of  manufacturing,  buying,  selling,  and  dealing  in 
cranes  for  lifting,  hoisting,  dredging,  and  conveying  materials  of  all  kinds,  ami  in 
conveying  machinery,  hoisting  machinery,  and  coal-handling  machinery  of  every 
description,  and  in  hydraulic,  electric,  pneumatic,  and  power  machinery  of  every 
description,  and  in  steam  hammers,  charging  machines,  drilling,  concentrating, 
milling,  and  mining  machines,  ingot  extractors  and  foundry  plants,  and  in  all  kinds 
of  fittings,  tools,  supplies,  and  apparatus  pertaining  thereto ;  or  for  any  other  pur- 
pose which  now  is  or  may  be  incidental  or  necessary  for  a  general  contracting  or 
engineering  business. 

To  manufacture  or  purchase,  or  both,  all  tools,  machinery,  and  appliances  neces- 
sary, proj)er,  or  convenient  for  the  carrying  on  of  the  said  manufactures. 

To  manufacture,  buy,  sell,  and  generally  deal  in  iron,  steel,  and  other  metals, 
and  any  and  all  the  products  thereof. 

To  quarry,  mine,  cut,  saw,  finish,  prepare  for  market,  buy,  sell,  and  deal  in  min- 
erals and  mineral  substances  of  all  kinds  ;  to  buy,  lease,  or  otherwise  acquire,  use, 
build,  sell,  lease,  or  otherwise  dispose  of  lands  or  any  interest  thereon ;  to  build, 
maintain,  own,  lease,  and  operate  roads,  railroads,  or  bridges  (together  with  rights 
of  way  for  the  same),  canal  boats,  steamboats,  and  other  means  and  mechanism  of 
transportation  ;  reservoirs,  dams,  watercourses,  aqueducts,  wharves,  mills,  hydraulic 
works,  power  and  ligiiting  plants,  equimnent  works,  factories,  warehouses,  dwell- 
ing houses,  and  other  works  which  may  be  necessary  or  convenient  to  the  carrying 
out  of  tlie  objects  of  the  company. 

To  purchase  and  otherwise  acquire,  and  to  operate,  maintain,  and  dispose  of  the 
mills,  plants,  and  business  of  individuals,  corporations,  and  firms  in  any  business 
similar  to  the  business  of  this  company  or  allied  therewith. 

To  purchase  or  otherwise  acquire,  sell,  dispose  of,  and  deal  in  real  and  personal 
property  of  all  kinds,  and  in  particular  lands,  buildings,  business  concerns  and  un- 
dertakings, mortgages,  shares,  book  di'l)ts  and  claims,  and  any  interest  in  real  or 
personal  properly,  and  any  claims  against  such  pro[)erty  or  against  any  person 
or  company,  and  to  carry  on  any  business,  concern,  or  undcrlakiiig  so  acquired. 

To  enter  into,  make,  perform,  and  carry  out  contrarts  of  every  kind  and  for  any 
lawful  purpose  with  any  person,  firm,  association,  or  corporation. 

FORM  83.  —  EXPLOSIVES. 

To  manufaetiire,  buy,  sell,  exi)ort,  im|iort,  and  generally  dial  in  blasts,  sporting 
powder,  and  high  exphtsivcs  of  every  class,  nature,  and  description.  To  manufac- 
ture, bi'iy,  sell,  export,  import,  and  generally  deal  in  machinery,  supplies,  tools,  and 
appliances  necessary,  proper,  or  convenient  for  the  carrying  on  of  the  above 
described  lines  of  business. 


27 


•117 


INCOUrORATION    AND   ORGANIZATION    OF    CORPORATIONS. 


FORM  84  —  EXPRESS. 

To  carry  on  tho  business  of  engaging;,  receiving,  transporting,  and  delivering 
nuM-ehandise  uj)on  tVeiglit,  or  for  hire,  witJiin  tlie  corporate  limits  of  any  city,  town, 
or  village  in  the  United  States,  or  between  any  cities,  towns,  or  vdlages  in  the 
United  States,  or  between  any  port  of  tiie  United  States  and  any  port  or  ports  of 
the  United  Slates,  or  between  any  foreign  port  or  ports  and  any  port  or  ports 
of  the  United  States.  To  carry  on  the  business  of  equipping,  maintaining,  and 
operating  wagons,  drays,  cars,  and  vessels  of  every  class  and  description  for  the 
carrying" on  of  the  l)usiness  hereinbefore  provided  for.  To  enter  into  contracts 
for  the  "transportation  of  merchandise  between  any  of  the  localities  hereinbefore 
mentioned,  and  to  enter  into  contracts  for  the  carriage  of  mails,  passengers,  goods, 
wares,  and  merchandise  by  any  means,  eitlier  by  its  own  vessels,  railways,  or 
conveyances  or  by  the  vessels,  railways,  or  conveyances  of  others.  To  carry  on  a 
general  express,  freiglit,  and  transportation  business  ;  to  gather,  receive,  distribute, 
and  deliver  goods,  wares,  and  merchandise  of  every  class  and  description.  To 
establish  stores  and  warehouses  for  receiving  and  delivering  packages  and  circular 
matter. 

FORM  85.  —  EXTRACTING  COMPANY. 

To  mine  and  extract  gold,  silver,  and  other  precious  metals  from  placers  and 
lodes  or  other  mineral  lands  in  any  part  of  the  United  States,  and  in  any  and  all 
foreign  countries,  and  to  this  end  to  purchase,  lease,  or  otherwise  acquire,  hold,  own, 
mortgage,  sell,  operate,  and  control  mining  property,  and  all  necessary  plants  and 
machinery  adapted  for  the  purposes  of  mining  and  extracting  gold,  silver,  and 
precious  metals. 

FORM  86.  —  FANCY  GLASS. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  stained  glass, 
transparent  vault  and  sidewalk  lights,  hail-proof  glass  for  greenhouses,  skylights, 
and  ornamental  stained  glass  of  all  kinds  and  descriptions. 

FORM  87.  -  FARM  AND  DAIRY  PRODUCTS. 

To  proauce,  purchase,  sell,  import,  export,  and  generally  deal  in  milk,  butter, 
cheese,  vegetables,  and  all  kinds  of  farm,  garden,  and  dairy  products.  Also  to  ster- 
ilize, condense,  preserve,  and  certify  milk. 

FORM  88.  —  FARM  PRODUCTS,  SOUTHERN. 

To  produce,  manufacture,  refine,  buy,  sell,  import,  export,  and  generally  deal 
in  cotton,  sugar  cane,  sugar,  molasses,  syrups,  and  tobacco  in  all  forms,  and  other 
products  of  agriculture  or  industry. 

FORM  89.  —  FIREPROOFING. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  fireproofing 
brick  and  building  material  of  every  kind,  nature,  and  description.  Also  to  manu- 
facture, buy,  sell,  import,  export,  and  generally  deal  in  building  material  and  appli- 
ances for  the  construction  of  fireproof  buildings  and  the  protection  of  the  same 
from  fire. 

FORM  90.— FISHERIES. 

To  engage  in  the  business  of  producing,  selling,  exporting,  importing,  and  deal- 
ing in  fish  and  sea  products,  nets,  lines,  and  seines,  and  all  kinds  of  appliances 
for  the  catching  or  preserving  of  fish.  Also  to  engage  in  tlie  business  of  catch- 
ing, storing,  freezing,  packing,  salting,  canning,  and  otherwise  preserving  fish. 
AJso  to  engage  in  the  business  of  proj)agating  fisli  and  maintaining  ponds  for  that 
purpose;  to  construct,  purchase,  lease,  or  otherwise  acquire,  maintain,  and  operate 
cold-storage  and  refrigerator  plants  and  refrigerating  cars,  and  to  do  a  general  ware- 
house and  storage  business,  and  in  ef)nnection  therewith  to  issue  registered,  certi- 
fied, and  guaranteed  warehouse  receipts. 

418 


FORMS    A\D   PRECEDENTS. 


FORM  91. —  FLOUR. 


To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  flour,  feed, 
breakfast  foods,  and  other  articles  manufactured  from  grain  or  cereals.  Also  to  op- 
erate in  connection  therewith  grain  warehouses,  elevators,  and  cars  for  the  carrying 
of  grain,  flour,  and  food  products. 

FORM  92.  —  FOOD  PRODUCTS. 

To  produce,  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  food 
and  cereal  products  of  all  classes  and  description.  Also  to  can,  export,  import,  and 
sell  meats,  fish,  vegetables,  and  fruits  of  all  kinds  and  descriptions. 

FORM  93.  —  FOREIGN  COMMERCIAL  COMPANY. 

This  corporation  is  formed  for  the  carrying  on,  in  any  foreign  countries,  of  the 
several  lines  of  business  herein  described.  To  purchase,  sell,  exchauge,  lease,  or 
otherwise  acquire  real  or  personal  property,  and  in  particular  lands,  oil  wells,  refin- 
eries, mines,  mining  riglits,  minerals,  ores,  buildings,  machinery,  plants,  stores, 
licenses,  concessions,  rights  of  way,  light  or  water  rights,  and  any  rights  or  privi- 
leges which  may  seem  to  the  directors  convenient  with  reference  to  the  business  of 
the  company,  and,  whether  for  the  purpose  of  resale,  realization,  or  otherwise,  to 
manage,  develop,  lease,  mortgage,  or  otherwise  deal  with  the  whole  or  any  part  of 
such  property  or  rights.  To  prospect,  explore,  develop,  maintain,  and  carry  on  all 
or  any  lands,  wells,  mines  or  mining  rights,  minerals,  ores,  works,  or  other  proper- 
ties from  time  to  time  in  the  possession  of  the  company  in  any  number  deemed 
desirable ;  to  erect  all  necessary  or  convenient  refineries,  mills,  works,  machinery, 
laboratories,  workshops,  dwelling-houses  for  workmen  and  others  and  other  build- 
ings, works,  and  appliances,  and  to  aid  or  subscribe  towards  or  subsidize  any  such 
objects.  To  clear,  plat  for  town-site  purposes,  manage,  farm,  cultivate,  ])Iant,  and 
otherwise  exploit,  work,  or  improve  any  land  which  or  any  interest  in  which  may 
belong  to  the  company;  and  to  deal  with  or  otherwise  turn  to  account  any  farm 
or  other  products  of  any  such  laiul.  To  construct,  purchase,  lease,  or  otherwise 
acquire,  maintain,  and  operate  private  railways,  tramways,  wagon  roads,  j)rivate 
telegraph  and  telephone  lines.  To  carry  on  business  as'  merchants,  shipowners, 
builders,  or  contractors  ;  to  acquire  by  grant,  ])urcliase,  or  otherwise  concessions  of 
any  property  or  privileges  from  any  government  or  from  any  authority,  individual, 
municipal,  or  otherwise,  and  to  perform  and  fulfil  the  conditions  thereof.  To  carry 
on  in  all  its  branches  any  kind  of  manufacturing  and  trading  business.  To  buy, 
sell,  and  deal  in  generally  all  kinds  of  manufactured  products.  To  acquire  by  pur- 
chase or  otherwise,  under  franchise  or  grant,  all  or  any  rights  or  privileges'  here- 
tofore granted  or  hereafter  to  be  granted  by  any  country,  state,  or  city,  foreign 
or  domestic. 

To  generally  trade  in,  store,  carry,  and  transport  all  kinds  of  goods,  wares,  mer- 
chandise, provisions,  and  sup])lies.  To  acquire  by  purchase  or  otherwise,  to  own, 
hold,  buy,  sell,  or  convey,  lease,  mortgage,  or  eneuml)cr  real  estate  or  other 
properly,  personal  and  mixed.  To  erect  and  construct  houses,  buildings,  ware- 
houses, and  works  of  every  description  on  any  land  of  the  company  aequircd  by 
purchase,  lease,  or  otherwise. 

To  buy,  sell,  or  otherwise  acquire,  import,  export,  and  generally  deal  in  all 
kinds  of  agricultural  machinery;  without  the  State  of  ,  to  acquire,  construct, 

maintain,  own,  and  opfratc  water  works,  and  to  supply  municipalities,  corpora- 
tions, and  individuals  with  water  and  wat('r  power;  also  to  aefpiirc,  erect,  maintain, 
and  construct  any  and  all  necessary  dams,  buildings,  plant.s,  inaehinery,  fixtures,  and 
apparatus  of  every  .sort  for  supnlying  municipalities,  ror|)on(ti()ns,  and  iiulividuals 
with  water  and  water  pf)Wcr  for  all  [>urposeH,  and  to  carry  on  any  b\isiness  ineidcntjil 
thereto,  including  the  |)urpose  of  aeqnirini;,  const rueling,  maintaining,  and  (»i)cr,iting 
water  works,  pumping  stations,  and  conduits  thereto  a|)pertaininp  witli()ut  tlie  State 
of  ,  and  in  any  foreign  country.  State,  or  uninieipality ;  also  to  supply  the  citi- 

zens and  inhabitants  thereof  and  tiie  corporations  located  and  transacting  business 

419 


INCOUrOKATION    AND    OUGANIZATTON    OP    COIU'OUATIONS. 

therein  with  water  and  water  power  for  doniestie,  nieeli.niieal,  jmblie,  and  fire  or  ir- 
ris^ation  purposes,  with  ])ower  to  aeqiiire,  liold,  U'usc,  and  convey  real  and  ]u>rsonal 
estate  tor  the  business  of  tlio  cor|K)i'ation,  and  to  aequirc,  hold,  own,  possess,  and 
convev  franeliis("s  and  pjrants  from  foreign  governmental,  State,  or  mnnieipal  authori- 
ties for  supplying  cities,  villages,  and  towns  or  citlier,  and  the  inhabitants  thereof 
with  water  for  all  purposes;  also  to  carry  on  the  business  of  oj)erating  water 
works,  and  to  acquire  and  own  stock  and  bonds  of  other  cor|iorations  organized  for 
like  ]Hirposes,  and  to  acquire,  own,  hold,  and  possess  all  such  other  personal  prop- 
erty as  may  be  suitable  or  convenient  for  the  business  of  the  company,  with  the 
right  to  issue  bonds  and  secure  the  same  by  mortgage  of  the  franchises,  rights,  con- 
tracts, and  property  of  the  corporation,  real  and  ])ersonal,  and  to  issue  common  or 
preferred  stock,  and  to  do  all  and  everything  necessary,  suitable,  or  i)roper  for  the 
accomplishment  of  any  of  the  purposes  or  tlie  attainment  of  any  of  the  objects  here- 
inbefore ennineratcd  which  shall  at  any  time  a])pcar  for  the  benefit  of  the  cor- 
poration ;  ami  in  general  to  carry  on  any  other  business,  whether  mannfaeturing  or 
otherwise,  whicli  may  seem  to  the  corporation  capable  of  being  conveniently  car- 
ried on  in  connection  with  the  above  or  calculated  to  enhance  the  value  or  render 
profitable  any  of  the  c(n-porat ion's  projierty  or  rights. 

AVithout  the  State  of  and  in  any  foreign  country.  State,  or  municipality 

to  acquire  water  by  grant,  purchase,  development,  or  otherwise,  and  in  connection 
therewith  to  furnish  and  sell  water  to  corporations,  public  and  private  manufac- 
tories, and  individuals  for  lire  protection,  manufacturing,  domestic  and  irrigation 
purposes,  and  to  collect  payments  or  rentals  for  the  same. 

To  exercise  without  the  State  of  and  within  any  foreign  country,  State, 

or  municipality,  the  right  of  eminent  domain,  and  in  the  lawful  exercise  thereof  to 
condemn  for  use  by  said  comi)any,  its  successors  or  assigns,  lands,  tenements, 
hereditaments,  and  watercourses  for  the  piirjiose  of  constructing  thereon  artificial 
water  ways,  irrigation  and  canal  ditches,  aqueducts,  dams,  reservoirs,  tanks,  stand- 
pipes,  pumping  stations,  pumping  houses,  water  works,  hydrants,  mains,  pijie  lines, 
gates,  and  valves. 

In  connection  with  the  power  to  exercise  the  right  of  eminent  domain  as  here- 
inbefore provided,  said  lands,  tenements,  hereditaments,  and  watercourses  shall, 
subject  to  the  consent  and  approval  of  the  State,  country,  or  municipality  wherein 
the  said  right  of  eminent  domain  shall  be  exercised,  be  condemned  and  its  value 
assessed  by  a  board  of  commissioners  appointed  by  said  foreign  country,  State, 
or  municipality  acting  jointly  with  a  like  commission  appointed  by  the  board 
of  directors  of  this  company.  In  case  the  two  commissions  cannot  for  any  reason 
agree,  an  arbitrator  shall  be  appointed  by  the  mutual  consent  of  such  foreign  State, 
country,  or  municipality  and  by  the  company,  whose  decision  shall  be  final  and  con- 
clusive upon  both  parties  to  the  arbitration. 

Without  the  State  of  ,  subject  to  the  approval  and  consent  of  the  govern- 

ment, State,  or  municipality  wherein  the  rights  hereinbefore  provided  shall  be 
exercised,  the  company  shall  have  the  right  to  make  such  rules  and  regulations 
governing  the  distribution  of  water  and  fixing  the  prices  for  water  distribution  as 
shall  be  deemed  by  it  from  time  to  time  necessary  and  proper  in  the  premises; 
such  rules  when  filed  with  the  proper  authorities  of  the  State,  county,  or  municipality 
to  become  law. 

Without  the  State  of  and  subject  to  the  approval  and  consent  of  the 

government.  State,  or  municipality  wherein  the  rights  hereinbefore  provided  for  shall 
be  exercised,  the  company  shall  have  the  right  to  make  such  rules  and  regulations 
for  the  collection  of  debts  due  the  company  from  corporations,  public  or  ])rivate, 
and  from  individuals  when  the  same  shall  have  been  incurred  for  water  furnished 
by  said  company  to  any  such  corporation  or  individuals  for  the  use  and  benefit  of 
real  estate  owned  or  leased  by  them  :  such  rules  to  provide  by  and  with  the  consent 
of  the  State,  government,  or  municipality  that  the  same  shall  be  and  become  a  first 
lien  against  such  real  estate  just  above  referred  to. 

Without  the  State  of  said  Company  shall  have  the  power  and  in  any 

foreign  country,  State,  or  municipality  wherein  it  installs  water  works  to  accept 

420 


FORMS   AND   PRECEDENTS. 

such  guaranties  from  foreign  municipalities  as  to  tlie  water  of  such  consumption 
municipalities  as  the  company  shall  require  in  the  premises. 

The  coiupauy  shall  have  the  right  to  accept  subsidies  from  foreign  governments, 
States,  or  municipalities,  and  siiall  have  the  riglit  to  organize  sub-coinpanies  for  any 
purpose  or  purposes  authorized  by  law.  Tlie  said  company  shall  have  the  right 
without  the  State  of  and  without  the  United  States  and  in  any  foreign  coun- 

try, by  and  with  the  consent  of  the  governmeni  of  said  country,  to  import  all  materi- 
als used  in  the  construction  of  plants  erected  by  it,  and  to  import  the  same  free 
from  all  governmental  dues  and  taritis  of  said  foreign  country,  provided  said  materi- 
als cannot  be  purchased  therein  at  prices  offered  in  of'vr  countries. 

Tlie  eompany  shall  have  the  right  to  sell,  assign,  a,  a  .  ransfer  to  any  corporation 
or  individual  any  or  all  of  its  property  upon  the  consent  of  two-thirds  of  its  stock- 
holders lirst  obtaiued  at  a  meeting  duly  called  for  that  purpose,  said  sale,  assignment, 
and  transfer  to  include,  if  the  company  so  elect,  any  right,  grant,  franchise,  and 
privilege  at  any  time  bestowed  upon  said  company  by  any  government,  State,  or 
municipality,  foreign  or  domestic. 

FORM  94.  — FREIGHT  AGENTS. 

To  engage  in  the  business  of  acting  as  freight  agents  for  the  purpose  of  ship- 
ping, transporting,  and  forwarding  goods,  wares,  and  merchandise  by  land  or  by 
water. 

FORM  95.  —  FRUIT  COMPANY. 

To  buy,  sell,  imjiort,  export,  and  generally  deal  in  fruits  and  fruit  products. 
To  buy,  sell,  lease,  or  otherwise  acquire,  mortgage,  sell,  or  otherwise  dis])Ose 
of  real  estate  to  any  amount  not  limited  by  law.  To  engage  in  the  cultivation, 
planting,  and  production  of  fruits  and  agricultural  products.  To  prepare  and 
manufacture  fruit  and  vegetable  products  and  kindred  goods  of  every  class 
and  description. 

FORM  96.  —  FRUIT  PLANTATION. 

To  plant,  cultivate,  giow,  buy,  sell,  import,  export,  and  generally  deal  in  oranges, 
lemons,  limes,  pineapples,  dates,  iigs,  and  all  other  kinds  of  tropical  fruits.  Also 
to  plant,  cultivate,  grow,  sell,  export,  and  import  all  kinds  of  vegetables  and  berries. 
Also  to  operate  and  maintain  packing  houses  and  canning  factories  for  the  packing 
and  canning  of  fruits,  vegetables,  and  berries  of  all  kinds. 

FORM   97.  —  FUEL-SAVING  MACHINES. 

To  manufacture,  buy,  sell,  lease,  or  otherwise  acrjuirc  and  generally  deal  in 
amoke-preveutiug  and  fuel-saving  mechanical  and  electrical  apparatus  and  devices. 

FORM  98.  —  FURNITURE. 

To  manufacture,  prepare,  produce,  sell,  import,  export,  lease,  and  generally  deal 
in  furniture  for  domestic  and  business  uses.  ALso  to  buy,  sell,  imjxjrt,  export,  and 
generally  deal  in  furnishings  of  every  class  and  description. 

FORM  99.  — GARBAGE  MACHINERY. 

To  maiHifaeturr,  l)uy,  sell,  import,  export,  and  generally  deal  in  street  cleaning, 
garbage,  snow  removal  wagons  and  carts  and  all  kinds  of  machinery,  apparatus,  and 
appliances  connected  witii  the  cleaning  of  streets,  walks,  areas,  platforms,  the 
sprinkling  of  streets,  and  the  removal  of  garbage. 

FORM  100.  — GAS. 

To  manufacture,  store,  sell,  distribute,  and  supply  gas,  and  to  operate  a  gas 
plant  at  .     Also  to  construct  works  for  liolding,  receiving,  and  distributing 

gas.      Also  to  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  gas 

421 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

motors,   {>i]H^s,   stoves,  burners,  ongiiios,  and  other  appliances  and  conveniences 
uecessar)'  for  the  business  of  the  company. 

FORM   101.  — GAS  ENGINES,   BURNERS,   ETC. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  gas  generators 
and  burners,  hjdro-carbon  burners,  incandeseent  and  gasolene  lamps,  gas  and  gaso- 
lene engines,  and  any  and  all  machines,  articles,  and  devices  for  producing  and 
utdizing  heat  and  power. 

FORM  102.  —  GINNERIES. 

To  erect,  maintain,  purchase,  or  otherwise  acquire,  operate,  and  maintain  cotton 
seed  oil  mills  and  ginneries.  Also,  in  connection  therewith  to  produce  cotton-seed 
oil.  To  t)uy  and  sell  cotton  seed ;  to  manufacture,  buy,  sell,  export,  import,  and 
generally  deal  in  cotton  seed  oil,  and  the  products  and  by-products  of  cotton  seed. 
Also  to  manipulate  and  compound  cotton-seed  oil  with  other  substances,  so  as  to 
make  fertiUzers  to  be  sold  for  fertilizing  land.  Also  to  gin  and  compress  cotton 
into  bales  for  marketing  purposes  or  otherwise. 

FORM  103.  — GLASS. 

To  manufacture,  export,  import,  and  generally  deal  in  window,  plate,  and  colored 
glass  of  all  kinds  and  descriptions.  Also  to  manufacture,  buy,  sell,  export,  ini|)ort, 
and  generally  deal  in  table  glass  ware,  vases,  and  glass  ware  of  all  kinds  and  descrip- 
tions. Also  to  manufacture,  buy,  and  import  such  crude  materials  as  are  necessary 
or  convenient  for  the  manufacture  of  glass  or  glass  ware. 

FORM   104. -GOLD  AND  SILVER  WARE. 

To  manufacture,  buy,  sell,  export;  import,  and  generally  deal  in  gold  and  silver 
ware,  both  solid  and  plated,  of  all  classes  and  descriptions.  A.lso  to  manufacture, 
buy,  sell,  export,  import,  and  generally  deal  in  novelties,  glass  ware,  and  fine  cut- 
lery, leather  goods,  and  carved  goods  of  all  classes  and  descriptions. 

FORM   105.  —  GRAPHITE. 

To  manufacture,  purify,  prepare,  export,  import,  buy,  sell,  and  generally  deal  in 
graphite  and  carbon  of  all  classes  and  descriptions.  Also  to  engage  in  the  business 
of  manufacturing,  buying,  selling,  exporting,  and  generally  dealing  in  paints,  elec- 
trotyping,  and  kindred  lines  of  business. 

FORM   106.  —  HARDWARE. 

To  engage  in  business  as  jobbers  and  retailers  of  hardware  of  all  kinds  and 
descriptions.  Also  to  buy,  sell,  export,  import,  and  generally  deal  in  railway,  steam- 
boat, manufacturers',  mill,  j)lumbers',  miners',  blacksmiths',  steam  fitters',  and  gas 
fitters'  supplies.  Also  to  buy,  sell,  export,  import,  and  generally  deal  in  sheet  iron, 
tools,  cutlery,  saddlery,  and  saddlers'  goods,  round  and  bar  iron,  bar  and  tool  steel, 
guns,  and  sporting  goods  of  all  kinds  and  descriptions. 

FORM  107.  — HOTEL   COMPANY. 

To  build,  erect,  construct,  lease,  or  otherwise  acquire,  manage,  occupy,  maintain, 
and  operate  buildings  for  hotel  purposes,  dwelling  houses,  apartment  houses,  office 
buildings,  and  other  structures.  To  buy,  own,  operate,  lease,  and  occupy  lauds, 
buildings  for  hotels,  apartment  houses,  dwelling  houses,  office  buildings,  and  busi- 
ness structures  of  all  kinds  for  the  accommodation  of  the  public  and  of  individuals. 
To  keep,  manage,  conduct,  and  operate  liotels,  apartment  houses,  dwelling  houses, 
restaurants,  lunch  and  tea  rooms,  barber  shops,  billiard  halls,  cafes,  and  bars,  for  the 
accommodation  of  the  public  and  of  individuals. 

422 


FORMS   AND   PRECEDENTS. 


FORM   108. —  ICK 


To  manufacture,  sell,  buy,  export,  import,  and  generally  deal  in  machinery, 
tools,  and  devices  of  every  character  and  description  for  the  cutting  or  manufacture 
of  ice.  To  purchase  chemicals  for  the  manufacture  of  artificial  ice.  To  erect,  build, 
purciiase,  lease,  or  otherwise  acquire  suitable  land  and  plants  for  the  manufacture 
and  storage  of  ice.  To  engage  in  the  business  of  wholesaling  aud  retaiUng  ice  to 
middlemen  and  consumers. 

FORM   109.  —  INSPECTION  OF  ELEVATORS. 

To  engage  in  the  business  of  inspecting  aud  repairing  freight  and  passenger  ele- 
vators in  office  buildings,  business  blocks,  stores,  warehouses,  hotels,  and  apartment 
houses,  for  the  protection  of  the  owners  or  lessees  or  for  insurance  companies  en- 
gaged in  the  business  of  guaranteeing  owners  or  their  lessees  against  accidents  in 
tbe  operation  of  such  freight  and  passenger  elevators. 

FORM  110.  — INSURANCE. 

To  carry  on  the  general  business  of  insurers  of  persons  and  property,  including 
thereunder  the  transaction  of  a  general  life,  fire,  marine,  casualty,  plate  glass,  bur- 
glary, aud  guaranty  insurance  business. 

FORM  111.  —  IN  VESTMENT. 

To  issue  shares  of  stock,  debenture  stock,  bonds,  and  other  obligations,  to  invest 
money  in,  and  to  hold,  sell,  and  deliver  any  stock,  shares,  bonds,  debentures,  deben- 
ture stock,  and  securities  of  any  government.  State,  corporation,  —  jiublic  or  private, 
—  or  other  body  corporate  or  otherwise.  To  vary  the  investments  of  the  company, 
to  make  advances  upon  money  held  in  trust ;  to  issue  on  com  nission,  sell,  or  dispose 
of  any  and  all  tlie  classes  of  investments  hereinbefore  enumerated,  or  to  act  as  agents 
or  \)roker9  in  connection  therewith. 

FORM  112.  — IRON  AND   STEEL 

To  purchase,  lease,  or  otherwise  acquire  lands  in  any  jiart  of  the  world  for  the 
purpose  of  prospecting  for  iron,  coal,  and  other  ores.  To  mine  or  otherwise  to  re- 
move from  such  lauds  iron,  coal,  and  such  other  minerals  as  may  be  found  thereon. 
To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  iron,  steel,  manganese, 
coke,  and  coal.  To  sell  and  generally  deal  at  wholesale  and  retail,  in  iron,  steel, 
manganese,  coal,  coke,  stone,  asphaltum,  wood,  lumber,  and  other  materials  aud 
the  products  thereof. 

FORM  113. -LAMPS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  kerosene,  elec- 
tric, and  gas  lamps,  burners,  aud  fixtures,  and  devices  of  all  kinds  and  descriptions. 

FORM  114.  — LAND  AND  DEVELOPMENT  COMPANY. 

To  acquire  by  [)urcha3e,  Ifase,  own,  liold,  sell,  mortgage,  or  cnninilx^r  both  im- 
proved or  unimproved  real  estate  wherever  situat<!(l;  to  surviiy,  subdivide,  plat,  and 
improve  the  same  for  purposes  of  sale  or  otherwise;  also  to  construct,  erect,  and 
jperatc  thereon  houses,  buildings,  light  and  |)ower  |)lants,  marhinery,  and  appli- 
ances;  to  erect,  construct,  operate,  and  maintain  teh-grapli  and  telephone  lines;  to 
furnish  water  ))ower  and  electricity  for  power  and  ligliling  purposes;  to  construct, 
operate,  and  maintaiu  roadways,  tramways,  and  railways. 

FORM  115. -LAUNDRY. 

To  build,  erect,  purchase,  lease,  equip,  or  otherwise  arquire  n  suitable  plant  for 
the  purp)8e  of  carrying  on  a  general  steam  and  liand  laundry  business.     Also  to 

123 


INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

laundor,  color,  ilyc,  disinfect,  moiul,  clean,  renovate,  and  prepare  for  use  personal 
wearing  apparel/household  linen,  curtains,  clothing,  carpets,  rugs,  and  faorics  of 
all  kinds. 

FORM   116.  — LEAD  COMPANY. 

To  purchase,  lease,  or  otherwise  acquire,  to  own,  develop,  and  sell  lands  be- 
lieved to  contain  lead  and  other  minerals;  also  to  construct,  operate,  and  carry  on 
works  for  snieltiug,  parting,  relining,  or  working  lead  or  other  metals. 

FORM   117.  -  LEATHER. 

To  mannfaetnre,  purchase,  export,  import,  sell,  and  generally  d°al  in  leather 
and  all  products  thereof;  also  to  buy  and  sell  lands,  timber,  bark,  lumber,  and 
leather,  both  raw  and  manufactured,  and  all  kinds  of  leather  belling. 

FORM  118.  — LIGHT  AJSTD  HEAT. 

To  manufacture,  distribute,  and  sell  to  public  aud  private  consumera  electric, 
gas,  and  oil  machines,  appliances,  and  devices  suitable  for  the  production  of  light, 
heat,  and  power. 

FORM  119.  —  LOCOMOBILES. 

To  manufacture,  construct,  purchase,  or  otherwise  acquire,  deal  in,  sell,  hire, 
lease,  >ise,  repair,  operate,  and  maintain  automobiles,  locomobiles,  autocyclcs,  and 
motor  vehicles,  wagons,  carriages  and  stages  of  every  kind  aud  character  whatso- 
ever ;  also  all  parts,  devices,  and  instruments,  ajjpliauces,  engines,  maciiinery,  and 
tilings  adapted  for  use  in  the  construction  of,  u])on,  or  in  connection  with  or  iu  the 
operation  of  such  automobiles,  locomobiles,  autocyclcs,  wagons,  carriages,  stages, 
aud  motor  vehicles  of  every  kind  and  character  whatsoever ;  also  generating  and 
propelling  apparatus,  motive  power  and  machinery  therefor. 

FORM  120.  — LUMBER  AND  NURSERY. 

To  purchase,  lease,  or  otherwise  acquire  real  or  personal  property  of  every  class 
and  description ;  to  raise,  produce,  buy,  sell,  exchange,  and  deal  in  trees,  plants, 
shrubs,  cereals,  and  any  and  all  kinds  of  vegetable  ])roducts.  To  do  a  general  nur- 
sery business.  To  grow  and  j)roduce  ti-ees  and  timber  suitable  for  manufacture 
into  lumber.  To  manufacture  luml)er,  shingles,  laths,  staves,  boxes,  aud  barrels. 
To  buy,  lease,  or  otiierwise  acquire,  maintain,  aud  operate  saw-mills  and  lumber 
yards. 

FORM  121.  —  MACHINERY. 

To  manufacture,  export,  import,  buy,  sell,  and  generally  deal  in  manufacturers', 
builders',  and  mill  supplies,  engines,  machinery,  aud  appliances ;  to  manufacture, 
buy,  sell,  export,  import,  aud  generally  deal  in  machinery  of  all  kinds,  classes,  and 
description. 

FORM  122.  —  MAGAZINES. 

To  prepare  for  publication,  print,  electrotype,  bind,  sell,  and  distribute  maga- 
zines, newspapers,  books,  aud  publications  of  every  class  and  description,  and  to 
engage  generally  in  the  business  of  job  and  book  printers,  bookbinders,  engravers, 
and  electrotypers. 

FORM   123.  —  MANGANESE,   ETC. 

To  carry  on  the  business  of  mining,  milling,  concentrating,  converting,  smelting, 
treating,  preparing  for  market,  manufacturing,  buying,  selling,  exchanging,  and 
otherwise  producing  and  dealing  in  manganese,  copper,  lead,  zinc,  brass,  iron,  steel, 
and  in  all  kinds  of  ores,  metals,  and  minerals,  and  in  the  products  and  by-products 
thereof  of  every  kind  and  description  ;  aud  by  whatsoever  process  the  same  can  be 
or  may  hereafter  be  produced,  and  generally  and  without  limit  as  to  amount,  to  buy, 
sell,  exchange,  lease,  acquire,  and  deal  in  lands,  mines,  and  mineral  rights  and  claims, 
and  in  the  above  specified  products,  and  to  conduct  all  business  appurtenant  thereto. 

424 


FORMS    AND    PRECEDENTS. 


FORM  124.  —  MANUFACTURING. 


To  purchase,  lease,  or  otherwise  acquire  lands  and  buildings  for  the  erectiou  and 
establishment  of  manufactories  and  workshops  with  suitable  j)lants,  engines,  and  ma- 
chinery. To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  machinery 
of  all  classes  and  descriptions. 

FORM  125.  — MATCHES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  friction  and 
safety  matclies  of  all  kinds,  classes,  and  description.  Also  to  manufacture,  sell, 
import,  export,  and  generally  deal  iu  boxes  and  receptacles  for  packing  and  ship- 
ping matches. 

FORM  126. —MECHANICAL  ENGINEERS. 

To  carry  on  the  business  of  mechanical  engineers  in  all  its  various  branches ; 
also  to  manufacture  engines,  dynamos,  implements,  rolhng-stock,  and  hardware  of 
all  kinds,;  also  to  engage  in  business  as  tool  makers,  brass  founders,  mill  workers, 
boiler  makers,  millwrights,  machinists,  manufacturers  of  iron  and  steel  couiprcssors, 
merchants,  electrical,  civil,  and  water-supply  engineers. 

FORM  127. —MEDICAL   COLLEGE. 

To  build,  construct,  buy,  lease,  or  otherwise  acquire,  equip,  maintain,  and  con- 
duct a  college  for  the  purpose  of  giving  instruction  and  courses  of  study  in  medi- 
cine, materia  niedica,  clinics,  therajjeutics,  surgery,  and  pathology,  aud  iu  connectiou 
with  the  foregoing  to  maintain  clinics,  dispensaries,  and  hospitals ;  to  issue  to  those 
who  have  pursued  such  courses  of  instruction  therein  as  entitle  them  to  the  same, 
and  to  sucli  as  have  duly  completed  such  courses  the  degree  of  Doctor  of  Medi- 
cine (M.D).  Also  the  granting  of  diplomas  to  those  who  liave  not  completed 
the  courses  necessary  to  obtain  the  degree  of  "  Doctor  of  Medicine,"  showing  tlie 
completion  of  such  work  as  tliey  may  have  successfully  completed  while  iu  the 
institution. 

FORM  128.  — MEDICAL  INSTITUTE. 

To  build,  equip,  maintain,  and  operate  institutions  for  the  treatment  and  care  of 
the  sick,  young,  and  infirm.  To  furnish  massage  and  electrical  treatment  of  all  kinds  ; 
to  furnish  baths  of  all  kinds  and  descriptions;  to  operate  dispensaries,  chemical 
and  physical  laboratories;  to  furnish  instruction  in  osteopatliy,  massage,  medical 
electricity,  chiropody,  dermatology,  aud  manicuring. 

FORM   129.  —  MERCANTILE  AGENCY. 

To  establish,  maintain,  and  conduct  a  general  mercantile  agency  in  all  parts  of 
the  world,  and  in  connection  thcrewitli  to  secure,  tabulate  and  distribute  informa- 
tion, statistics,  and  facts  relating  or  affecting  tlie  business,  lial)ilities,  credit,  and 
character  of  individuals,  firms  and  corporntions  engaged  in  any  business  in  any 
part  of  the  world.  Also  to  establish,  maintain,  and  conduct  in  eonncetion  therewith 
a  collection  business  for  the  colleetion  by  presentation,  suit,  or  ntherwise  of  accounts, 
discounts,  and  obligations  of  all  kinds.  Also  to  carry  on  a  general  printing,  |)ublisli- 
ing,  bookbinding,  and  advertising  business,  and  to  prepare,  sell,  and  distribute  books, 
directories,  reports,  ratings,  and  other  matters  of  interest  to  traders,  l)ankers,  and 
business  men  generally. 

FORM   130.  -MICA. 

To  purchase,  lease,  or  otherwise  acquire  lands  suitable  for  mining  purposes,  and 
to  equip,  work,  excavate,  develop,  and  mine  flic  .same ;  to  mine,  q\iarry,  smelt, 
refine,  dress,  amalgamate,  and  |)repare  for  market  mica,  nickel,  and  laic  ores.  To 
manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  plants,  machinery, 
im|)lenirnts,  and  conveniences  required  in  connection  with  the  mining,  quarrying, 
Bmelting,  refining,  dressing  and  amalgamating  of  mica,  nickel,  aud  talc  ores. 

425 


y 


INCORPORATION    AND   ORGANIZATION    OP   CORPORATIONS. 


FORM  131. -MINING.    (Limited  powers.) 

To  prospect  for,  locate,  acquire  by  discovery,  lease,  license,  option,  purchase, 
franchise,  grant,  gift,  devise  or  otlicrwise,  liold,  jjossess,  enjoy,  develop,  mine,  work, 
operate,  and  exjdoit  mines,  mineral  lands  and  claims,  mining  rigiits,  metalliferous 
lands  and  rights  in  or  elsewhere.     Also  to  carry  on  the  business  in  all  its 

various  branches  of  mining  for  gold,  silver,  tin,  lead,  iron,  and  coal. 

FORM  132. —  MINING.    (Full  powers.) 

(To  the  objects  set  forth  in  form  131  add  the  following :) 

To  construct,  purchase,  or  otherwise  acquire,  maintain,  and  operate  tunnels, 
sluices,  reservoirs,  and  ditches  for  mining,  irrigation,  and  transportation  purposes. 
Also  to  purchase,  lease,  or  otherwise  acquire  lands,  mills,  mill  sites,  tunnel  sites, 
buildings,  maeliinery,  power  houses,  pum]Miig  plants,  pump  maclunery,  dump  rights, 
ditch  rights,  tlumes,  pipes,  pipe  hues,  privaterailways,  private  tramways,  private  roads, 
easements,  franchises,  and  Mcenses.  Also  to  purchase,  construct,  lease,  or  otherwise 
acquire,  operate,  and  maintain  electric  lighting  aud  power  plants,  buildings,  machin- 
ery, appliances,  and  equipments  appertaining  thereto.  To  purchase,  construct,  lease, 
or  otherwise  acquire,  operate,  and  maintain  telegraph  and  telephone  lines  for  the 
transmission  of  messages  and  sound  by  electricity.  To  furnish  gas,  water,  elec- 
tricity, power,  heat,  and  light  for  mining,  milling,  agricultural,  domestic,  and  other 
uses  and  purposes,  and  to  sell,  lease,  or  dispose  of  the  same  to  sucli  ])ersons  or  cor- 
porations, aud  for  such  price  or  prices  and  ou  such  terms  and  conditions  as  to  this 
corporation  may  seem  proper.  To  develop,  sell,  store,  contract  for,  and  generally 
deal  in  and  dispose  of  to  such  persons  or  corporations,  and  for  such  price  or  prices 
and  on  such  terms  and  conditions  as  to  this  cor])oration  may  seem  proper,  electri- 
cal and  other  power  for  the  genevatiou,  distribution,  and  supply  of  electricity  for 
mining,  heating,  and  power  purposes.  To  purchase,  lease,  or  otherwise  acquire, 
construct,  and  maintain  plants  for  the  purpose  of  extracting  values  from  refractory 
ores.  To  purchase,  treat,  refine,  extract,  reduce,  crush,  calcine,  smelt,  concentrate, 
and  manipulate  all  kinds  of  ores,  minerals,  and  metaUiferous  substances  with  a  view 
to  obtaining  therefrom  gold,  silver,  tin,  lead,  copper,  iron,  and  other  metals,  combi- 
nation of  metals,  or  other  valuable  substances  with  a  view  to  preparing  the  same  for 
market.  Generally  to  engage  in  smelting,  reducing,  crushing,  refining,  milling,  treat- 
ing, assaying,  and  seUing  minerals  and  ores  of  all  kinds,  classes,  and  descriptions. 
To  buy,  sell,  manufacture,  aud  generally  deal  in  machinery,  blasting  powder,  and 
high  explosives  of  every  description,  fuses,  caps,  implements,  caudles,  and  con- 
veniences suitable  for  use  in  connection  with  mining  and  metallurgical  operations. 
To  purchase,  lease,  or  otherwise  acquire  lands  for  the  purpose  of  erecting  thereon 
office  buildings,  plants,  workshops,  dwelling  houses,  warehouses,  stores,  hotels,  and 
other  buildings  in  connection  with  the  foregoing  purposes. 

FORM  133. —  MINING  INVESTMENTS. 

To  invest  in,  take  over,  buy,  sell,  pledge,  and  exchange  stock,  shares,  bonds, 
and  securities  of  mining  companies,  whether  incorporated  under  the  laws  of  the 
several  commonwealths  or  under  the  laws  of  any  foreign  country  ;  to  make  advances 
upon,  hold  in  trust,  buy  and  sell  on  commission,  sell  or  dispose  of  any  of  the 
investments  aforesaid,  or  to  act  as  auditor  for  any  of  the  above  or  like  purposes.  To 
hold,  purchase,  or  otherwise  acquire,  to  sell,  assign,  transfer,  mortgage,  ])ledge,  or 
otherwise  dispose  of  shares  of  the  capital  stock,  bonds,  and  securities  issued  or  created 
by  other  corporations,  and  while  the  holder  thereof  to  exercise  all  the  rights  and 

f)rivileges  of  ownership,  including  the  right  to  vote  thereon.  To  cause  or  allow  the 
egal  title,  estate,  and  interest  in  any  property  acquired,  established,  or  carried  on  by 
the  company  to  remain  or  to  be  vested  or  registered  in  the  name  of  or  carried  on  by 
any  other  company  or  companies,  foreign  or  domestic,  formed  or  to  be  formed,  and 
either  upon  trust  for  or  as  agents  or  nominees  of  this  company,  or  upon  any  other 
terms  or  conditions  wiiich  the  Board  of  Directors  may  consider  for  the  benefit  of 

426 


FORMS    AND   PRECEDENTS. 

this  company,  and  to  manage  tlie  affairs  or  take  over  and  carry  ou  the  business 
of  such  company  or  companies  so  formed  or  to  be  formed,  either  by  acquiring  the 
shares,  stocks,  or  other  securities  tiicrcof,  or  otherwise  howsoever,  and  to  exercise 
all  or  any  of  the  powers  of  holders  of  shares,  stocks,  or  securities  thereof,  and  to 
receive  and  distribute  as  profits  the  dividends  and  interest  ou  such  shares,  stocks, 
or  securities.  To  guarantee  the  payment  of  dividends  or  interest  on  any  share, 
stocks,  debentures,  or  otlier  securities  issued  by  or  any  other  contract  or  obligation 
of  any  corporation  when  in  the  judgment  of  its  directors  tlie  same  is  pro])er  or 
necessary  for  the  business  of  the  company ;  and  provided  the  required  autliority  be 
first  obtained  from  the  Board  of  Directors  for  tliat  purpose.  To  remunerate *any 
person  or  persons  or  corporation  for  services  rendered  or  to  be  rendered  in  placing 
or  assisting  to  place,  or  guaranteeing  the  placing  of  any  of  the  shares  of  the  com- 
pany's capital,  or  any  debentures  or  otlier  securities  of  the  company,  or  in  or  about 
the  formation  or  promotion  of  the  company  or  the  conduct  of  its  business. 

FORM  134. -MINING  RIGHTS. 

To  search  for,  prospect,  and  explore  for  ores  and  minerals,  and  to  locate  mining 
claims,  grounds,  or  lodes  in  the  United  States  of  America  or  the  territories  thereof, 
or  in  foreign  countries,  and  record  the  same  pursuant  to  the  mining  laws  of  the 
said  United  States  or  other  countries  ;  and  to  acquire  mining  and  nuneral  rights  or 
interest  therein  when  desirable  ;  to  mine,  quarry,  work,  and  develop  mining  grounds, 
claims,  or  lodes,  mining  and  mineral  rights  ;  to  crush,  concentrate,  smelt,  refine, 
dress,  amalgamate,  and  prepare  for  market  ores,  metals,  and  mineral  substances 
of  all  kinds,  and  to  do  all  other  acts  and  things  necessary  or  conducive  to  the 
company's  objects,  including  the  erection  of  buildings  or  works  and  the  installing 
of  maehiiiery  and  apjiliances  of  every  description  whenever  required;  to  mortgage 
any  mining  grounds,  claims,  or  lodes,  mining  and  mineral  rights,  or  other  property 
belonging  to  said  company,  and  to  issue  bonds  of  the  company  whenever  it  may 
be  determined  so  to  do.  To  purchase,  acquire  by  lease,  license,  or  otherwise  mining 
grounds,  clainis,  or  lodes,  mining  and  mineral  rights,  concessions  or  grants,  or  any 
interest  therein,  and  to  obtain  patents  therefor  wlien  desirable.  To  buy,  sell,  and 
deal  in  ores  and  minerals,  plants,  machinery,  tools,  im])lcments,  groceries,  provisions, 
clotliiug,  boots  and  shoes,  furnishing  articles,  hardware,  wooden  and  metallic  ware, 
■with  all  other  articles  and  things  in  any  wise  required  or  capable  of  being  used  in 
connection  with  mining  operations,  and  to  make  and  manufacture  such  articles 
■when  required.  To  construct,  carry  out,  maintain,  improve,  equip,  manage,  control, 
and  su])erintend  any  roads,  ways,  jirivate  railways,  private  tramways,  bridges,  reser- 
voirs, water  courses,  aqueducts,  wharves,  piers,  docks,  bulkiieads,  furnaces,  mills, 
crushing,  concentrating,  and  smelting  works,  hydraulic  works,  factories,  dwelling 
Louses,  and  warehouses ;  to  purchase  vessels  or  other  means  of  transportation, 
except  railroads  otlier  than  private  railroads,  and  equip  and  operate  the  same  as 
required  for  the  us(;s  and  purposes  of  the  company,  and  also  to  do  any  other  acts 
and  things  relating  to  mining. 

FORM   135.  —  MORTGAGE  AND  TRUST. 

To  issue,  secure,  or  offer  for  .sale  stocks,  bonds,  mortgages,  and  other  obligations  ; 
to  invest  fur  individuals  or  corporations  any  stocks,  bonds,  mortgaires,  debentures, 
and  securities  of  any  government,  state,  corporation,  —  pul)Iie  or  private,- — and  to 
vary  the  invcslments  of  the  company.  To  transfer,  register,  ami  countersign  eertid- 
catcs  of  stock,  bonds,  receipts,  or  other  evidences  of  indebtedness.  To  act  as  agent 
of  any  corporation,  domestic  or  foreign,  public  or  private.  To  act  as  Irust^-e  under 
any  deed  of  trust,  mortgage,  bond,  or  other  instrument  issued  by  any  inunici|)ality, 
body  politic  or  corporate,  person,  or  association,  and  to  aeee|)t  and  execute  any 
business  in  relation  thereto.  To  act  as  registrar  of  stocks,  bonds,  certificates,  and 
debentures,  and  as  transfer  agent  of  any  corporations  or  individuals.  To  act  as 
resident  agent  for  domestic  or  foreign  corporations.     (See  al.so  Form  202.) 

427 


INCOnrOUATION    AND    ORGANIZATION    OF   CORPORATIONS. 

FORM   136. —  MOTOR  CARS. 

To  manufacture,  l)u_v,  sell,  import,  export,  ;wul  t^'ciun-ally  deal  in  all  kinds  of 
auloniobili's,  motors,  engines,  machines,  and  all  kinds  of  macliincry  and  devices  for 
the  operation  of  steam,  electricity,  and  other  forms  of  power.  To  manufacture, 
buy,  sell,  export,  import,  and  generally  deal  in  ears,  carriages,  wagons,  engines, 
apparatus,  and  vehicles  of  every  kind  and  dcscri|)tion  for  the  trans])ortatiou  of  ])as- 
sengcrs  and  goods.  To  manufacture,  buy,  sell,  im|)ort,  export,  and  generally  deal  in 
macliinery,  machine  supplies,  and  engineering  appliances  incidental  to  the  construc- 
tion of  motor  cars. 

FORM  137.  — MOTOR  COMPANIES. 

To  mainifacture,  buy,  sail,  export,  im])ort,  and  generally  deal  in  motors  run 
and  operated  by  water,  steam,  or  electricity,  including  the  manufacturing,  buying, 
selling,  importing,  exporting,  and  generally  dealing  in  any  and  all  kinds  of  motors 
and  other  parts  and  materials  entered  into  or  used  in  the  manufacture  and  opera- 
tion of  the  same,  and  generally  to  carry  on  the  manufacturing  and  selling  of  any 
articles  or  specialties,  patented  or  otherwise,  which  can  be  carried  on  in  conjunction 
with  any  of  the  matters  aforesaid  in  or  u])on  the  })remises  of  the  eom|)aMy,  and  for  that 
purpose  to  ]iurchase,  lease,  or  otherwise  acquire  and  sell  real  aud  personal  property, 
including  all  necessary  machinery  adajjted  to  such  apparatus. 

FORM  138.  — MUSICAL  INSTRUMENTS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  musical  instru- 
ments of  all  kinds,  classes,  and  description.  Also  to  purchase,  print,  publish,  and 
sell  vocal  and  instrumental  sheet  music. 

FORM   139.  —  NEWSPAPERS. 

To  engage  in  business  as  proprietors  aud  publishers  of  newspapers  to  be  printed 
at  the  City  of  State  of  and  to  be  known  as  "  ," 

and  in  connection  therewith  to  carry  on  the  business  of  job  printing,  engravers, 
publishers,  lithographers  and  electrotypers. 

FORM   140.  — NICKEL. 

To  prospect  for,  acquire,  lease,  and  develop  lands  containing  or  believed  to  con- 
tain nickel  and  other  ores,  coal,  or  oil.  Also  to  mine,  mill,  reduce,  smelt,  manu- 
facture, and  prepare  for  market  nickel  and  other  wares  aud  all  or  any  products 
thereof. 

FORM  141.  —  NOVELTIES. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  novelties 
of  every  class  and  description,  whether  patented  or  otherwise.  To  engage  gener- 
ally in  buying,  selling  of  goods,  wares,  and  merchandise  of  every  class  and 
description. 

FORM  142. —OIL  AND  PETROLEUM. 

To  locate,  purchase,  lease,  or  otherwise  acquire  lands,  mines,  mineral  claims, 
water  rights  and  franchises,  mill  sites,  timber  lands,  limestone  quarries,  and  particu- 
larly lands  containing  or  believed  to  contain  petroleum  and  other  oil  springs  and 
deposits;  to  carry  on  the  business  of  searching  for,  prospecting,  preparing,  ])roduc- 
ing,  refining,  piping,  storing,  transporting,  supplying,  buying,  selling,  manufacturing, 
and  distributing  petroleum  and  other  oils  and  their  ))roducts  and  by-products.  To 
construct,  build,  operate,  and  maintain  oil  wells,  refineries,  buildings,  machinery, 
plants,  stores,  and  warehouses.  To  handle,  store,  transport,  and  i)reparc  for  market 
oils  and  oil  products  and  by-products,  and  to  erect,  maintain,  and  operate  refineries, 
mdls,  works,  laboratories,  workshops,  and  dwelling  houses  for  workmen  aud  others. 
To  search  for,  prospect,  examine,  refine,  smelt,  reduce,  crush,  concentrate,  manijiu- 
late,  and  treat  gold,  silver,  lead,  copper,  iron,  and  minerals  of  every  class  and  descrip- 
tion.    To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  machinery, 

428 


FORMS   AND   PRECEDENTS, 

pumps,  drills,  fuses,  caps,  candles,  implements,  and  conveniences  suitable  for  use  in 
connection  with  the  oil  or  mining  business. 

FORM   143. —OIL  AND   PIPE  LINE  COMPANY. 

To  purchase,  lease,  or  otherwise  acquire  lands,  mineral  and  oil  rights  and 
privileges  in  the  State  of  .      Also  to  purchase,  lease,  or  otherwise  acquire 

in  the  State   of  and  other  parts  of  the  world,  lands  containing  or  be- 

lieved to  contain  petroleum  or  other  oil  spring  deposits.  Also  to  store  and  trans- 
port oil,  gas,  brine,  and  other  mineral  solutions,  and  to  make  reasonable  charges 
tlierefor.  To  buy,  sell,  and  furnish  oil  and  gas  for  ligliting,  heating,  and  other 
purposes.  To  lay  down,  construct,  maintain,  and  operate  pipe  lines,  tubes,  tanks, 
pump  stations,  connections,  Qxtures,  storage  houses,  and  such  maeliincry,  apparatus, 
and  devices  as  may  be  necessary  to  operate  such  pipes  and  pipe  lines  between 
various  points.  Also,  wherever  permitted  by  law,  to  have  right  and  power  to  enter 
upon  rights  of  way,  easements,  properties  of  all  persons  and  corporations,  and 

to  have  the  right  to  lay  its  pipes  and  pipe  lines  across  and  under  any  public  road,» 
railroad,  right  of  way,  street  railroad,  canal,  or  stream.  To  lay  its  pipe  and  pipe 
lines  across  and  under  any  street  or  alley  in  any  incorporated  city  or  town,  with  the 
consent  and  under  the  direction  of  the  proper  authorities  of  such  cities  or  towns. 
Also  to  carry  on  the  business  of  producing,  refining,  and  storing  petroleum  products, 
vegetable  and  mineral  oils. 

FORM  144.  — PAINTS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  paints  and 
painters'  supplies. 

FORM  145.  — PAPER. 

To  engage  in  business  as  manufacturers  and  dealers  in  paper,  and  paper  sub- 
stitutes of  all  kinds.  Also  to  buy,  sell,  export,  import,  and  generally  deal  in  wall 
paper,  wood  pulps,  and  all  kinds  of  materials  useful  or  necessary  in  the  manufacture 
of  paper. 

FORM   146.  —  PASSENGER  AND  BAGGAGE  TRANSFER. 

To  engage  in  the  business  of  transfer  for  hire  within  the  city  of 
(or  between  certain  designated  cities)  passage,  baggage,  and  freight.  Also  to 
purchase,  lease,  or  otherwise  acquire  carriages,  coupes,  hansoms,  automobiles,  bag- 
gage, express  and  mail  wagons,  carts,  and  drays.  Also  to  purciiase  horses,  barns, 
and  warehouses  in  order  to  facilitate  the  carrying  on  of  the  above  lines  of  business. 
Also  to  store  and  care  for  all  kinds  of  vehicles,  trunks,  and  personal  property  of 
every  description  in  connection  therewith.  To  operate  and  maintain  one  or  more 
barns,  warehouses,  and  storerooms. 

FORM   147. -PATENT  MEDICINES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  patent  medicines, 
formulic,  and  preparations  f)f  every  kind,  class,  and  deseri|)tion.  Also  to  carry  on 
the  business  of  chemists,  druggists,  chemical  manufacturers  and  dealers  in  phar- 
maceutical and  medicinal  preparations.  Also  to  |irci)are,  buy,  sell,  export,  inijjort, 
aud  generally  deal  in  mineral  waters,  liquors,  and  prepared  foods. 

FORM   148.  —  PATENTS. 

To  establish,  conduct,  and  carry  on  tho  business  of  buying,  selling,  and  other- 
wise dealing  in  im[)rovcmeiil9,  trade  marks,  trade  names,  niul  anv  letters  natcnt, 
registration,  or  grants,  both  domestic  and  foreign,  whether  i-ssued  by  the  UniU-d 
States  or  any  foreign  country  or  government.  To  apply  for,  procure,  and  obt.iin 
any  and  all  necessary  letters  patent  or  grants,  both  foreign  atui  domestic,  for  all 
inventions,  improvements,  and  secret  processes  for  the  account  aud  in  the  name  of 

429 


INCOUrORATION    AND    ORGANIZATION    OF    CORPORATIONS, 

tho  cor|ior;\tion,  or  as  the  ni^cwt  for  any  person,  firm,  or  corporation.  To  exploit 
and  (lovclop  ;iiiy  and  all  suoli  inventions,  iniprovcnirnts,  trade  marks,  and  i)rocosses 
1)Y  esfahlisliinir  in  this  or  any  Ibrcigu  country  any  and  ail  necessary  plants, 
factories,  and  niacliinery  for  the  manufacture  of  patent  articles  of  any  class, 
nature,  or  description. 

FORM  149.  —  PHONOGRAPHS. 

To  niannt'aetnre,  buy,  sell,  export,  import,  lease,  or  otherwise  acquire,  invest, 
and  generally  trade  in  sound-reproducinp^  machines,  talking  machines,  and  records 
for  such  machines,  and  all  appurtenances  tiiereto,  together  with  all  rights,  patents, 
and  improvements  thereon,  now  held  or  hereafter  to  be  obtained  by  purchase  or 
otherwise,  including  all  necessary  machinery  adapted  for  such  purposes. 

FORM   150.  — PHOTOGRAPHY. 

To  carry  on  a  general  photographic  business  in  all  its  various  branches  within 
the  city  of  .     To  purchase,  lease,  or   otherwise   acquire  the   necessary 

chemicals,  screens,  drugs,  cameras,  and  apparatus  for  the  taking,  developing,  and 
finishing  of  all  kinds  of  photographs.  To  purchase,  sell,  and  generally  deal  in 
cameras,  photographic  supplies,  pictures,  picture-frames,  prints,  drugs,  chemi- 
cals, and  supplies  necessary  or  useful  in  the  taking,  development,  and  printing  of 
photographs. 

FORM   151.  — PIANOS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  pianos,  organs, 
and  all  kinds  of  musical  instruments.  To  sell  and  lease  musical  instruments  and 
any  and  all  parts  thereof.  To  manufacture,  buy,  sell,  import,  export,  and  generally 
deal  in  all  kinds  of  machinery,  supplies,  implementis,  appliances,  substances,  and 
materials  incidental  to  or  entering  into  the  manufacture  of  pianos,  organs,  and 
nnisical  instruments.  To  purchase  or  otherwise  acquire  any  interest  m  and  to 
patents,  brevets  d'invention,  licenses,  concessions,  and  the  like  conferring  an  ex- 
clusive or  non-exclusive  or  limited  right  or  any  secret  or  other  information  as  to 
any  invention  in  relation  to  musical  instruments  of  any  kind. 

FORM  152.— PIPE  FOUNDRY. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  all  kinds  of  pipe 
castings  and  fittings. 

FORM  153.  —  PLANTATION  COMPANY. 

To  engage  in  the  buying,  selling,  raising,  importing,  and  exporting  of  fruit  and 
vegetable  products.  To  cultivate,  plant,  produce,  buy,  sell,  and  raise  all  kinds 
of  vegetable  products.  To  do  a  general  importing  and  exporting  business  by  and 
between  domestic  and  foreign  ports,  and  also  a  general  coastwise  business  to 
domestic  ports. 

FORM  154.  —  PLUMBERS'  SUPPLIES. 

To  manufacture,  export,  import,  buy,  sell,  and  generally  deal  in  all  kinds  of 
plumber  supplies,  including  lead,  steel,  and  copper,  pipe,  traps,  sheet  lead,  solder, 
and  iron.  Also  brass,  wood,  marble,  or  other  earthenware  material  or  supplies 
necessary  or  convenient  in  carrying  on  tiie  aforesaid  business. 

FORM  155.— POTTERY. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  all  kinds  of 
pottery,  tile,  and  earthen  products. 

430 


FORMS   AND   PRECEDENTS. 


FORM  156.  —  POULTRY. 

To  engage  in  the  business  of  raising,  selling,  and  preparing  for  market  all 
poultry  and  eggs.  To  purchase,  lease,  or  otiierwise  acquire  land,  buildings,  and 
necessary  equipment  for  tlie  carrying  on  of  tlie  aforesaid  business.  To  buy  and 
sell  chicken  food  and  incubators.  To  buy,  sell,  import,  export,  and  generally  deal 
in  poultry  aud  poultry  jjroducts  of  every  kind,  class,  and  description.  To  hatch, 
breed,  aud  raise,  eitlier  by  natural  means  or  incubators,  poultry  of  every  kind,  class, 
and  description.  To  buy  and  sell  ciiickeus,  ducks,  geese,  aud  guinea-fowls.  To 
priut,  publish,  and  distribute  magazines  and  literature  of  every  class  aud  description. 

FORM  157.  -  PUBLISHERS. 

To  engage  in  business  as  proprietors  and  publishers  of  newspapers,  journals,  and 
magazines.  To  acquire,  print,  publish,  conduct,  or  otherwise  deal  with  any  news- 
paper, magazine,  books,  or  otiier  publications  ;  to  carry  on  the  business  of  newspaper 
and  magazine  proprietors  and  publishers.  To  carry  on  the  business  of  job  printers, 
lithographers,  electrotypers,  engravers,  and  advertising  agents. 

FORM  158.  — QUARRY. 

To  acquire,  mine,  cut,  finish,  buy,  sell,  import,  export,  aud  generally  deal  in 
marble,  and  all  kinds  of  building  aud  paving  stones.  Also  to  acquire  by  purchase, 
lease,  or  otherwise  lands  believed  to  contain  marble,  building  and  paving  stone. 

FORM  159.  — RAILWAY  EQUIPMENT. 

To  buy,  lease,  or  otherwise  acquire,  construct,  maintain,  and  operate  smelters, 
rolling  mills,  carringes,  machine  sho[)s,  furnaces,  crushing  works,  aud  hydraulic 
works  of  every  class  aud  description;  to  manufacture,  buy,  sell,  import,  export, 
and  generally  deal  in  all  kinds  of  rails,  ties,  switches,  signals,  torpedoes,  fuses, 
engines,  aud  supplies  for  railroads  and  street  railways ;  to  manufacture,  buy,  import, 
export,  and  generally  deal  in  iron,  steel,  alumiuuu),  manganese,  lead,  ziuc,  tin,  cop- 
per, and  lumber. 

FORM   160.  —  REAL  ESTATE.    (City.) 

To  purchase,  lease,  or  otherwise  acquire,  sell,  and  exchange  lands,  tenements, 
and  hereditaments  situated  in  the  city  of  and  vicinity;  also  to  build,  con- 

struct, reconstruct,  alter,  furnish,  equip,  and  maintain  thereon  offices,  ajjartment 
houses,  business  blocks,  buildings,  siio|)s,  and  structures  of  all  kinds  for  others  on 
commission  or  otherwise.  Also  to  manage  business  bloeks,  apartment  houses  for 
owners,  and  to  guaranty  the  income  thereof,  and  to  collect  rents  therefrom,  aud  to 
supply  to  tenants  and  others  janitor  .service,  light,  heat,  aud  jwwer  appliances, 
messen''er  and  elevator  service  Also  to  assist  linancially  or  otherwise  wnitractors 
and  builders  engaged  in  the  business  of  huilding  or  improving  any  lands  wherever 
situated. 

FORM   161.  — REALTY. 

To  buy,  sell,  exchange,  and  generally  deal  in  real  properties,  improved  and 
unini|)roved,  office  buildings,  store  buildings,  dwelling  hou.ses,  barns,  wharves, 
watiu'  ritchts  aud  j)rivileges;  to  build,  eonslruet,  operate,  maintain,  lease,  and  sell 
dwelling  houses,  apartment  houses,  and  business  blocks  of  all  kinds  ami  description. 
To  nuiinlain  a  general  n-al  esfale  aj^ency  and  broker's  busiin'ss,  including  the  right 
to  manage  estates,  to  act.  as  agent,  broker,  or  attorney  in  I'ael  lor  any  ix-rson  or  eiu'- 
poration  ;  to  make  and  oi)l.iin  loans  upon  real  estate,  improved  or  uunnproved,  and 
to  supervise,  man.age,  and  protect  .sneli  jiroperfy  ami  loans,  and  all  interests  and 
claims  atTecting  the  .same;  to  have  the  same  insured  against  fire  aud  other  casual- 
ties; to  investigate  the  credit,,  fiuaneial  solvency  and  sufficiency  of  Ijorrowers, 
mortgagors,  and  sureties  uj)ou  bonds,  mortgages,  and  undertakings.     To  improve, 

431 


INCOUrORATION    AND    ORGANIZATION    OF   CORPOIIATIONS. 

iimiiago,  operate,  soil,  mortgage,  lease,  or  otherwise  dispose  of  any  property,  real 
or  pel-soual,  ami  take  mortgages  and  assignments  of  mortgages  upon  tlic  same. 

FORM   162.  -  REDUCTION  COMPANY. 

To  buy,  lease,  or  otherwise  acquire,  constrnet,  maintain,  and  operate  plants  of 
every  nature  and  descrii)tion,  for  the  purpose  of  extracting  refractory  ores  and 
minerals  of  every  description. 

FORM  163.  —  REFINERIES. 

To  buy,  lease,  or  otherwise  acquire  lands  contaiuiug  or  believed  to  contain 
petrolenmj  natural  gas,  oil  springs,  or  mineral  deposits  ;  to  carry  on  the  l)usiiicsp  of 
producing,  refining,  storing,  supplying,  and  distril)uting  petroleum  ])roducts  of  all 
classes  and  description;  to  reline,"  store,  distribute,  and  sell  vegetable  and  mineral 
oils;  to  purchase  or  otherwise  acquire,  lease,  construct,  operate,  and  maintain 
refineries,  mill  works,  laboratories,  pipe  lines,  storage  tanks,_  dwelling  houses  for 
workmen  and  others  in  couuectiou  with  the  purposes  hereinbefore  set  forth. 

FORM  164.  —  RESTAURANTS. 

To  purchase,  lease,  own,  and  operate  restaurants  and  lunch  stands  in  the  city 
of  .     Also  to  buy  and  sell  cigars  and  liquors. 

FORM   165. —RUBBER  COMPANY. 

To  acquire  by  purchase,  lease,  exchange,  or  otherwise  lands,  tenements,  here- 
ditaments, and  property  of  every  class  and  description,  for  the  planting,  cultivation, 
and  growing  of  rubber  trees,  and  for  the  purpose  of  producing,  buying,  exporting, 
importing,  selling,  and  generally  dealing  in  rubber,  and  the  articles  and  goods  of 
all  kinds  of  which  rubber  is  a  component  part,  together  with  the  various  materials 
which  enter  into  the  manufacture  of  such  goods.  To  carry  on  the  business  of 
planters.  To  purchase,  or  otherwise  acquire,  manufacture,  prepare  for  market, 
export,  import,  and  sell  any  products  or  by-products  of  rubber,  and  to  sell,  dispose 
of,  and  generally  deal  in  the  same,  either  in  their  prepared,  manufactured,  or  raw 
state,  both  at  wholesale  and  retail. 

FORM   166.  — SALT. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  salt  and  the 
products  thereof.  Also"^  to  acquire  by  purchase,  lease,  or  otherwise  lands  believed 
to  contain  salt  and  other  minerals. 

FORM  167.  —  SANITARIUMS. 

To  build,  construct,  purchase,  lease,  or  otherwise  acquire,  equip,  and  maintain 
"^sanitariums  for  the   treatment  and  care  of  the  sick,  disabled,  and  infirm.     To  main- 
tain  in  connection  therewith  dispensaries,  hotels,  and  training  schools  for  nurses. 

FORM  168.  — SAUCES  AND  PICKLES. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  sauces,  catsups, 
relishes,  pickles,  and  garnishing  sup])lies  ;  to  buy,  lease,  or  otherwise  acquire, 
construct,  maintain,  and  operate  sauce  and  pickle  factories,  cold-storage  receptacles, 
warehouses,  and  depots.  To  raise  vegetables  and  fruits  of  all  classes  and 
descriptions. 

FORM  169.  —  SAW-MILLS. 

To  purchase,  lease,  or  otherwise  acquire  timl)er-lands,  tracts,  and  rights.  To 
buy,  sell,  export,  import,  boom,  saw,  and  prepare  for  market,  and  generally  deal  in 
timber  and  wood  of  all  kinds.  Also  to  manufacture,  l)uy,  sell,  export,  import,  and 
generally  deal  in  all  kinds  of  goods  and  articles  manufactured  from  wood,  and 
generally  to  carry  on  business  as  saw-mill  proprietors,  timber  and  lumber  dealers. 

432 


FORMS   AND   PRECEDENTS. 


FORM  170.  —  SCALING. 


To  scale  steam  boilers,  bilges,  water  tanks,  and  kindred  articles  ;  to  clean  and 
furnish  shafts  and  tunnels  ;  to  build  wells  and  kindred  articles,  and  to  do  all  kinds 
of  repair  work  ;  to  build,  repair,  own,  buy,  and  sell  scaling  works  and  shops  of 
every  nature  and  description  ;  to  manufacture,  buy,  sell,  import,  export,  and  gen- 
erally deal  iu  engines,  boilers,  shop  machinery,  fixtures,  and  supplies,  aud  all  kinds 
of  heavy  hardware. 

FORM  171.  -  SEPARATORS. 

To  manufacture,  buy,  sell,  import,  export,  and  geuerally  deal  in  separating 
machines  of  all  kinds,  classes,  and  description  ;  to  buy,  lease,  or  otherwise  acquire, 
construct,  operate,  aud  maintain  factories,  workshops,  warehouses,  aud  depots 
for  the  manufacture  of  separating  machines. 

FORM  172.— SEWING  MACHINES. 

To  manufacture,  buy,  sell,  import,  export,  aud  generally  deal  iu  sewing  ma- 
chines of  all  kinds,  aud  all  tools  and  appliances  appertaining  thereto. 

FORM  173. -SHEEP. 

To  carry  on  in  all  its  branches  a  general  live  stock  aud  stock  raising  farm  and 
range  business ;  to  buy,  sell,  breed,  raise,  export,  import,  and  generally  deal  in 
sheep,  cattle,  horses,  poultry,  and  all  kinds  of  domestic  animals.  To  buy,  lease,  or 
otherwise  acquire,  construct,  maintain,  and  operate  slaughter-houses,  factories, 
stock  yards,  aud  to  carry  on  a  dairy  business  in  all  its  several  branches. 

FORM   174. -SHIP  BUILDING. 

To  build,  prepare,  operate,  sell,  and  charter  steamships,  sailing  vessels,  boats,  and 
canoes  of  all  kinds,  together  with  all  ajipliances  and  macliinery  entering  into  or 
convenient  for  the  construction  or  operation  of  the  same.  Also  to  manufacture,  buy, 
sell,  export,  import,  and  generally  deal  in  ropes,  cables,  windlasses,  capstans,  tackle, 
and  tarpaulins  of  all  kinds  and  descriptions. 

FORM  175.  — SILK. 

To  manufacture,  produce,  export,  import,  buy,  sell,  and  generally  deal  in  silk 
and  otlier  fabrics  ;  to  raise  silkworms  and  cocoons,  and  deal  in  each  and  all  of  the 
products  thereof;  to  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in 
cocoon  yarn,  thread,  and  other  like  material,  and  to  spin,  weave,  and  handle  the 
same  and  deal  with  other  fabrics.  To  plant,  raise,  buy,  and  sell  cotton  plants  and 
convert  the  same  into  fabrics.  To  plant  and  raise  mulberry  trees  and  other  silk- 
worm foods. 

FORM   176. —  SLATE   AND   TILE. 

To  manufacture,  buy,  sell,  ex|)orl,  import,  and  generally  deal  in  slate,  stone,  tile, 
brick,  marble,  and  building  materials  of  all  kinds  and  descriptions. 

FORM  177.—  SLAUGHTER-HOUSES. 

To  raise  and  purciiasc  cattle,  hogs,  and  sheep  for  the  pur|)ose  of  fattening  tlie 
same  for  food  [)urposes.  Also  to  carry  on  the  busines.s  of  m.iuilainiiig  and  operat- 
ing slaughter-liou.scs  for  the  purpose  of  .slaughtering  cutlle,  hogs,  and  sheen. 
To  operate  and  maintain  stock  yards,  cold-storage  jOant,  and  warehouses,  'lo 
buy  and  sell  hay,  oal.s,  bran,  corn,  alfalfa  and  other  grains,  grasses,  and  cereals. 
Also  to  engage  in  the  manufacture  and  jjroductiou  of  hides,  oil,  glue,  aud  animal 
fertilizers  of  all  kinds  aud  descriptions. 

28  433 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 


FORM  178. -SLOT  MACHINES. 

To  manufacture,  buy,  sell,  iinjiort,  export,  aiul  generally  deal  in  slot  machines  of 
whatsoever  name  and  nature;  to  niaiiulacture,  l)uy,  sell,  import,  export,  and  gcn- 
cn»lly  deal  in  all  articles,  ajijiaratus,  ])lants,  and  machinery  usel'ul  in  or  which  may 
be  used  in  couuectiou  with  the  foregoing  described  business  or  any  of  its  branches. 

FORM  179.  — SOAP. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  soap  for  toilet 
and  domestic  use.  Also  to  purchase  all  materials  suitable  or  necessary  for  the 
proper  manufacture  of  soap. 

FORM  180.  -  STATIONARY  ENGINES. 

To  manufacture,  coustruet,  purchase,  or  otherwise  acquire,  deal  in,  sell,  hire, 
lease,  use,  repair,  operate,  and  maintain  stationary  engines  and  engines  or  power 
applying  macliinery  and  devices  of  any  and  every  character,  and  any  and  all  parts, 
devices,  aiipliances,  instruments,  and  things  ada])ted  for  use  in  the  construction 
of,  upon,  or  in  connection  with  or  in  the  operation  of  such  stationary  engines  and 
engines  or  power  applying  machinery  and  devices  of  any  and  every  character. 

FORM  181.  — STATIONERS. 

To  engage  iu  business  as  stationers,  printers,  electrotypers,  lithographers, 
engravers,  bookbinders,  booksellers,  and  paper  dealers. 

FORM  182.  —  STEAMBOATS. 

To  buy,  lease,  or  otherwise  acquire,  construct,  maintain,  and  operate  steamboats 
and  other  vessels  of  any  class;  to  establish  and  maintain  lines  of  regular  service  of 
steamboats  and  other  vessels  to  be  employed  in  inland  or  coastwise  service  iu  the 
United  States  and  between  the  ports  of  the  United  States  and  foreign  countries. 
To  carry  on  the  business  of  shipowners,  and  to  enter  into  contracts  for  the  carriage 
of  mails,  passengers,  goods,  and  merchandise  by  any  means,  either  by  its  own  vessels, 
railways,  or  conveniences  or  by  or  over  the  vessels,  railways,  or  conveniences  of 
others.  To  insure  against  loss  by  fire,  flood,  or  other  calamity  the  cargo  carried 
or  transported  upon  the  company's  steamboats  or  other  vessels,  and  upon  such 
steamboats  and  vessels  themselves.  To  buy,  lease,  or  otherwise  acquire,  construct, 
maintain,  and  operate  wharves,  piers,  docks,  warehouses,  and  depots;  to  manufac- 
ture, buy,  sell,  and  generally  deal  in  all  kinds  of  materials,  articles,  machinery, 
engines,  boilers,  and  furniture  entered  into  or  suitable  or  convenient  for  the  con- 
struction, equipment,  and  operation  of  steamboats  and  other  vessels;  to  design, 
construct,  and  repair  vessels,  ships,  boats,  wharves,  docks,  dry  docks,  and  piers. 
To  carry  on  the  business  of  cold-storage  warehouse  and  any  business  incidental  or 
impliedly  incidental  thereto.  To  issue  certificates,  negotiable  or  otherwise,  to  per- 
sons warehousing  goods  with  the  corporation,  and  to  make  advances  or  loans  upon 
the  security  of  such  goods  or  otherwise. 

FORM  183.  — STEEL  LATH  AND  FIREPROOFING  COMPANY. 

To  manufacture,  sell,  import,  export,  and  generally  deal  in  all  kinds  of  sheet- 
steel  lath  suitable  for  the  fireproofing  of  buddings  and  structures  of  every  kind 
and  description;  to  manufacture,  sell,  import,  export,  and  generally  deal  in  sheet 
iron  and  steel  of  all  kinds  and  descri|)tion;  to  carry  on  the  business  of  contractors 
and  builders  in  all  the  various  branches  of  said  business. 

FORM   184.  —  STEEL  MANUFACTURE.    (Part  of  charter  of  U.  S.  Steel 

Corporation.) 

To  mine,  prepare  for  market,  and  tiansport  coal,  iron,  steel,  and  all  mineral  sub- 
stances.    To  manufacture,  buy,  sell,  deal  iu  and  deal  with  iron,  steel,  copper,  mau- 

434 


FORMS   AND   PRECEDENTS. 

ganese,  lumber,  and  other  materials,  and  all  or  any  articles  consisting  or  partly 
consisting  of  iron,  steel,  copper,  wood,  or  other  materials,  and  all  or  any  products 
thereof.  To  acquire,  own,  lease,  occupy,  use,  and  develop  any  lauds  containing  coal 
or  iron,  manganese,  stones,  or  other  ores  or  oil,  and  any  woodlands  or  other  lands  for 
any  purpose  of  the  company.  To  mine  or  otherwise  extract  or  remove  coal,  ore, 
stone,  and  other  minerals  and  timber  from  any  lands  owned,  acquired,  leased,  or 
occupied  by  tlie  company,  or  from  any  otlier  lands.  To  buy',  sell,  or  otherwise  deal 
or  tratiic  in  iron,  steel,  manganese,  copper,  stone,  ores,  coal,  coke,  wood,  lumber, 
and  other  materials  and  any  of  the  products  tliereof,  and  any  articles  consisting  or 
partly  consisting  thereof.  To  promote,  construct,  divide,  acquire,  approve,  manage, 
develop,  control,  lake  on  lease  or  agreement,  sell  and  use,  work  and  dispose  of  any 
roads,  sidings,  private  railways,  pipe  lines,  wharves,  docks,  bridges,  reservoirs, 
canals,  water  courses,  hydraulic  works,  gas  works,  electrical  works,  mills,  foundries, 
furnaces,  warehouses,  ships,  buildings,  buildings  for  employees  and  others,  and  other 
works  and  appliances.  To  construct,  lease,  own,  operate,  and  sell  transportation 
rights  by  land  or  water  in  any  State  or  country  subject  to  the  laws  thereof,  either 
directly  or  through  tlie  ownership  of  stock  in  any  corporation.  To  manufacture, 
purchase,  lease,  acquire,  and  own  goods,  wares,  and  merchandise  and  personal 
property  of  every  class  and  description.  To  hold,  own,  sell,  and  otherwise  dispose 
of,  trade,  deal  in,  and  deal  with  the  same.  To  acquire  and  undertake  the  good 
■will,  property,  rights,  franchises,  and  assets  of  every  kind  and  the  liabilities  of  any 
person,  firm,  or  association,  either  wholly  or  partly,  and  to  pay  for  the  same  in  cash, 
stock,  or  bonds  of  the  company  or  otherwise.  To  the  extent  permitted  by  the 
local  laws  of  any  State  or  foreign  country  where  the  property  may  be  situated, 
the  company  may  cause  or  allow  the  legal  title,  estate,  and  interest  in  any  property, 
or  business  acquired  or  carried  on  by  the  company  to  remain  or  be  vested  or  regis- 
tered in  the  name  of  or  carried  on  by  an  individual,  or  to  be  operated  by  another 
company  or  companies,  foreign  or  domestic,  formed  or  to  be  formed,  and  either 
upon  trust  for  or  as  agents  of  this  company  or  upon  any  other  terms  and  condi- 
tions wliicli  the  board  of  directors  may  consider  for  the  benefit  of  this  company, 
to  manage  the  affairs  so  taken  over.  To  carry  on  the  business  of  such  com|)any  or 
compjinies  so  formed  or  to  be  formed,  either  by  acquiring  the  stock  or  other  secu- 
rities thereof,  ana  acnuire  all  or  any  of  the  powers  of  holders  of  shares,  stock,  or 
securities  thereof,  and  receive  and  distribute  dividends  on  such  stock,  shares  and 
securities. 

FORM  185.  —  STEREOPTICON  MACHINES. 

To  manufacture,  construct,  buy,  sell,  import,  export,  and  generally  deal  in 
stereopticon  machines,  whether  automatic  or  otherwise,  of  all  kinds  ami  descrip- 
tion;  and  in  connection  therewith  to  buy,  sell,  lease,  or  otherwise  acquire  suitable 
stores,  space  in  expositions  and  fairs,  and  concessions  of  all  kinds. 

FORM   186.  —  STEVEDORES. 

To  carry  on  business  as  stevedores  in  the  city  of  and  vicinity,  and 

in  connection  therewith  to  l)uy  and  sell  trucks,  wiicelbarrows,  hoisting  machin- 
ery, apparatus,  donkey-engines,  draft  animals  and  all  kinds  of  appliances  necessary, 
uselul,  or  convenient  to  the  projicr  transaction  of  the  business  of  stevedores. 

FORM   187. —STOCK  BROKERS. 

To  buy,  sell,  ncgoliatc,  cxcliango,  i)kdge,  trade,  and  deal  in  and  with  shares, 
stocks,  debentures,  scrip,  bonds,  and  securities  of  any  government,  stale,  or  pul)lic 
or  private  corporation  or  any  corporate  body;  to  trade  and  deal  in  and  with  real 
estate,  mines,  met<als,  minerals,  and  riil,  cotton,  grain,  i)roduee,  or  other  commod- 
ities ;'to  invest  in  any  or  eitlier  of  the  foregoing,  and  trom  time  to  time  to  riiangc 
the  investments  of  tlie  company;  to  mortgage,  pledge,  or  otherwise  ciiniige  all  or 
any  part  of  the  investments  of  "the  comjiany  or  its  property  and  rights;  to  make 
advances  on,  sell  or  dispose  of,  any  property  or  iuveslmeats,  or  to  act  as  agent, 

435 


INCORPORATION    AND    ORGANIZATION    OP    CORPORATIONS. 

factor,  or  hrokor  for  aiiv  or  citlicr  of  the  corporate  purposes.  To  j)urcliasc  or  ollier- 
wise  acquire  the  capital  stock,  shares,  debentures,  scrip,  bonds,  or  otlier  evidences 
of  inilebtedness  of  any  other  corporation,  and  to  issue  in  t'xchangc  its  own  stock, 
shares,  boiuLs,  debentures,  scrip,  or  other  evidences  of  indel)tedness  in  jjavniint 
therefor,  and  while  the  owner  thereof  to  exercise  all  the  rights  of  ownership, 
including  the  power  to  vote  upon  such  stock  or  shares.  To  purchase,  receive, 
hold,  and  own  mortgages,  debentures,  sliares,  and  otlier  securities  or  obligations 
of  any  public,  private,  or  municipal  corporation,  or  bonds  or  other  securities  or 
obligations  of  the  government  of  the  United  States,  or  of  any  State,  district,  ter- 
ritory, colony,  or  dependency  of  the  United  States  or  any  foreign  country,  State, 
or  colony;  to  collect  and  receive,  disl)urse  and  disjwse  of,  all  interest,  dividends, 
accumulations,  earnings,  and  income  from,  upon,  or  on  account  of  any  bonds,  deben- 
tures, stocks,  shares,  securities,  contracts,  evidences  of  indebtedness,  ol)ligations,  or 
other  property  held  or  owned  by  the  corporation  therein ;  to  do  any  and  all  lawful 
acts  tending  to  increase  or  enhance  the  value  of  the  property  of  the  company. 
To  issue  stock,  shares,  bonds,  debentures,  certificates,  scrip,  or  other  corporate 
obligations  and  to  secure  the  payment  thereof  by  mortgage,  pledge,  or  deed  of 
trust  of  or  upon  the  whole  or  any  portion  of  the  corporate  property  or  funds ; 
to  sell,  pledge,  or  otherwise  dispose  of  bonds,  debentures,  or  other  corporate 
obligations  for  proper  and  lawful  purposes,  as  and  when  the  Board  of  Directors 
shall  deem  necessarv,  advisable,  or  expedieut;  to  promote  the  corporate  business 
of  investment  and  dealing  in  securities  in  all  lawful  ways;  and  to  receive,  col- 
lect, transmit,  ])ay  out,  and  disburse  funds  in  the  course  of  its  business;  and  to 
the  extent  authorized  by  law  to  lease,  purchase,  or  otherwise  acquire,  hold,  use, 
sell,  trade,  and  deal  in  and  with,  assign,  pleilge,  mortgage,  transfer,  and  convey 
real  and  personal  property  of  any  name  or  nature;  to  issue  and  accept  drafts, 
bills  of  exchange,  ])romissory  notes,  scrip,  drafts,  acceptances,  or  other  corporate 
obligations  and  negotiate  the  same. 

FORM   188.  — STORAGE  BATTERIES. 

To  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  electrical  stor- 
age batteries,  machineries,  and  appliances  for  the  storage  of  electricity  for  the  pur- 
poses of  furnishing  power  for  business  or  domestic  purposes. 

FORM   189.  — SUGAR  REFINERIES. 

To  plant,  cultivate,  grow,  produce,  manufacture,  buy,  sell,  exportj  import,  and 
generally  deal  in  sugar.  Also  to  purchase,  lease,  or  otherwise  acquire  sugar  lands 
and  plantations,  refineries,  buildings,  mills,  and  machinery.  To  plant,  cultivate, 
roduce,  and  raise  sugar  cane.  Also  to  carry  on  the  business  of  refining,  preparing, 
uying,  selling,  importing,  exporting,  and  generally  dealing  in  sugar  cane,  sugar 
mills,  and  syrups. 

FORM   190.  — SURGICAL  INSTRUMENTS. 

To  manufacture,  buy,  sell,  and  deal  in  surgical,  chemical,  electrical,  and  scien- 
tific instruments  and  proprietary  articles  of  every  class  and  description. 

FORM   191.  —  TAILORS. 

To  carry  on  the  business  of  tailoring  and  dealing  in  cloth  and  clothes  and  all 
kinds  of  gents'  furnishing  goods. 

FORM   192.  —  TANNERIES. 

To  construct,  build,  maintain,  operate  one  or  more  tanneries  in  the  State  of 
.     Also    to    buy,  sell,  import,  export,  and  generally  deal  in  hides, 
skins,  raw  and  finished,  and  leather  of  all  classes  and  description.     Also  to  pur- 
chase, sell,  lease,  or  otherwise  acquire  lands,  timber,  and  bark  required  for  the 
operation  of  the  aforesaid  line  of  business. 

436  ■  - 


I 


FORMS   AND    PRECEDENTS. 


FORM  193. —TAR  MANUFACTURING. 

To  purcliase,  lease,  or  otherwise  acquire  lands  for  llie  erection  and  establish- 
ment of  a  manufactory  or  manufactories  and  workshops  with  suitable  plants, 
engines,  and  niacliiuery,  with  a  view  to  manufacturing,  purchasing,  leasing,  or  other- 
wise dealing  in  coal  tar,  and  each  and  every  by-product  of  coal  tar,  utilizing  the 
same  in  any  condition,  connection,  or  form  whatsoever;  to  manufacture,  purchase, 
lease,  export,  import,  and  generally  deal  in  coal  tar  and  any  by-product  thereof, 
and  any  materials,  articles,  and  things  required  for,  or  iu  conuection  with  or 
incidental  to  the  manufacturing  thereof. 

FORM  194. —TELEGRAPH  AND  TELEPHONE  COMPANIES. 

To  acquire,  manufacture,  buy,  sell,  and  generally  deal  in  telegraph  and  tele- 
phone instruments,  macliines,  and  apparatus;  to  construct,  erect,  build,  operate, 
and  maintain  telegraph  and  telephone  stations  for  the  transmission  and  reception 
of  messages  by  electricity,  wire  or  wireless  instruments  ;  to  receive  and  transmit 
messages  by  signal  or  other  device  and  by  any  and  all  other  electrical  devices  and 
contrivances  from,  upon,  and  by  wire  or  wireless  instruments  and  any  and  all 
similar,  kindred,  and  like  instruments  and  devices  ;  to  transmit  and  receive  mes- 
sages for  liire  over,  upon,  and  by  wire  and  wireless  systems,  of  telegra))liing  and 
telephoning  by  any  and  all  systems  and  devices  for  transmitting  and  receivings 
mtssig-^s.  To  buy,  build,  or  cause  to  be  built,  operate  and  maintain  stations 
for  the  transmission  and  reception  of  telegraph  and  telephone  messages  by  means 
of  wire  or  wireless  systems  ;  to  carry  on  the  business  of  transmitting  and  receiving- 
messages  from  such  stations.  To  acquire  and  hold  lands,  property,  and  buildings 
necessary  or  useful  in  the  conduct  of  the  business  of  telegraph  and  telephone  com- 
])anies  under  wire  and  wireless  systems,  and  in  connection  therewith  to  manufac- 
ture and  construct  machinery,  instruments,  apparatus,  wires,  and  any  and  all  other 
materials  and  articles  used  with  or  pertaining  to  telegraph  and  telephone  lines. 

FORM  195.— THEATRES. 

To  construct,  purchase,  lease,  or  otherwise  acquire  theatres,  concert  halls,  and 
amusement  ])laces  of  all  kinds  and  descriptions.  Also  to  carry  on  the  business  of 
theatrical  proprietors,  and  music  hall  pronrietors.  Also  to  manage  theatrical,  concert 
liall,  and  vaudeville  comjianies  of  all  kinas,  classes,  and  description.  Also  to  engage 
and  employ  actors,  singers,  dancers,  athletic,  theatrical,  and  musical  artists  of  all 
kinds.  \  Also  to  purchase,  own,  produce,  and  present,  and  to  license  others  to  pro- 
duce and  present,  theatrical  plays,  operas,  and  cxhil)itions  of  various  kinds. 

FORM  196.  — THREAD. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  cotton,  linen, 
silk,  and  wool  threads  of  all  classes  and  description;  to  produce  cotton,  flax,  hemp, 
silk,  wool,  and  other  materials  suitable  or  convenient  for  the  manufacture  of  thread. 
Also  to  manufacture,  buy,  sell,  export,  import,  and  generally  deal  in  flax,  spools, 
bobbins,  boxes,  labels,  and  all  kinds  of  machines  and  tools  necessary  or  useful  iu 
the  manufacture  of  threads. 

FORM  197.  —  TOBACCO. 

To  plant,  grow,  cultivate,  cure,  and  manufacture  tobacco.  To  export,  import, 
and  generally  (leal  in  leaf  and  fine  cut  tobacco,  cigars,  cheroots,  and  cigarettes.  Also 
to  [jurehase,  lease,  or  otherwise  acquire,  to  con.slrurt,  mnint.ini,  and  operatr,  tobacco 
factories,  wholesale  agencies,  and  depots  for  llu^  curing,  storing,  manufacture,  and 
sale  of  tobacco,  cigars,  cheroots,  cigarettes,  and  smokers'  supplies.  Also  to  buy, 
sell,  import,  export,  and  generally  deal  in  piftes,  cigar  and  cigarette  holders,  cigar 
cutting  machines,  and  smokers'  supplies  ol  all  kinds. 

437 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 


FORM  198.  — TRADING  STAMP  COMPANY. 

To  desisjn,  luamiriicturo,  print,  and  engrave  preniimn  stamps,  tickets,  or  coupons, 
and  to  use, "sell,  or  otherwise  tlisjiose  ol"  the  same  to  merchants,  manul'acturcrs,  or  to 
anv  person,  firm,  copartnership,  or  cor])oration,  for  distribution  or  sale  by  them  to 
their  customers;  to  exchange  such  stamps,  tickets,  or  coupons  for  goods,  cliattels, 
wares,  and  merchandise;  toco-operate  and  contract  with  merchants,  manul'acturers, 
copartnerships,  corporations,  or  other  persons  for  the  purpose  of  furnishing  them 
With  prcnuum  stamps,  tickets,  or  coupons  for  their  customers,  and  to  give  them 
goods,  chattels,  wares,  and  merchandise  in  exchange  for  such  premium  stamps,  tickets, 
or  coupons;  to  carry  on  a  general  advertising  business  in  all  its  branches,  both  as 

Sriucipals  and  agents ;  to  carry  on  the  business  of  printers,  stationers,  engravers, 
esigners,  and  dealers  in  paper :  to  establish  and  conduct  a  general  store  for  the 
sale  or  exchange  of  goods,  chattels,  wares,  and  merchandise  of  any  and  every 
class  and  description. 

FORM  199.  — TRAIN  CONTROL. 

To  manufacture,  buy,  sell,  import,  export,  install,  maintain,  and  generally  deal 
in  railroad  switches,  train-controlling  devices,  signals,  and  equipment ;  to  manufac- 
ture, buv,  sell,  export,  import,  and  generally  deal  in  iron,  steel,  manganese,  coke, 
copper,  lumber,  and  all  or  any  articles  consisting  or  partly  consisting  of  iron,  steel, 
copper,  wood,  or  other  materials,  and  all  or  any  products  thereof;  to  acquire  by 
purchase  or  otherwise  land  or  buildings,  mills,  plants,  machinery,  secret  processes, 
or  other  things  found  necessary  or  convenient  for  the  purposes  of  the  company. 
To  manufacture  or  purchase,  or  both,  all  tools,  machinery,  and  appliances  necessary, 
proper,  or  convenient  for  the  carrying  on  of  the  said  business. 

FORM  200.— TRANSPORTATION  COMPANY. 

To  carry  on  the  business  of  engaging,  receiving,  transporting,  and  delivering 
merchandise  upon  freight  or  for  hire,  between  any  port  of  the  United  States  and 
any  other  port  or  ports  of  the  United  States,  or  Detween  any  foreign  port  or 
ports  and  any  port  or  ports  of  the  United  States ;  tiie  business  of  owning  or  char- 
tering vessels  tlierefor  ;  the  business  of  operating  vessels  in  such  service ;  the  busi- 
ness of  contracting  or  arranging  for  tlie  transportation  of  merchandise  to  or 
from  any  of  such  ports  by  rail,  boat,  or  otherwise,  or  to  any  inland  or  coastwise 
place  or  places.  To  enter  into  contracts  for  tlie  carriage  of  mails,  passengers, 
goods,  and  merchandise  by  any  means,  either  by  its  own  vessels,  railways,  or  con- 
veyances, or  by  or  over  the  vessels,  railways,  or  conveyances  of  others ;  to  construct, 
purchase,  and  operate  steamships  and  other  vessels  of  any  class,  and  generally  carry 
on  the  business  of  shipowners ;  to  construct  bridges,  buildings,  and  machinery, 
engines,  cars,  and  other  equipments,  railroads,  ships,  elevators,  viaducts,  canals,  and 
water  ways,  and  any  other  means  of  trans])ortation,  and  to  sell  the  same  or  other- 
wise to  dispose  tlicrcof,  or  to  maintain  and  operate  the  same.  To  gather,  receive, 
distribute,  and  deliver  goods  and  merchandise,  and  to  carry  on  a  general  trans- 
portation, freight,  and  express  business,  and  to  th<at  end  to  own  and  operate  its  own 
vessels,  cars,  and  vehicles  of  whatsoever  nature  or  description,  or  to  contract  with 
transportation,  railway,  express,  and  other  companies  for  the  use  of  their  vessels, 
cars,  and  vehicles  of  wliatsoevcr  nature  or  description,  by  this  company,  or  to  con- 
tract with  said  companies  for  the  collection,  transportation,  or  distribution  of  goods, 
wares,  and  merchandise  to  and  from  all  points  and  places  where  it  may  seem  ad- 
vantageous and  profitable  to  carry  on  such  business.  To  carry  on  the  business  of 
storage,  wharfage,  warehousing,  and  forwarding,  and  the  doing  of  every  act  or  acts, 
thing  or  things,  incidental  or  growing  out  of  or  connected  with  said  business,  in- 
cluding the  owning,  leasing,  holding,  erecting,  and  maintaining  of  docks,  bulkheads, 
piers,  basins,  and  warehouses  ;  the  storage  of  all  kinds  of  goods,  wares,  and  merchan- 
dise ;  the  storage  and  docking  of  ships,  steam  vessels,  and  boats  of  every  kind  and 
description ;  the  loading  and  unloading  thereof;  the  issue  of  storage,  dock,  and  ware- 

438 


FORMS    AND    PRECEDENTS. 

house  receipts,  negotiable  and  non-negotiable,  covering  all  kinds  of  goods,  wares,  and 
merchandise;  the  collection  and  receipt  ot  dockage,  wharfage,  and  storage  dues 
and  other  compensation  ;  the  loaning  of  money  on  the  pledge  of  goods,  wares,  and 
merchandise  and  other  property,  or  on  the  pledge  of  storage,  dock,  or  warehouse  re- 
ceipts tlierefor ;  and  the  advancing  of  freights,  duties,  lire  and  marine  insurance, 
and  liens  of  every  kind  and  nature  upon  goods,  wares,  and  merchandise  received  ou 
storage  or  for  the  purpose  of  being  warehoused. 

FORM  201.  —  TROPICAL  TRADING  COMPANY. 

To  buy,  sell,  import,  export,  manufacture,  and  generally  deal  in  timber  of  all 
kinds  and  descriptions;  to  manufacture,  prepare,  sell,  and  generally  deal  in  cabinet 
and  other  woods  ;  to  build,  maintain,  and  operate  mills,  saw-mills,  flour-mills,  and 
factories  to  be  operated  by  steam,  electricity,  or  other  power;  to  buy,  sell,  and  gen- 
erally deal  iu  lands;  to  establish,  maintain,  and  operate  plantations;  to  produce, 
manufacture,  purchase,  market,  export,  import,  and  generally  deal  in  rubber, 
chickle  gum,  tobacco,  coffee,  fruits,  grain,  live  stock,  and  any  and  all  kinds  of  trop- 
cal  and  sub-tropical  products. 

FORM  202.  —  TRUST  COMPANY. 

To  act  as  trustee  for  individuals  and  corporations,  to  receive  deposits,  issue  for- 
eign and  domestic  bills  of  exchange,  and  generally  to  engage  in  a  banking  business 
in  all  its  various  branches.  To  carry  ou  and  undertake  any  business,  undertaking, 
transaction,  or  operation  commonly  carried  on  or  undertaken  by  capitalists,  promot- 
ers, financiers,  contractors,  merchants,  commission  men  and  agents,  and  in  the  course 
of  such  business  to  draw,  accept,  endorse,  acquire,  and  sell  all  or  any  negotiable  or 
transferable  instruments  and  securities,  including  debentures,  bonds,  notes,  and  bills 
of  exciiauge.  To  sell  on  commission,  subscribe  for,  acquire,  hold,  sell,  exciiange, 
and  deal  in  shares,  stock,  bonds,  obligations,  or  securities  of  any  public  or  private 
corporation,  government,  or  municipality,  and  the  company  shall  have  express 
power  to  hold,  purchase,  or  otherwise  acquire,  to  sell,  assign,  transfer,  mortgage, 
pledge,  or  otherwise  dispose  of,  shares  of  the  capital  stock,  bonds,  debentures,  or 
other  evidences  of  indebtedness  created  by  any  corporation  or  corporations,  and 
while  the  owner  thereof  to  exercise  all  the"  rights  and  privileges  of  ownership,  in- 
cluding the  right  to  vote  thereon.  To  form,  promote,  and  assist  (inancially  or 
otherwise  companies,  syndicates,  partncrsliips,  and  associations  of  all  kinds,  and  to 
give  any  guarantee  in  connection  therewith  or  otherwise  for  the  payment  of  money, 
or  for  the  performance  of  any  obligation  or  undertakiuLC.  To  acquire,  improve,  man- 
age, work,  develop,  and  exercise  all  rights  in  respect  of,  lease,  mortgage,  sell,  dispose 
of,  turn  to  account  and  otherwise  deal  with  property  of  all  kinds,  and  in  particular 
business  concerns  and  undertakings.  To  act  as  fiscal  agent  for  persons,  firms,  and 
corporations.  To  buy  or  otherwise  acquire,  to  own,  hold,  mortgage,  pledge,  sell, 
assign,  and  transfer  or  otherwi.se  dispose  of,  and  to  invest,  trade,  and  deal  in  any 
goods,  wares,  merchandise,  and  ])roperty  of  every  class  and  description,  includ- 
ing patents  and  patent  rights,  inventions,  or  other  improvements,  trade  marks,  op- 
tions, shares,  or  rights  in  corporations,  real  property  of  any  description,  inelnding 
mines,  railroads,  and  also  bonds,  mortgages,  securities  of  any  kind  or  deseription  or 
other  evidences  of  indebtedness,  and  investments  or  investment  seeunlies  of  any 
kind  or  description  whatev(!r,  to  act  as  agent  for  the  sale  or  purehase  of  any 
of  the  same,  or  for  any  other  purpose  connected  with  any  of  the  said  above  de- 
scribed powers;  to  promote  corporate  enterprises  of  any  kind,  inebidini:  industrial 
enterprises,  railroads,  mines,  real  estate  companies,  banking  instil nt inns,  and  all 
businesses  or  enierjjrises  in  which  the  company  is  infx'rested  ;  to  endorse,  underwrite, 
or  guarantee  stock,  securities,  or  undertaking's  of  any  corporation  or  persons.  To 
raise  money  by  the  issue  of  shares  or  otherwi.se.  and  In  invest  (he  moneys  so  raised 
in  the  purehase  of,  or  othcrwisi;  fo  arqiiire  and  hold,  any  of  the  invest ments  follow- 
ing, that  is  to  say,  any  stocks,  bonds,  debentures,  shares,  scrip,  or  sernrilies  issued 
or  having  any  guarantee  by  any  goverunicut,  niunicipulily,  trust,  local  authority,  or 

439 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

other  body,  iucorporatoil  or  uiiiucnrporatod,  public  or  private,  of  tlic  United  States, 
or  luiv  st'ock,  bonds,  dobonturcs,  sliaros,  scrij),  or  seeurities  issued  or  havinuj  auy 
puanuitee  1)V  anv  cor|niraliou  or  coinj)aiiy  incorporated,  constituted,  or  carryinj^  on 
business  in  the  United  t^lates  or  elsewhere.  To  borrow  or  raise  money  by  the  issue 
or  sale  of  any  bonds,  mortgages,  debentures,  or  delx'uture  stock,  of  the  company,  and 
to  invest  any  money  so  raised  in  any  sueli  investments  as  aforesaid.  To  acquire  any 
such  investments  as  aforesaid  by  original  sul)scription,  underwriting,  ])articipatioii 
in  syndicates  or  otherwise,  and  whetlier  or  not  fully  paid  up,  and  to  make  payments 
thereon  as  called  for,  or  in  advance  of  calls  or  otherwise,  and  to  uiulerwrite  or 
subscribe  for  the  same  conditionally  or  otherwise,  cither  with  a  view  to  invest- 
ment or  for  resale  or  otherwise,  and  to  vary  the  investments  of  the  com])any  and 
generally  to  sell,  exchange,  or  otherwise  dispose  of,  deal  with,  and  turn  to  account 
any  of  the  assets  of  the  company.  To  negotiate  loans,  to  otTer  for  public  subscrip- 
tion, or  otherwise  aid  or  assist  in  placing  any  such  investments  as  aforesaid  ;  to  give 
any  guarantee  in  relation  to  any  such  investments  issued  by  or  acquired  tl'.rough 
the  comi)any  or  otherwise.  To  oiler  for  public  subscri[)tion  any  shares  or  stock  in 
the  capital,  debentures,  or  debenture  stock  or  other  securities  of,  or  otherwise  to 
establish,  promote,  or  concur  in  establishing  or  ])romoting,  any  company,  associ- 
ation, undertaking,  public  or  private  body.  To  guarantee  the  payment  of  divi- 
dends or  interest  on  any  stock,  shares,  debentures,  or  other  securities  issued  by,  or 
any  other  contract  or  obligation  of,  any  such  company,  association,  undertaking,  or 
public  or  private  body.  To  purchase,  lease,  hire,  or  otherwise  acquire  real  and  per- 
sonal property,  improved  and  unimproved,  of  every  kind  and  description,  and  to  sell, 
dispose  of,  lease,  convey,  and  mortgage  said  jn-operty,  or  any  part  thereof;  to  ac- 
quire, hold,  lease,  manage,  operate,  develop,  control,  build,  erect,  maintain  for  the 
purposes  of  said  company,  construct,  reconstruct,  or  purchase,  either  directly  or 
through  ownership  of  stock  in  any  corporation,  any  lands,  buildings,  offices,  stores, 
warehouses,  mills,  shops,  factories,  plants,  gas  houses,  machinery,  rights,  easements, 
permits,  privileges,  franchises,  and  licenses,  and  all  other  things  which  may  at  any 
time  be  necessary  or  convenient  in  the  judgment  of  the  board  of  directors  for 
the  purposes  of  the  company.  To  sell,  lease,  hire,  or  otherwise  dispose  of  the 
lands,  buildings,  or  other  property  of  the  company  or  any  part  thereof.  To  hold, 
purchase,  or  otherwise  acquire,  sell,  assign,  transfer,  mortgage,  pledge,  or  otherwise 
dispose  of,  shares  of  the  capital  stock  and  bonds,  debentures,  or  other  evidence 
of  indebtedness  created  by  any  other  corporation  or  corporations,  and  while  the 
bolder  thereof  to  exercise  all  the  rights  or  privileges  of  ownership,  including  the 
right  to  vote  thereon. 

FORM  203.  — TURBINE  ENGINES. 

To  manufacture,  construct,  purchase,  or  otherwise  acquire,  deal  hi,  export,  import, 
sell,  hire,  lease,  use,  repair,  operate,  and  maintain  ships,  vessels,  yachts,  launches, 
torpedo  boats,  tug-boats,  and  boats  and  vessels  of  any  and  every  character,  and  any 
and  all  parts,  devices,  instruments,  engines,  macliinery,  materials,  appliances,  and 
things  whatsoever  adapted  to  be  used  in  the  construction  of,  upon,  or  in  connec- 
tion'vvith  or  in  the  operation  of  ships,  vessels,  yachts,  launches,  torpedo  boats,  tug- 
boats, and  boats  and  vessels  of  any  and  every  character;  also  to  equip  such  ships, 
vessels,  yachts,  launches,  torpedo  boats,  tug-boats,  and  boats  and  vessels  of  any  and 
every  character. 

FORM  204.  — TYPESETTING  MACHINES. 

To  manufacture,  buv,  sell,  import,  export,  and  generally  deal  in  machinery  for 
the  setting  of  type,  together  with  all  tools,  implements,  and  conveniences  necessary 
or  useful  in  connection  therewith. 

FORM  205.  — TYPEWRITERS. 

To  carry  on  the  business  of  manufacturing,  buying,  selling,  leasing,  operating, 
and  distributing  writing  machines,  typewriters,  typewriter  materials,  appliances, 

440 


FORMS   AND    PRECEDENTS. 

fixtures,  and  other  materials  and  articles  connected  with  or  in  anywise  relating 
to  tlie  manufacture,  sale,  or  use  of  writing  machines  and  typewriters;  to  establish, 
maiiitain,  and  operate  manufactories,  agencies,  and  depots  for  the  manufacture,  pur- 
cliase,  sale,  exchange,  delivery,  and  distribution  of  Avriting  machines,  typewriters, 
typewriter  appliances,  and  supplies;  to  purchase,  lease,  or  otherwise  acquire,  buy, 
sell,  assign,  and  revise;  to  use  or  otherwise  dispose  of  any  patents,  inventions,  dis- 
coveries, or  rights  used  or  employed  in  the  business  of  niauut'acturing,  buying, 
selling,  or  using  of  writing  machines,  typewriters,  and  typewriter  supplies. 

FROM  206.  — VALVE  COMPANY. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  valves,  engines, 
boilers,  tools,  and  machinery  of  all  kinds,  classes,  and  description,  and  in  connection, 
therewith  to  purchase,  lease,  or  otherwise  acquire  lauds  and  buildings  for  the  erec- 
tion of  an  establishment  thereon,  and  manufactories  and  workshops  with  necessary 
plants,  engines,  machinery,  and  structures  thereon. 

FORM  207.  — VARNISH  REMOVER. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  iu  chemical  or 
other  products  or  processes  for  the  removal  of  varnish  and  kindred  products. 

FORM  208.  — WAREHOUSERS. 

To  carry  on  the  business  of  warehousing  in  all  of  its  branches ;  to  receive  on 
consignment  or  otherwise,  to  store,  sell,  and  distribute  goods  on  commission  or 
other  basis;  to  export,  import,  and  otherwise  deal  in  goods,  wares,  and  merchandise 
of  all  classes  and  description  ;  to  issue  warehouse  receipts,  certificates,  and  circulars, 
negotiable  or  otherwise,  to  persons  warehousing  goods,  wares,  or  merchandise  with 
the  company ;  to  make  advances  on  loans  by  way  of  mortgage,  pledge,  or  deposit  of 
warehouse  receipts  upon  the  security  of  the  goods,  wares,  or  merchandise  stored 
with  the  company  or  otherwise. 

FORM  209.— WATCHES,   JEWELRY,   AND   DIAMONDS. 

To  buy,  sell,  manufacture,  export,  import,  and  generally  deal  in  jewelry,  watches, 
and  diamonds;  to  buy,  lease,  or  otherwise  acnuiic,  maintain,  and  ojierate  jewelry 
stores ;  to  carry  on  the  business  of  wholesale  and  retail  dealers,  watch  manufacturers, 
and  diamond  mercliants. 

FORM  210. -WATER,  LIGHT,  POWER,  AND  TRACTION  COMPANY. 

To  purchase,  acquire,  hold,  lease,  manage,  control,  and  operate,  ami  to  sell, 
lease,  and  dispose  of  to  such  person  or  persons,  corporation  or  corporations,  and 
for  such  price  or  prices,  and  on  such  terms  and  conditions,  as  to  this  corporation 
may  seem  projjcr,  wat«r,  water  rigiits,  power,  privileges  and  iipijropriations,  for 
mining,  milling,  agricultural,  domestic,  and  other  uses  and  i)urposes;  and  to  dc- 
velop,"control,  generally  deal  in,  and  dis|)ose  of  to  such  person  or  persons,  corjinra- 
tion  or  corporations,  and  for  such  price  or  prices,  ami  on  .sneh  terms  and  conditions 
as  to  this  corporation  may  seem  proper,  cleetriral  and  other  ))ower  for  the  generation, 
distribution,  and  supply  of  electricity  for  li?ht  and  heat,  and  for  any  f>lher  uses  and 
purposes  to  which  the  same  arc  adapted.  To  acquire,  const  met,  own,  eidartre,  main- 
tain, and  operate  water  works,  and  to  supjily  munieipnliti(rs  and  eorpnrallons  with 
water  and  water  jiower,  and  to  acquire,  enel.  maintain,  eonstruel,  and  eidarge  all 
necessary  dams.  Imildinu's,  plant,  mnchinerv,  fixtun**,  and  apparatus  of  every  sort  for 
supplvinV  munieipalilies,  corporations,  auA  individuals  with  water  and  water  power 
for  all  pu7|ioses,  and  to  carry  on  the  business  ineidcntal  thereto,  including  the  purpose 
of  acquiring,  const  rueting,  cnhrn'ui-i,  maintaining,  and  operating  water  works,  pump- 
ing slati'ins,  li:;ht  and  power  plants,  iu  any  city  or  town  iu  any  State  of  the  United 
States,  the  District  of  Columbia,  or  in  anv  part  of  the  world.     To  carry  on  the 

441 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

business  of  cloctrioiaus,  nicplianical  onj^inocrs,  manufacturers,  workers  and  dealers  in 
electricity,  motive  lunver,  lu-at,  ami  lit,'lit,  and  any  b\isiness  in  which  the  application 
of  elect ricitv  or  any  power,  like  or  otherwise,  is  or  may  be  useful,  eouveuicut,  or 
ornainenlal.'or  any  "other  business  of  a  like  nature,  and  to  nianufactun!  and  i)roducc, 
trade,  and  deal  in'and  deal  with  any  article  belonging  to  any  such  business,  and  all 
apparatus,  appliances,  and  things  used  in  connection  therewith,  or  with  any  inven- 
tions or  |)ateuts;  to  produce  and  accumulate  electricity  and  electro-motive  force,  or 
other  agency,  similar  or  otherwise,  and  to  supply  the  same  for  the  ])roduction,  trans- 
mission", or  use  of  power  for  lighting,  heating,  and  motive  ])urposes  or  otherwise  as 
may  be  thought  advisable;  to  construct,  maintain,  and  operate  works  for  the  sup- 
ply and  distribution  of  electricity  for  light,  heat,  and  power;  to  acquire  by  purchase 
or  otherwise,  to  use,  operate,  and  equip  subways,  conduits,  and  ducts,  and  to  obtain, 
accept,  and  use  all  permits,  and  also  franchises,  municipal  or  otherwise  ;  to  purchase 
or  otherwise  acquire  and  to  sell,  work,  or  otherwise  deal  with  land,  water,  water 
power,  -water  power  supplies,  equipment,  and  works;  to  undertake,  construct,  ac- 
quire, and  carry  on  works  of  all  kinds  relating  to  any  business  of  the  company,  and 
to  enter  into  such  contracts  and  make  such  arrangements  as  may  be  necessary  to 
carry  out  the  same. 

FORM  211.  — WATER  HEATERS. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  water  heaters 
for  domestic  and  business  uses,  and  in  connection  therewith  to  manufactui-e,  buy, 
sell,  import,  exjiort,  and  generally  deal  in  engines,  boilers,  water  pipes,  and  plumbers* 
supplies  of  all  classes  and  description. 

FORM  212.— WATER  WORKS. 

To  construct,  purchase,  lease,  or  otherwise  accjuire,  maintain,  operate,  andsell 
■water  works  for  the  purpose  of  supplying  manuiactories,  corporations,  and  indi- 
viduals with  water  and  water  power  for  domestic  or  business  use.  Also  to  con- 
struct, purchase,  lease,  or  otherwise  acquire,  maintain,  and  sell  all  necessary  power 
bouses,  water  towers,  water-mains  and  pipes,  convenient  for  the  carrying  on  of  the 
aforcsa'd  line  of  business. 

FORM  213.  — WEIGHING  MACHINES. 

To  manufacture,  Iniy,  sell,  import,  export,  lease,  operate,  and  generally  deal  in 
weighing  machines ;  to"  apply  for,  acquire,  by  pureliase  or  otherwjse,  patents  per- 
taining to  weighing  machines,  and  to  sell  or  lease  the  same,  togethe'r  with  territorial 
rights  in  such  patents  for  weighing  machines. 

FORM  214.  — WHARF  AND  WAREHOUSE. 

To  purchase,  lease,  or  otherwise  acquire  lands  and  riparian  rights  of  all  classes 
and  description.  Also  to  construct,  purchase,  lease,  or  otherwise  acquire  docks, 
■wharves,  piers,  warehouses,  and  public  scales. 

FORM  215.  — WOOLLEN  AND  WORSTED. 

To  manufacture,  buy,  sell,  import,  export,  and  generally  deal  in  woollen  and 
worsted  goods  and  other  fabrics  manufactured  and  sold  by  other  concerns  engaged 
in  the  same  general  hue  of  business. 

FORM  216.  — YARN  MILL. 

To  engage  in  the  business  of  manufacturers  of  yarn  goods,  and  in  connection 
therewith  to  carry  on  the  business  of  weavers,  silk  combers,  and  yarn  spinners. 
Also  to  purchase,  sell,  weave,  or  otherwise  manufacture  linen  cloths  and  other 
fabrics. 

442 


FORMS  AND   PRECEDENTS. 


FORMS  FOR  DRAWING   CHARTERS  IN   ALL 
THE   STATES  AND   TERRITORIES. 


ALABAMA. 
CERTIFICATE  OF  INCORPORATION 

OF    THE 

Company. 

Kxow  ALL  Men  by  these  Presents  :  That  we,  the  undersigned,  associate  our- 
selves togetlier  for  the  purpose  of  forming  a  corporation  under  the  laws  of  the  State 
of  Alabama,  and  do  declare 

I.  That  the  name  of  tlie  corporation  shall  be  Company  (or 
corporation). 

II.  The  objects  for  which  tlie  corporation  is  formed  are  : 

III.  The  location  of  the  principal  office  of  the  corporation  within  tLe  State  is 

IV.  The  amount  of  the  capital  stock  shall  be  dollars  (S  ),  to  be 
divided  into  sliares  of  the  par  value  of  (3  )  each.  (If 
preferred  stock  is  desired  this  clause  should  read  as  follows :  The  amount  of  the 
capital  stock  shall  be  dollars  ($  ),  of  which  shares  of  the 
par  value  of  dollars  each  shall  be  common  stock  and  shares  of 
the  par  value  of  dollars  (S  )  cacli  shall  be  preferred  stock.  The  pre- 
ferred stock  is  entitled  to  preference  and  priority  over  the  common  stock  in  manner 
following,  to  wit  :  )                                                                                   ,      •  -n 

The  amount  of  capital  stock  with  which  the  company  will  begin  business  will 
be  dollars  (8        ). 

V.  That  ,  residing  in   the  City  of  ,  County  ol 

,  State  of  Alabama,  is  hereby  designated  by  tlie  undersigned  as  com- 
missioner for  said  Company  to  receive  subscriptions  to  the  capital 
stock  thereof. 

VI.  The  names  and  post-office  addresses  of  the  incorporators  and  the  number 
of  shares  subscribed  for  by  each  are  as  follows  : 

Names.  No.  of  Shares.  Addresses. 


VII.   The  names  and  nost-office  addresses  of  the  directors  and  officers  chosen 
for  the  first  year  are  as  toUows  : 

Names.  Post-office  Addresses. 

. }  Directors. 


Officers.  Post-office  Addresses. 

President, 

Vice-President, 

Secretary, 
Treasurer, 
VIII    The  duration  of  the  company  shall  be  perpetual. 

443 


INCOKrOUATION    AND    OUUANIZATION    OF    CORPORATIONS. 

IX.  Tlio  followinc:  provisions  for  the  regulation  of  the  business  and  the  con- 
duct of  tlu'  alVairs  of  the  company  arc  hereby  cstabbslieil : 

///  Jfif/irss  iriiereof,  we  have  hereunto  set  our  hands  and  seals  this  day 

of  ,  190  . 


Signed,  scaled,  and  delivered  in  the  presence  of : 


State  of  Alabama.    \ 
County  of  )^  ' 

I,  ,  a  Notary  Public  in  and  for  the  said  County  and  State, 

do  hereby  certify  that  ,  whose  names  are  signed  to  tlie  foregoing 

instrument,  and  who  are  knoM-n  to  me,  iiave  acknowledged  before  mc  this  day  that, 
being  informed  of  the  contents  of  said  instrument,  they  have  severally  executed  the 
same  voluntarily  on  the  day  the  same  bears  date. 

Given  under  my  hand  this  day  of  ,  190    . 

,  Notary  Public, 
County, 
Alabama. 

TERRITORY  OF  ALASKA. 
ARTICLES  OF  INCORPORATION 

OF   THE 

Company. 

We,  the  undersigned,  ,  residents  of  the  District  of  , 

Territory  of  Alaska,  do  by  these  presents,  pursuant  to  and  in  conformity  with  the 
provisions  of  Section  Five  of  an  Act  of  Congress,  approved  March  2nd,  1903,  en- 
titled "  An  Act  Amending  the  Civil  Code  of  Alaska,  providing  for  the  Organization 
of  Private  Corporations  and  for  other  Purposes,"  associate  ourselves  together  as  a 
body  politic  and  corporate,  and  we  do  hereby  certify  in  writing: 

First.    The  corporate  naiii(>  and  style  of  our  said  corporation  shall  be : 

Second.    The  nature  and  character  of  the  business  to  be  carried  on  is  as  follows: 

Third.  The  principal  place  for  the  transaction  of  the  business  of  the  corpora- 
tion shall  be  at  in  the  Territory  of  Alaska. 

Fourth.  The  time  for  the  commencement  of  this  corporation  shall  be  the  date 
of  the  tiling  of  these  articles  of  incorporation  in  the  office  of  the  Secretary  of 
the  District  of  ,  Territory  of  Alaska,  and  the  termination  thereof 

shall  be  fifty  years  thereafter. 

Fifth.   The  capital  stock  of  the  corporation  shall  be 
dollars,  divided  into  shares  of  the  par  value  of  dollars  per 

share.     (Also  state  how  the  same  shall  be  paid  in.) 

Sixth.  The  highest  amount  of  indebtedness  or  liability,  direct  or  contingent,  to 
which  this  corporation  is  at  any  time  subject  shall  be  dollars. 

Senenfh.  Tlie  names  and  residences  of  the  incorporators  of  this  corporation 
are  as  follows : 

Names.  Addresses. 


Eighth.   The  affairs  of  this  corporation  shall    be    conducted  by  a  Board  of 
Directors  who  shall  be  elected  annually  by  the  stockholders.     The  names 
and  post-office  addresses  of  the  Board  of  Directors  for  the  first  year  are  : 

Names.  Addresses. 


444 


FORMS   AND    PRECEDENTS. 

Nitith.    The  auuual  meeting  of  the  stockholders  for  the  election  of  a  Board  of 
Directors  siiall  be  held  ou  the  day  of  iu  each  year,  and  the 

Board  of  Directors  so  elected  shall  hold  office  for  a  period  of  one  year. 

In  WU)iess  Whereof,  we  have  hereunto  set  our  hands  and  seals  this  dav 

of  ,  190     .  ^ 


State  of  > 

County  of  {  ^^* 

I.  ,  a  Notary  Public  in  and  for  said  County  and  State,  do  hereby 

certify  that  ,  personally  known  to  me  to  "be  the  persons  whose 

names  are  subscribed  to  the  foregoing  instrument,  appeared  before  me  this  day  is 
person,  and  acknowledged  to  me  that  they  signed,  sealed,  and  delivered  the  said 
instrument  iu  writing  as  their  free  and  voluntary  act  for  the  uses  aud  purposes 
therein  set  forth. 

Given  under  my  hand  aud  notarial  seal  this  day  of  ,  1904. 

,  Notary  Public. 

County, 
State  of 


ARIZONA 
ARTICLES  OF  INCORPORATION 

OF   THE 


Know  all  Men  by  these  Presents  :  That  we,  the  undersigned,  have  this 
day  associated  ourselves  fngether  for  the  purpose  of  forming  a  corporation,  and  for 
that  purpose  do  adopt  the  following  ciiarter  : 

First.     The  name  of  this  corporation  shall  be: 

Second.  The  names  of  the  incorporators  are  : 

Third.  The  principal  place  in  wiiich  the  business  of  the  corporation  within  the 
Territory  of  Arizona  is  to  be  transacted  is  at  County,  Arizona.     Tlie  name 

of  the  agent  in  charge  thereof,  and  upon  whom  process  may  be  served  in  any  ac- 
tion, suit,  or  proceeding  that  may  be  had  or  brought  against  the  company  in  any 
of  the  courts  of  Arizona,  is  ,  residing  at  said  City  of 

Territory  of  Arizona. 

Fourth.  Tlie  general  nature  of  the  business  in  which  this  corporation  shall 
engage  is  as  follows,  to  wit  : 

Fifth.    Tlie  authorized   amount  of  capital  stock  of  this   corporation  sliall  be 
dollars,  divided  into  shares  of  tlic  par  value  of 

dollars  each.  The  Hoard  of  Directors  may  cau.se  said  capital  stock  or  anv  part 
thereof  to  be  subscribed  or  paid  for  in  cash,  in  the  purcliase  or  excliange  or  ti'aus- 
fcr  of  real  or  personal  property  or  for  services  rendered,  and  issue  or  cause  to  bo 
issued  any  part  or  all  of  the  ca|)ital  stock  as  renuircd,  at  any  time  or  from  lime 
to  time,  anfl  when  so  issued  it  shall  \w.  fully  paid  and  non-as.scssablc,  and  in  the 
absence  of  fraud  in  the  transact if)n,  the  judgment  of  the  lioard  of  Directors  as 
to  the  value  of  the  property  purclias(!d  or  transferred  or  exchanged  or  services 
rendered  shall  bo  conclusive. 

Sixth.    The  time  of  the  commencement  of  this  corporaticin  shall  i)e  tlie  date  of 
the  filing  of  these  articles  of  incorporation  in  the  office  of  the  County  Recorder  of 
County,  Arizona,  and  termination  thereof  sliall  be  twenty-five  years 
thereafter. 

Seventh.    The  affairs  of  this  eorponition  shall  br<  rondurted  by  a  Hoard  of 
Directors,  wlio  shall  be  elected  annually  by  the  stockholders. 

445 


INCOnrORATION   AND   ORGANIZATION   OP   CORPORATIONS. 

Eighth.    Tho  amuiiil  meeting  of  the  stockholders  shall  be  held  on  the 
in  of  each  year. 

Xinth.  The  iiigluist  amount  of  indebtedness  or  liability,  direct  or  contingent, 
to  whieli  this  eoriH>ration  is  at  any  time  subject,  shall  be 

Tenth.  The  private  property  of  tlie  stockholders  of  this  corporation  shall  be 
exempt  from  corporate  debts  of  any  kind  whatever. 

Elecftith.  Among  tlie  powers  of  this  corporation  shall  be:  (r/)  To  have  per- 
petual succession.  (/;)  To  sue  and  be  sued  by  the  corporate  name,  (r)  To  have 
a  common  seal  and  alter  the  same  at  pleasure,  (r/)  To  reader  tlie  sliares  or  inter- 
ests of  stockholders  transferrable  and  prescribe  tlie  mode  of  making  such  transfers. 
{e)  To  exempt  the  ])rivate  property  of  members  from  liability  for  corporate  debts. 
(/')  To  make  contracts,  acquire  and  transfer  pro])erty,  possessing  the  same  powers 
in  such  respect  as  private  individuals  now  enjoy.  (//)  To  mortgage  all  or  any  part 
of  its  property  and  create  mortgages,  bonds,  debenture  bonds,  and  other  evidences 
of  indebtedness.  (//)  To  establish  by-laws  and  make  rules  and  regulations  deemed 
expedient  for  the  management  of  the  all'airs  of  the  corporation,  not  inconsistent 
with  the  Constitution  of  the  United  States  and  tlic  Territory  of  Arizona.  (>t)  To 
authorize  voting  by  proxy  at  all  stockholders'  meetings. 

Ill  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  this  day 

of  ,  190     . 


State  of  7  ^^ 

County  of  i 

On  this  day  of  ,  190     ,  before  nie,  a  Notary  Public,  in 

and  for  the  State  aforesaid,  residing  therein,  duly  commissioned  and  sworn,  per- 
sonally appeared  •  ,  known  to  nie  to  be  the  persons  described  in, 
and  whose  names  are  subscribed  to  the  foregoing  instrument,  and  they  acknowl- 
edged to  me  that  they  executed  the  same  for  the  purpose  and  considerations 
therein  expressed. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal  at 
my  office  in  the  said  State  aud  County,  the  day  and  year  last  above  written. 

,  Notary  Fublic. 
My  commission  expires 


ARKANSAS. 
ARTICLES  OF  AGREEMENT  AND  INCORPORATION 

OF  THE 


Know  all  Men  by  these  Presents  :  That  the  corporators  hereinafter 
named  have  this  day,  and  by  these  presents,  formed  a  corporation  under  and  in 
pursuance  of  tlu^  laws  of  the  State  of  Arkansas,  in  that  behalf  provided,  for 
"Incorporations  for  manufacturing  and  other  lawful  business,"  and  in  evidence 
thereof  do  hereby  execute  the  following  Articles  of  Incorporation : 

First.    The  name  of  said  corporation  shall  be : 

Second.    The  corj)orators  arc  : 

Third.    The  place  of  business  is  to  be  located  at  ,  and  its  office  for 

transaction  of  business  shall  be  in  or  at  such  other  place  as  tiie  Board 

of  Directors  may  select. 

Fourth.  The  general  nature  of  the  business  proposed  to  be  transacted  by  this 
corporation  is  : 

Fifih.    The  amount  of  the  capital  stock  of  said  corporation  shall  be 
dollars ;  of  which  dollars  has  been  subscribed  by  the  corporators  afore- 

s-'id,   and  the  residue  thereof  may  be  issued  and   disposed  of  as  the  Board  of 
l/iicctors  may  from  time  to  time  order  and  direct. 

446 


FORMS   AND    PRECEDENTS. 

Sixth.    The  said  capital  stock  shall  be  divided  iuto  sliares  of  the  value 

of  dollars  each. 

Secenth.  The  affairs  and  business  of  the  corporation  shall  be  conducted  and 
controlled  by  a  Board  of  Directors,  consisting  of  members,  all  of  whom 

shall  be  stockholders  of  the  corporation.  Said  Board  of  Directors  shall  elect  one 
of  its  members  as  President,  and  one  of  its  members  as  Vice-President,  and  shall 
also  elect  a  Secretary  and  Treasurer. 

Eif/hth.  The  first  election  of  Directors  shall  be  held  immediately  after  the 
organization  of  the  corporation,  and  said  Directors  shall  serve  for  one  year  and 
until  their  successors  are  elected. 

Ninth.  The  Board  of  Directors  are  empowered  to  ordain  and  establish  all 
by-laws  and  regulations  necessary  to  the  management  and  business  of  said  cor- 
poration, and  alter  and  repeal  same  at  pleasure. 

Tenth.  The  first  meeting  of  said  corporation  or  organization  shall  be  held  in 
at    the  office   of  at  o'clock  on  the  day  of 

,  190  .     The  subscribers  hereto  hereby  waive  notice  of  said  meeting. 

In  Testimony  Whereof,  we  have  hereunto  set  our  hands  on  this,  the 
day  of  ,  190  . 


CERTIFICATE. 

Whereas,  have  associated  themselves  together  as  a  body  politic 

and  corporate,  to  be  known  as  ,  and 

Whereas,  The  said  corporators,  being  the  subscribers  to  the  capital  stock  of 
the  said  corporation,  have  waived  the  fifteen  days'  notice  as  required  by  law  and 
called  a  meeting  for  organization,  to  be  held  in  at  the  office  of 

at  o'clock  on  the  day  of  ,  190  . 

Whereas,  At  tiie  time  and  place  above  set  out,  a  meeting  of  tlie  subscribers 
afores  lid  was  held  to  organize  said  corporation  and  elect  Directors  ;  and 

Whereas,  At  said  meeting  the  following  gentlemen  were  elected  Directors, 
to  wit :  ,  and 

Whereas,  At  a  meeting  of  the  said  Board  of  Directors  was 

elected   President,  and  was  elected  Vice-President,  and  was 

elected  Secretary,  and  was  elected  Treasurer  : 

Now,  Therefore,  The  said  as  President,  and  the  said 

as  President,  do,  in  i)ursuaiice  of  law,  issue  this,  their  Certificate,  verified  by  their 
oaths,  and  do  hereby  certify  as  follows : 

First.    Said  corporation  is  formed  for  the  purpose  of: 

Serond.    Its  capital  stock    is  dollars,  divided    into  shares   of 

dollars  each. 

Third.  dollars   of  capital  stock  have  been   actually  jiaid  in  by  the 

Bubscriljers   licreto. 

Fourth.  The  names  of  tlic  stockholders  and  the  number  of  shares  owned  by 
them,  respectively,  is  as  follows : 

Names.  No.  of  Shares. 


Tn  Testimony  Whereof,  the  said  ,  President  of  the  said  corpora- 

tion, and  ,  a  majority  of  the  Board  of  Directors  of  said  corporation 

have  hereunto  set  their  hands  on  this  day  of  ,  190  . 

,  President. 


Directors.  Dirrclort. 

\  17 


INCORrOUATIOX    AND    ORGANIZATION    OF    CORPORATIONS. 

State  of  Arkansas,   )  ^^ 

County  of  \ 

on  tlioir  oaths  say  that  tiic  matters  and  things  in  tlic  foregoing  certificate  set  out 
are  true,  to  the  best  of  their  knowledge  and  Ix-lief. 

(Signed) 

Subscribed  and  sworn  to  before  nie  tliis  day  of  ,  190  . 

In  Tedimony  Whereof,  I  have  hereunto  set  my  hand  and  seal  of  office. 


CALIFORNIA. 
AJITICLES   OF  INCORPORATION 

OF   THE 


Company. 


Know  all  Men  by  these  Presents  :  That  we,  (he  undersigned,  a  majority  of 
\rh()ui  arc  citizens  and  residents  of  the  State  of  California,  have  this  day  volun- 
tarilv  associated  ourselves  together  for  the  purpose  of  forming  a  corporation  under 
the  laws  of  the  State  of  California. 

And  IVe  Hereby  Certify, 

First.    That  the  name  of  said  corporation  shall  be: 

Second.    That  the  purpose  for  which  it  is  formed  is : 

Third.  That  the  place  where  the  principal  business  of  said  corporation  is  to  be 
transacted  is  : 

Fourth.    That  the  term  for  which  said  corporation  is  to  exist  is 
years,  from  and  after  tiie  date  of  its  incorporation. 

Ffth.  Tliat  the  number  of  Directors  of  said  corporation  shall  be  not  less  than 
five,  and  that  the  names  and  residences  of  Directors,  who  are  appointed  for  the  first 
year,  and  to  serve  until  the  election  and  qualification  of  their  successors,  are  as  fol- 
lows, to  wit : 

Names.  Residences. 

Sixth.   That  the  amount  of  the  capital  stock  of  said  corporation  is 
dollars,  and  the  number  of  siiares  into  which  it  is  divided  is  ,  of  the  par 

value  of  each. 

Seventh.  That  the  amount  of  said  capital  stock  which  has  been  actually 
subscribed  is  dollars,  and  the  following  are  the  names  of  the  persons 

by  whom  the  same  has  been  subscribed,  to  wit : 

Names  of  Subscribers.  No.  of  Shares.  Amount. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals,  this 
day  of  ,  A.  D.  190  . 

'  Signed  and  sealed  in  the  presence  of  


State  of 
County  of 

On  this  day  of  ,  in  the  year  A.  D.  nineteen  hundred  and  , 

before  me,  County,  personally  appeared  , 

known  to  me  to  be  the  person         whose  name         subscribed  to  and  who  executed 
the  within  instrument,  and  acknowledged  to  me  that  executed  the  same. 

In  Witness  Whereof  1  have  hereunto  set  my  hand  and  afiixed  my  Official  Seal, 
the  dav  and  year  last  above  written. 

,  Notary  Public, 

County. 

448 


FORMS   AND   PRECEDENTS. 

State  of  I  gg 

County  of  > 

I,  ,  County  Clerk  of  ,  County  of  ,  State  of  , 

do  hereby  certify  the  within  to  be  a  full,  true,  and  correct  copy  of  Articles  of  Incor- 
poration of  as  remains  on  file  in  this  ofiice. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  Official  Seal, 
this  day  of  ,  A.  D.  190  . 

,  Clerk. 
B  ,  Deputy  Clerk. 


COLORADO. 
CERTIFICATE   OF  INCORPORATION 

OF 


Knoto  all  Men   hy   these  Presents:   That   we,  residents   of  the 

State  of  ,  have  associated  ourselves  together  as  a  corporation  under  the 

name  and  style  of  "  The  Company,"  for  the  purpose  of  becoming  a 

body  politic  and  corporate,  under  and  by  virtue  of  the  laws  of  the  State  of  Colorado, 
and  in  accordance  with  the  provisions  of  the  laws  of  said  State  of  Colorado,  we  do 
hereby  make,  execute,  and  acknowledge  these  triplicate  certificates  in  writing  of 
our  intention  so  to  become  a  body  corporate  by  virtue  of  said  laws,  which  when 
filed  shall  constitute  the  articles  of  incorporation  of 

First. 
The  corporate  name  and  style  of  our  said  company  shall  be  : 

Second. 
The  objects  for  which  our  said  company  is  formed  and  incorporated  are  for 
the  following  purposes,  to  wit:    (the  statement  of  objects  must  be  very  full,  as 
under  Colorado  laws  there  cau  be  no  amendment  so  as  to  enlarge  the  corporatfc 
purposes). 

Third. 

The  capital  stock  of  said  company  is  dollars,  divided  into  shares 

of  the  par  value  of  dollars  each,  and  said  stock  shall  be  non-assessable. 

Fourth. 
Said  company  is  to  exist  for  years. 

Fifth. 
The  affairs  and  management  of  this  company  is  to  be  under  the  control  of  a 
Board  of  Directors,  and  are  hereby  selected  to  act  as 

said  Board  of  Directors,  and  to  manage  the  affairs  and  concerns  of  the  said  company 
for  the  first  year  of  its  corporate  existence. 

Sixth. 
The  operations  of  the  said  company  will  be  carried  on  in  the  County  of  ^  , 

State  of  Colorado,  and  outside  of  said  Slate  of  f 'olorado,  in  any  State  or  Territory 
of  tlie  United  States,  and  the  principal  place  of  business  and  business  office  of  said 
company  shall  be  located  in  tiic  City  of  ,  in  the  County  of  ,  and  Slate 

of  Colorado  aforesaid. 

Sctenth 

The  Board  of  Directors  shall  have  power  to  make  such  prudential  by-laws  as 
thev  mav  deem  proper  for  the  management  of  tiie  affairs  of  this  company,  according 
to  the  statute  in  such  case  made  and  provided. 

29  449 


INCOnrORATION    AND   ORGANIZATION    OP   CORPORATIONS. 

Eighth. 

Meetings  of  the  Bonrd  of  Directors  may  be  held  without  the  State  of  Colorado, 
if  the  by-laws  so  provide. 

In  Testimony  Whereof,  we  have  hereunto  set  our  hands  and  seals  this 
day  of  ,  190  .  


State  of  7  gg 

County  of  y  ' 

I,  ,  a  Notary  Public  in  and  for  said  County  and  State,  do  hereby 

certify  tliat  ,  personally  known  to  me  to  be  tlie  persons  wliose  names 

are  subscribed  to  the  foregoing  instrument,  appeared  before  me  this  day  in  person, 
and  acknowledged  that  tiiey  signed,  sealed,  and  delivered  the  said  instrument  in 
■writing  as  their  free  and  voluntary  act  for  the  uses  and  purposes  therein  set 
forth. 

Given  under  my  hand  and  notarial  seal  this  day  of  ,  190  . 

,  Notary  Public. 
My  commission  expires 


CONNECTICUT. 
CERTIFICATE  OF  INCORPORATION 

OF    THE 
. COMPANT. 


"We,  the  subscribers,  certify  that  we  do  hereby  associate  ourselves  together  as 
a  body  politic,  incorporated  under  and  by  virtue  of  the  provisions  of  the  Act  of  the 
General  Assembly  of  tlie  State  of  Connecticut,  entitled  "  A^  Act  concerning  Cor- 
porations," being  Chapter  194  of  the  Public  Acts  of  1903,  and  all  Acts  amendatory 
thereof,  and  we  further  certify 

I.  That  the  name  of  the  corporation  is  tlie  Company  (or  corporation, 
or  the  word  "  incorporated  "  if  preferred). 

II.  That  said  corporation  and  its  principal  office  and  place  of  business  is  to  be 
located  in  the  City  of  ,  County  of  ,  State  of  Connecticut. 

III.  The  nature  of  the  business  to  be  transacted  and  the  purposes  to  be  pro- 
moted are  as  follows : 

IV.  That  the  amoimt  of  the  capital  stock  of  said  corporation  hereby  authorized 
is  dollars,  divided  into  shares  of  the  par  value  of  dollars 
(8  )  each.  (If  preferred  stock  is  desired,  this  section  should  read  as  follows  : 
That  the  amount  of  the  capital  stock  of  said  corporation  hereby  authorized  is 

dollars  (?         ),  divided  into  shares  of  common  stock  of  the  par 

value  of  dollars  (•$        )  each,  and  shares  of  preferred  stock  of  the 

par  value  of  dollars  {%        )  each.     The  preferred  stock  is  entitled  to  pref- 

erence, and  priority  over  the  common  stock  in  manner  following,  to  wit:) 

V.  Tliat   said  corporation  will   commence   business    with  a   capital   stock  of 

dollars  (.?         ). 

VI.  The  duration  of  the  corporation  shall  be  perpetual. 

VII.  The  following  provisions  for  the  regulation  of  the  business  and  the  con- 
duct of  the  affairs  of  the  corporation  are  hereby  established  : 

VIII.  (Signatures  of  incorporators.) 
Name.  Residence. 

of  State  of  

of  State  of  

450 


FORMS   AND    PRECEDENTS. 

State  of  Connecticut,    } 
County  of  f  ^^• 

Personally  appeared  ,  being  all  the  incorporators  of  the 

Company,  made  solemn  oath  to  the   truth  of  the  foregoing  certificate  by  them 
respectfully  subscribed  before  me. 

,  Notary  Public, 

County, 
Conn. 
State  of  Connecticut,      ) 
Office  of  the  Secretary,  \  ^^' 

T  hereby  certify  that  the  foregoing  is  a  true  copy  of  record  of  this  office. 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  affixed  the  seal  of 
said  State  at  Hartford  this  day  of  ,  190  . 


,  Secretary. 


CERTIFICATE  OF  ORGANIZATION. 


The  undersigned,  a  majority  of  the  Directors  in  Company,  hereby 

cartify  as  follows: 

I.  That  the  amount  of  common  stock  of  the  authorized  capital  stock  of  said 
company  subscribed  for  is  dollars  (S  ).  (If  there  is  preferred 
stock,  the  following  clause  should  appear :  That  the  amount  of  capital  stock  of 
the  authorized  capital  stock  subscribed  for  is  dollars  (8        )). 

II.  That  the  amount  of  said  authorized  capital  stock  so  subscribed  for  paid 
thereon  in  cash  is  dollars  (S        ). 

III.  That  the  amount  of  the  subscribed  capital  stock  which  has  been  paid  in 
in  projjcrty  is  dollars  (S         ). 

IV.  Tlic  amount  paid  on  each  share  of  capital  stock  so  subscribed  for  which 
is  not  paid  for  in  full  is 

V.  Tlie  names,  residences,  and  addresses  of  each  of  the  original  subscribers, 
with  the  number  and  class  of  share  subscribed  for  by  each,  is  as  follows  : 

IV.  That  Directors  and  officers  of  said  corporation  have  been  duly  elected  and 
by-laws  adopted. 

Vil.  The  names,  residences,  and  post-office  addresses  of  each  of  the  officers 
and  Directors  of  said  corporation  are  as  follows : 

Directors  : 

Names.  Residences.  P.  0.  Addresses- 


Officers  : 
President, 
Vice-President, 
Secretary, 
Treasurer, 
Dated  at  this  day  of  ,  100 


a  majority  of  the  Directors. 

State  of  \  ^^ 

County  of  \' 

Personally  appeared  ,  subscribers  of  the  foregoing 

certificate  of  firganizatirm,  a  innjority  of  the  Directors  of  Com|)auy, 

and  made  solemn  oath  to  the  trulli  (if  the  same  before  mo. 

,  Notary  Puhlir. 

County, 
Connecticut. 

451 


INCORPORATION    AND    ORGANIZATION   OF    CORPORATIONS. 

DELAWARE. 
CERTIFICATE  OF  INCORPORATION. 

This  is  to  Cerlifi/,  that  tlic  undersigned  do  hereby  associate  tliemselves  to 
estabhsh  a  corporation  under  and  by  virtue  of  tlie  jjrovisions  of  an  Act  of  the 
General  Assembly  of  tlie  State  of  Dehiware,  entitled  "  An  Act  Providing  a  General 
Corporation  Law,"  and  do  severally  agree  to  take  the  number  of  shares  of  capital 
stocK  as  hereinafter  stated,  and  that 

First.    The  name  of  the  corporation  is  : 

Second.  The  i)riuci]ial  office  or  jilace  of  business  of  the  corporation  in  the 
State  of  Delaware  is  to  be  located  in  the  City  of  ,  County, 

and  said  olliee  is  to  be  registered  with  the  company. 

Third.  The  nature  of  the  business  and  the  objects  and  purposes  proposed  to 
be  transacted,  promoted,  or  carried  on  by  the  corporation  are  as  follows: 

///  General  to  carry  on  any  other  business  in  connection  therewith,  whether 
manufacturing  or  otherwise,  and  with  all  the  powers  conferred  by  the  laws  of 
Delaware  under  the  act  hereinbefore  referred  to. 

It  is  the  intention  that  the  objects  specified  in  the  third  paragraph  shall,  except 
where  otherwise  expressed  in  said  paragraph,  be  nowise  limited  or  restricted 
by  reference  to  or  inference  from  the  terms  of  any  other  clause  or  paragraph  iu 
this  charter,  but  that  the  objects  specified  in  each  of  the  clauses  of  this  paragraph 
shall  be  regarded  as  independent  objects  : 

Fourth.  The  amount  of  the  total  authorized  capital  stock  of  the  corporation  is 
dollars  divided  into  shares  of  the  par  value  of  dollars 

each.  The  amount  of  the  capital  stock  with  which  the  corporation  will  begin 
business  is  dollars. 

Fifth.  The  names  and  places  of  residence  of  the  original  subscribers  to  the 
capital  stock  are  : 

Name.  Residence.  No.  of  Shares. 

Sixth.    The  corporation  shall  have  perpetual  existence. 

Seventh.  The  officers  and  persons  by  whom  the  affairs  of  the  corporation  are 
to  be  conducted  are  its  Directors,  who  may  act  through  a  President,  Vice-President, 
Secretary,  and  Treasurer,  and  such  assistants  to  them  and  such  subordinate  officers, 
agents,  and  employees  as  may  be  selected  pursuant  to  the  By-Laws  of  the  corpora- 
tion, the  resolutions  of  said  Directors  or  authority  given  by  them. 

Directors  shall  be  elected  at  the  principal  office  or  place  of  business  of  the 
company,  at  the  annual  election  to  be  held  by  the  stockholders  on  the  day 

of  iu  each  year,  between  the  hours  of  M.  and  M. 

Eighth.  The  private  property  of  the  stockholders  shall  not  be  subject  to  the 
payment  of  corjiorate  debts. 

'  Ninth.  The  Board  of  Directors  shall  have  power,  without  the  assent  or  vote 
of  the  stockholders,  to  make,  alter,  amend,  and  repeal  the  By-Laws  of  this 
corporation,  to  authorize  and  cause  to  be  executed  mortgages  and  liens  upon  the 
real  and  personal  ])roperty  of  this  corporation. 

The  Directors  shall  from  time  to  time  determine  whether  and  to  what  extent, 
and  at  what  times  and  places,  and  under  what  conditions  the  accounts  and  books 
of  the  corporation,  or  any  of  them,  shall  be  open  to  the  inspection  of  the  stock- 
holders; and  no  stockholder  shall  have  any  right  of  inspecting  any  account  Or 
book  or  document  of  the  corporation,  except  as  conferred  by  statute  or  authorized 
by  the  Directors,  or  by  a  resolution  of  the  stockholders. 

The  Directors  shall  have  power  to  hold  their  meetings,  and  to  keep  the  books 
of  the  corporation  (except  tlie  stock  and  transfer  books  or  duplicates  thereof)  out- 
side of  this  State,  at  such  places  as  may  be  from  time  to  time  designated  by  them. 

The  corporation  may  conduct  its  business  in  the  State;  of  Delaware,  in  other 
States,  the  District  of  Columbia,  the  Territories  and  Colonies  of  the  United  States 
and  iu  foreign  countries,  and  may  have  one  or  more  offices  out  of  this  State,  and 

452 


FORMS   AND   PRECEDENTS. 

may  hold,  purchase,  mortgage,  lease,  and  couvey  real  and  personal  property  out  of 
the  State  of  Delaware. 

Witness  our  hands  aud  seals  this  day  of  ,  A.  D.  190  . 

In  the  presence  of : 


State  of  ) 

County  of  \  ^^• 

Be  It  Remembered,  that  on  this  dav  of  A.D.  190  ,  person- 

ally came  before  me,  ,  a  Notary  Public  for  the  State  of  Delaware, 

the  original  corporators  named  in  the  foregoing  certificate,  who  signed  aud  sealed 
the  same,  known  to  mc  personally  to  be  such,  aud  severally  acknowledged  the  same 
to  be  the  act  and  deed  of  the  signers  respectively,  aud  that  the  facts  therein  stated 
are  truly  set  forth. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  of  office  the  day  and 
year  aforesaid. 

(SEAL.)  ,  Kotari/  Public. 


DISTRICT    OF    COLUMBIA. 
CERTIFICATE  OF  INCORPORATION- 

We,  the  undersigned,  of  Washington,  District  of 

Columbia,  do  by  these  presents,  pursuant  to  and  in  conformity  with  the  provi- 
sions of  six  hundred  and  five  (00.5)  and  six  hundred  and  six  (006)  of  an  Act  of 
Congress,  approved  March  3nl,  1901,  entitled  "  An  Act  to  establish  a  Code  of 
Law  for  the  District  of  Columbia,"  and  with  the  amendments  thereto  made 
by  an  Act  approved  June  30tli,  1902,  entitled  "An  Act  to  amend  an  Act 
entitled  *  An  Act  to  establish  a  Code  of  Law  for  the  District  of  Columbia,' " 
associate  ourselves  together  as  a  body  politic  and  corporate,  and  we  do  hereby 
certify  in  writing : 

First.   That  the  name  of  the  company  shall  be  : 

Second.    That  the  purposes  for  which  said  corporation  is  formed  are : 

Third.    That  the  existence  of  this  company  shall  be  ])crpctual. 

Fourth.   That   the  capital  stock  of  this  company  shall  be  dollars, 

divided  into  shares  of  the  par  value  of  dollars  each. 

Fifth.  That  the  nun)bcr  of  trustees  wiio  shall  manage  the  conccnis  of  the  com- 
pany for  the  first  year  or  until  their  successors  are  elected  shall  be  , 
namely  : 

Names.  Residences. 


The  Board  of  Trustees,  by  tlin  affirmative  votf  of  a  majority  of  the  whole  Board, 
may  appoint  from  thn  Trustfies  an  Executive  (!onimiltce  of  members, 

of  which  a  maiorily  shall  coii.stitut(r  a  rpiorum,  and  to  such  extent  as  may  be  pro- 
vided in  the  by-laws,  such  eommitlrc  .shall  have  and  may  exercise  all  or  any  of 
the  powers  of  the  Board  of  Trnst<'es. 

Sixth.  That  the  place  in  the  District  of  Columbia  in  which  the  operations 
of  the  company  are  to  he  carried  on  is  at  in  the  City  of  Washiugtou, 

District  of  Columbia. 

Witness  our  hands  this  day  of  190  . 


453 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

City  of  Wasliiiii^ton,    \ 
District  ol"  Columbia,   ) 

I_  ,  a  Notary  Public  iu  and  for  the  District  of  Columbia,  do 

hereby  certify  that  ,    whose   names  are  signed  to   the 

writ  ilia:  hereto  annexed,  bearing  date  the  day  of  190  ,  personally 

ai)iH-aivd  before  nie  in  the  District  of  Columbia  on  the  day  and  year  aforesaid, 
and  separately,  severally,  and  individually  acknowledged  the  same  before  nie,  and 
that  they  severally  signed  the  same  for  the  purposes  therein  set  forth. 

Given  under  my  hand  and  notarial  seal  day  of  ,  190  . 

,  Holary  Public. 


FLORIDA. 

(Form  for  publication  of  notice  of  intention  to  apply  for  charter.) 

NOTICE  OF  INCORPORATION. 

The  undersigned   hereby   give  notice  that  on  ,   the  day  of 

,  A.  D.  190  ,  at  o'clock  M,  or  as  soon  thereafter  as  they  can 

be  heard,  they  will  apply  to   the  Honorable  ,  Governor  of  the 

State  of  Florida,  at  his  office,  in  the  Capitol  Building  of  said  State,  in  the  City  of 
Tallahassee,  for  Letters  Patent  uicorporating  them,  their  associates  and  successors, 
into  a  body  politic  and  corporate  in  deed  and  in  law,  under  the  name  of 
Company," under  the  following  Charter  and  Articles  of  Incorporation,  the  original 
of  which  will  be  on  file  iu  the  office  of  the  Secretary  of  State  of  said  State  of 
Florida,  at  the  City  of  Tallahassee,  during  the  time  required  by  law  for  the  publica- 
tion of  this  notice. 

(Names  of  incorporators.) 

Charter  of  the  Company. 

The  undersigned  hereby  agree  to  become  associated  together,  and  do  hereby 
associate  themselves  together  for  the  purpose  of  becoming  a  body  politic  and 
coi-])orate  under  the  laws  of  the  State  of  Florida,  the  provisions  of  which  are  hereby 
accepted.  The  following  Articles  of  Incorporation  shall  constitute  and  become 
its  Charter  upon  the  issuance  of  Letters  Patent  according  to  law  : 


The  name  of  this  corporation  shall  be  .     Its  principal  office  and  place 

of  business  shall  be  the  City  of  ,  County,  Florida.     Branch 

offices  may  be  established  at  such  other  places  as  may  be  selected  by  the 
Board  of  Directors. 

2. 

The  general  nature  of  the  business  to  be  transacted  by  the  said  corporation 
shall  be: 

The  amount  of  capital  stock  of  this  corporation  shall  be  _  dollars, 

divided  into  shares  of  the  par  value  of  dollar    each  :  said  capital  stock 

shall  be  paid  for  in  lawful  money  of  the  United  States,  ten  per  cent  of  which  shall 
be  paid  within  ten  days  after  Letters  Patent  shall  have  been  granted  and  before 
said  corporation  shall  transact  any  business.  The  unpaid  balances  due  on  stock  of 
the  subscribers  hereto  shall  be  paid  in  lawful  money  of  the  United  States  in  such 
instalments  and  within  such  time  as  may  be  designated  by  the  Board  of  Directors, 
provided  that  subscribers  shall  be  entitled  to  ten  days'  notice  of  dcmiand  for  such 
deferred  payments.  The  remaining  stock  shall  be  sold  by  the  Directors  from  time 
to  time,  as  the  same  may  be  needed,  at  not  less  than  its  par  value. 

454 


FORMS   AND   PRECEDENTS. 


4. 


This  corporation  shall  exist  for  a  period  of  years,  unless  sooner  dissolved 

accordint?  to  law. 


The  business  of  this  corporation  shall  be  conducted  by  a  Board  of  not  less  than 

nor  more  than  Directors. 

The  Board  of  Directors  sliall  select  from  themselves  a  President,  Vice-President, 
Secretary,  and  Treasurer.  One  person  may  hold  the  office  of  Secretary  and  Treas- 
urer. Said  Board  of  Directors  shall  have  authority  to  appoint  all  necessary  agents 
of  tills  corporation. 

Annual  meetings  of  the  stockholders  shall  be  held  at  the  principal  offices  of  the 
corporation  on  the  in  of  each  year,  at  ten  o'clock  A.  M. 

or  as  soon  thereafter  as  practicable,  at  which  the  Board  of  Directors  shall  be  duly 
elected  by  the  stockholders. 

The  By-Laws  for  the  government  of  this  corporation  shall  be  adopted  at  the 
first  annual  meeting  of  the  stockliolders,  or  as  soon  thereafter  as  practicable. 

Until  a  Board  of  Directors  shall  have  been  first  duly  chosen  by  tlie  stockholders, 
the  business  of  the  said  corporation  shall  be  conducted  by  the  following  named 
persons  and  officers  : 

,  President. 
,  Vice-President. 
,  Secretary. 
,  I'reasurer. 
Temporary  By-Laws  may  be  adopted  by  said  officers  until  the  first  annual  meet- 
ing of  the  stockholders. 

6. 

The  highest  amount  of  indebtedness  or  liability  this  corporation  shall  at  any 
time  subject  itself  is  dollars. 

7. 

The  names  and  residences  of  the  subscribers  to  tliese  Articles  of  Incorporation, 
together  with  the  amount  of  capital  subscribed  by  each,  are  as  follows: 

Names.  Residences.  No.  of  Shares. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  this  the         day  of  , 

A.  D.  190  . 

(Signatures  of  subscribers.) 
Witness  : 

State  of  Florida,  )  ^^ 
County  of  ) 

I,  ,  a  Notary  Public  for  the  State  of  Florida  at  large,  do  hereby 

certify  that  ,'wIk)  are  to  me  well  known,  this  day  appeared  liefore 

nic  and  each  for  himself  arknowlcdgcd  that  he  signed  tlie  forcgoin;,'  Articles  of 
Licorporation  and  the  accompanying  notice  for  the  uses  and  i)urposes  therein 
stated. 

Ill  Witness  Whereof,  I  have  hereunto  set  my  liand  and  seal  of  office  this 
day  of  ,  A.  b.  100  . 

,  Notary  Public. 
State  (if  Florida  at  large. 
Commission  expires 


455 


INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS. 

GEORG-IA. 

APPLICATION  FOR  CHARTER. 

Stflte  of  Georgia, 

Couutv  of  ,  To  the  Superior  Court  of  said  Comity. 

The  jiotitiou  of  respectfully  shows  : 

I.  Tliat  tlioy  desire  for  themselves,  their  assoeiutes,  successors,  and  assigns,  to 
be  constituted  a" body  corporate  under  tlie  name  and  style  of  Conij^jany, 
for  the  term  of  twenty  years  witli  tl>c  privilege  of  renewal  at  the  expiration  ol  said 
lime  as  ]irovided  by  law. 

II.  Tliev  desire  for  said  corporation  the  right  to  buy,  sell,  hold,  encumber,  and 
otherwise  dispose  of  real  and  personal  properly,  which  may  be  necessary  and  advan- 
tageous to  the  purposes  of  said  corporation,  to  sue  and  be  sued,  and  to  have  a 
common  seal,  to  receive  donations  by  gift  or  will,  to  make  by-laws  for  its  govern- 
ment, elect  directors  for  the  management  of  its  affairs  and  confer  upon  them  the 
right  to  elect  officers  and  appoint  employees,  together  with  all  other  riglits,  powers, 
and  privileges,  incident,  useful,  or  necessary  to  carry  into  cifect  the  purposes  of  the 
corporation  as  hereinafter  set  forth  or  for  securing  debts  due  it. 

III.  The  object  of  the  corporation  is  pecuniary  gain  to  its  stockholders. 

IV.  The  particular  business  proposed  to  be  carried  on  by  said  corporation  is  : 

V.  The  capital  stock  of  said  corporation  shall  be  dollars,  divided  into 

shares  of  dollars  each  ;  at  least  ten  per  cent  of  wliieli  is  to  be 

actually  paid  in  before  comnteneing  business.  But  petitioners  desire  that  said  cor- 
poration shall  have  the  right  to  increase  said  capital  stock  to  any  amount  not 
exceeding  dollars,  whenever  the  holders  of  a  majority  of  the  stock  may  so 

determine. 

VI.  The  principal  place  of  business  of  said  corporation  shall  be  in  the  City  of 

,  County  and  State  aforesaid,  but  petitioners  desire  that  said  corporation 
shall  have  the  right  to  establish  branch  offices  or  agencies  at  any  other  places,  either 
within  or  without  the  State  of  Georgia,  as  the  holders  of  a  majority  of  the  stock 
may  determine  upon. 

Wherefore  petitioners  pray  that  after  this  petition  has  been  filed  and  published 
in  accordance  with  the  law  an  order  be  passed  by  the  Court  declaring  them  a  body 
corporate  under  the  name  and  style  aforesaid,  and  granting  to  said  corporation  all 
the  right,  power,  and  privileges  set  out  and  prayed  for  in  this  application,  or  which 
may  be  incident,  usual,  and  necessary  under  tiie  laws  of  said  State,  for  the  purposes 
of  their  incorporatiou.     And  your  petitioner  will  ever  pray,  etc. 

,  Petitioner's  Attorney. 


IDAHO. 
ARTICLES  OF  INCORPORATION 

OF   TIIE 

Company. 

Know  all  Men  by  these  Presents:  That  we,  the  undersigned,  at  least  one  of 
whom  is  a  bona  fide  resident  of  the  State  of  Idaho,  have  this  day  voluntarily  as- 
sociated ourselves  together  for  the  purpose  of  forming  a  corporation  under  the  laws 
of  the  State  of  Idaho.     And  we  hereby  certify  : 

First.    That  the  name  of  the  corporation  shall  be  : 
Second.   That  the  purpose  for  wliieh  it  is  formed  shall  be : 
Third.   That  the  place  where  the  principal  business  is  to  be  transacted  is : 
Fourth.   That  the  term  for  which  it  is  to  exist  is  -  (not  to  exceed  fifty 

years)  from  and  after  the  date  of  its  incorporatiou. 

456 


FORMS   AND   PRECEDENTS. 

Fifth.   That  the  number  of  its  directors  (or  trustees)  shall  be  (a  majority 

must  be,  in  all  cases,  citizens,  and  actual  boria  fide  residents  within  the  State),  anj 
the  names  and  residences  of  those  who  arc  appoiuted  for  the  first  year  are : 

Sixth.   That  the  amount  of  the  capital  stock  of  said  corporation  is  dol- 

lars, and  the  number  of  shares  into  which  it  is  divided  is  ,  of  the  par  value 

of  dollars  each. 

Seventh.  That  the  amount  of  capital  stock  which  has  been  actually  subscribed 
is  dollars,  whicli  has  been  subscribed  by  the  following  persons  : 

Names  of  Subscribers.  No.  of  Shares.  Par  Value. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  this  dav  of 

A. D.  190  .  J  . 

Signed  and  executed  in  the  presence  of : 

State  of 
County  of 

On  this  day  of  ,  A.  D.  190  ,  before  me  persons 

appeared  ,  known  to  me  to  be  the  persons  whose  names  are  subscribed 

to  the  within  instrument,  and  acknowledged  to  me  that  they  executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  baud  and  affixed  my  Official  Seal 
the  day  and  year  in  this  certificate  first  above  written. 
(seal.) 


ILLINOIS. 

State  of  Illinois,   > 
County  of  ^ 

To  ,  Secretary  of  State : 

We,  the    undersigned,  ,  propose  to  form   a  corporation, 

under  an  Act  of  tlic  General  Assembly  of  the  State  of  Illinois,  entitled"  An  Act 
Concerning  Corporations,"  approved  April  18th,  1872,  and  all  acts  amendatory 
thereof;  and  for  the  purpose  of  such  organization  we  hereby  state  as  follows, 
to  wit : 

First.   The  name  of  sucli  corporation  is  : 

Second.    The  objects  for  which  it  is  formed  are  : 

Third.    The  capital  stock  of  the  company  sliail  bo  dollars. 

Fourth.   Tlic  amount  of  each  share  is  dollars. 

Fifth.    The  numl)er  of  shares  is 

Sixth.   The  location  of  the  principal  office  is  at  No.  Street,  in  the  Citv  of 

,  in  the  County  of  ,  State;  of  Illinois, 

Seventh.  The  duration  of  the  corporation  shall  be  (not  to  exceed  ninety-nine) 
years. 


ss. 


State  of  Illinois,    > 
County  of  j  ■   ■ 

I,  ,  a  Notary  Public  in  and  for  tlio  County  of  and  Slate 

of  Illinois,  do  hereby  certify  that  on  the  day  of  ,  190  ,  personally 

appeared  before  nie  ,  to  me  personally  known  to  be  the  same 

persons  who  executed  the  foregoing  st^itemont,  and  severally  acknowledged  that 
they  executed  the  same  for  the  purposes  therein  set  forth. 

In  Jfitne-is  Whereof,  I  have  hereunto  sot  my  hand  and  .seal  tlic  ilay  and  year 
above  written. 

,  Notiiri/  Pultlic, 
(seal.) 

457 


INCORPORATION   AND  ORGANIZATION  OF  CORPORATIONS. 

To  ... 

Secretary  of  State  of  the  State  of  Illinois  : 

The  Commissioners,  duly  authorized  to  open  Books  of  Subseription  to  the  capital 
stock  of  the  Company,  pursuant  to  license  heretofore  issued,  bear- 

ing date  the  day  of  ,  A.  D.  190  ,  do  hereby  report  that  they 

opened  Books  of  S\d)seriptiou  to  the  Capital  Stock  of  said  Company,  and  that 
the  said  stock  was  fully  subscribed  ;  that  the  following  is  a  true  copy  of  such 
subseription,  viz. : 

We.  the  undersigned,  hereby  severally  subscribe  for  the  number  of  siiares  set 
opposite  our  respective  names,  to  the  Capital  Stock  of  Company, 

aud  we  severally  agree  to  pay  the  said  Company,  for  each  share,  the  sum  of 
dollars. 

Name.  Shares.  Amount. 


That  the  aforesaid  stockholders  waived  notice  of  the  time,  place,  aud  object  of 
the   meeting  of   stockholders  herein  next  set  forth,  which  was  held  on  , 

A.  D.  190  ,  at  whieli  meeting  directors  were  elected  as  stated  herein,  aud  the  fol- 
lowing is  the  original  waiver : 

We,  the  undersigned,  being  all  of  the  stockholders  of  the  Com- 

pany, organized  under  the  laws  of  the  State  of  Illinois,  do  hereby  severally  waive 
notice  of  the  time  and  place  of 'the  meeting  of  the  stockholders  of  said 

company,  and  the  ])urpose  thereof,  and  any  aud  all  every  notice  required  by  the 
laws  of  the  State  of  Illinois. 


That  on  the  day  of  ,  A.  D.  190  ,  at  the  ,  Illinois, 

at  the  hour  of  M.,  they  convened  a  meeting  of  the  subscribers  aforesaid 

pursuant  to  notic;  required  by  law,  wliicli  said  notice  was  deposited  in  the  post- 
otfice,  properly  addressed  to  each  subscriber,  teu  days  before  the  time  fixed  therein, 
a  copy  of  which  said  notice  is  as  follows,  to  wit : 

To 
You  are  hereby  notified  that  the  Capital  Stock  of  has  been  fully 

subscribed,  and  that  a  meeting  of  the  subscribers  of  such  stock  will  be  held  at 

on  the  day  of  A.  D.  190    ,  at 

o'clock  M.,  for  the  purpose  of  electing  a  Board  of  Directors  for  said  Com- 

pany and  for  the  transaction  of  such  other  business  as  may  be  deemed  necessary. 

Signed 


Commissioners. 


That  said  subscribers  met  at  the  time  and  place  in  said  notice  specified,  and  pro- 
ceeded to  elect  Directors,  and  that  the  following  persons  were  duly  elected  for  the 
term  of  year        ,  viz.  : 


458 


FORMS   AND   PRECEDENTS. 

And  that  the  post-office  address  of  the  business  office  of  said  Company  is  at 
Number  Street  in  the  City  of  ,  iu  the  County  of  , 

and  State  of  Illinois. 

>•  Commissioners. 


State  of  \ 

County  of  \  ^^' 

On  this  day  of  ,  A.  D.  390  ,  personally  appeared  before  me, 

a  Notary  Public  in  and  for  said  County  in  said  State,  ,  and  made  oath 

that  the  foregoing  report  by  them  subscribed  is  true  iu  substance  and  in  fact. 

,  Notary  Public. 


INDIANA. 
AKTICLES   OF  INCORPORATION 

OF   THE 

Company. 

We,  the  undersigned,  hereby  associate  ourselves  together  pursuant  to  the  stat- 
utes of  the  State  of  Indiana  for  the  organization  of  corporations  by  the  following 
written  articles  : 

Art.  One. — Name. 
The  name  shall  be : 

Art.  Two.  —  Capital  Stock. 

The  capital  stock  of  this  association  shall  be  dollars,  divided  into 

shares  of  dollars  each. 

Art.  Three. — Object. 

The  object  of  this  association  and  the  proposed  plan  for  the  transaction  of  its 
business  shall  be : 

(To  be  stated  in  all  cases.  Care  should  be  taken  to  name  as  broad  an  object  as 
possible  and  at  the  same  time  to  avoid  mentioning  any  of  the  proposed  powers  of 
the  corporation.) 

Art.  Four. — Place  of  Operations. 

The  business  of  this  corporation  shall  be  carried  on  in  : 
(To  be  stated  iu  all  ca.s(!S.     Wiierc  the  work  is  from  one  point  to  anotlior,  this 
should  be  stated.     For  railroads,  name  all  counties  througli  which  the  road  passes 
and  give  length  as  near  as  possible.) 

Art.  Five.  —  Numukr  of  Dikectoks. 

There  shall  be    •  directors  for  this  corporation,  who  after  the  first  year 

shall  be  elected  annually  by  the  stockholders.  All  the  corjiorate  officers  shall  be 
appointed  by  the  directors. 

Art.  Six.  —  Directors  for  First  Year. 

The  following  directors  shall  maiingr  the  business  and  prudential  concerns  of 
this  corporation  for  the  first  year  of  its  existence. 

459 


INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS. 


AiiT.  Seven.  —  Term  of  Existence. 

The  associafion  sliall  luivc  au  existence  of  (not  to  exceed  fifty)  years 

from  the  date  hereof. 

///   ir/Z/zAM  M' hereof,  we  have  licreunto  set  our  hands  this  day  of 

,  A.  D.  190  . 

(The  subscribers  aflix,  in  addition  to  their  names,  their  residences, and,  if  a  stock 
corporation,  tiie  miniber  of  shares  taken  by  each.  In  the  case  of  savings  banks 
state  occupation  and  post-office  address.  Articles  for  tlie  incorporation  of  educa- 
tional and  religious  corporations  must  be  sworn  to.  Articles  for  Board  of  Trade, 
steam  packet,  telegrapli,  telephone,  building  and  loan,  health  resort,  Y.  M.  C.  A., 
boards  of  relief  for  or]ilians,  etc.,  and  manufacturing  companies  nnist  be  acknowl- 
edged as  deeds  are  acknowledged.     All  others  arc  signed  merely.) 


INDIAN  TERRITORY. 
ARTICLES   OF  AGREEMENT  AND  INCORPORATION 

OF 


Know  all  Men  by  these  Presents  :  That  the  Corporators  hereinafter  named 
have  this  day,  and  by  these  presents,  formed  a  Corporation  under  and  in  pursu- 
ance of  an  Act  of  Congress,  approved  February  18,  1901,  entitled  "  Au  Act  to  put  iu 
force  in  the  Indian  Territory  certain  provisions  of  the  Laws  of  Arkansas  relating  to 
Corporations  and  to  make  said  provisions  applicable  to  said  Territory,"  which  said 
Act  provides  for  incorporations  for  manufacturing  and  other  lawful  business  purposes 
in  the  Indian  Territory,  and  in  cvideuce  thereof  do  hereby  execute  the  following 
Articles  of  Incorporation : 

First.    The  name  of  said  Corporation  shall  be  : 

Second.   The  Corporators  arc  : 

Third.   The  place  of  business   is   to  be  located  at  and  its  office  for 

transaction  of  busiuess  shall  be  in  or  at  sucli  other  place  as  the  Board  of 

Directors  may  select. 

Fourth.  The  general  nature  of  the  business  proposed  to  be  transacted  by  this 
Corporation  is  : 

Fifth.   The  amount  of  capital  stock  of  said  Corporation  shall  be 
dollars ;  of  which  dollars  has  been  subscribed  by  the  Corporators  afore- 

said, and  the  residue  thereof  may  be  issued  and  disposed  of  as  the  Board  of 
Directors  may  from  time  to  time  order  and  direct. 

Sixth.   The  capital  stock  shall  be  divided  into  shares  of  the  value  of 

825  each. 

Seventh.  The  affairs  and  business  of  the  Corporation  shall  be  conducted  and 
controlled  by  a  Board  of  Directors,  consisting  of  members,  all  of 

whom  shall  be  stockliolders  of  the  Corporation.  Said  Board  of  Directors  shall 
elect  one  of  its  members  as  President,  and  one  of  its  members  as  Vice-President, 
and  shall  also  elect  a  Secretary  and  Treasurer. 

Eighth.  The  first  election  of  Directors  shall  be  held  immediately  after  the  or- 
ganization of  the  Corporation,  and  said  Directors  shall  serve  for  one  year  and  until 
their  successors  are  elected. 

Ninth.    The  Board  of  Directors  are  empowered  to  ordain  and  establish  all  by- 
laws and  regulations  necessary  to  the  management  and  busuiess  of  said  Corporation, 
and  alter  and  repeal  same  at  pleasure. 
460 


FORMS   AND    PRECEDENTS. 

Tenth.   The  first  meeting  of  said  Corporators  for  organization  shall  be  held  in 
at  the  office  of  at  o'clock  on  the 

day  of  ,  190  .    The  subscribers  hereto  hereby  waive  notice  of 

said  meeting. 

In  Testimony  Whereof,  we  have  hereunto  set  our  hands  on  this,  the 
day  of  ,  190  . 


CERTIFICATE. 

Whereas,  have  associated  themselves  together  as  a  body 

politic  and  corporate,  to  be  known  as 

And  Whereas,  The  said  Corporators,  being  the  subscribers  to  the  capital  stock  of 
said  Corporation,  have  waived  the  filteen  days'  notice  as  required  by  law,  and 
called  a  meeting  for  organization,  to  be  held  in  at  the  office  of 

at  o'clock  on  the  day  of  ,  190  . 

Whereas,  At  the  time  and  place  above  set  out,  a  meeting  of  the  subscribers 
aforesaid  was  held  to  organize  said  Corporation  and  elect  Directors ;  and 

Whereas,  At  said  meeting  the  following  named  persons  were  elected  Directors, 
to  wit:  ,  and 

Whereas,  At  a  meeting  of  the  said  Board  of  Directors  was  elected 

President,  and  was  elected  Vice-Presideut,  and  was  elected 

Secretary,  and  was  elected  Treasurer. 

Now,  Therefore,  the  said  as  President,  and  tlie  said 

as  Directors,  do,  in  pursuance  of  law,  issue  this,  their  Certificate,  verified  by  their 
oaths,  and  do  hereby  certify  as  follows : 

First.    Said  Corporation  is  formed  for  the  purpose  of 

Second.    Its  capital  stock  is  dollars,  divided  into  shares  of  §25  each. 

Third.  "     dollars  of  said  capital  stock  have  been  actually  paid  in  by 

the  subscribers  hereto. 

Fourth.  The  names  of  the  stockholders  and  the  number  of  shares  owned  by 
them,  respectively,  are  as  follows  : 

Names.  No.  of  Shares. 


In  Testimony/  Whereof,  the  said  ,  President  of  said  Corporation, 

and  ,  a  majority  of  the  Board  of  Directors  of  said  Corporation,  have 

hereunto  set  their  hands  on  this  day  of  ,  190  . 

,  President. 


Directors  Directors. 

United  States  of  America,     ) 
Indian  Territory,  r  ss. 

District.  ) 

on  their  oaths  say  that  the  matters  and  things  in  the  foregoing  certificate  set  out  are 
true,  to  the  best  of  their  knowledge  and  belief. 


Subscribed  and  ."^worn  to  before  mc,  this  the  day  of  ,  190 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  seal  of  office. 

461 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

IOWA. 
ARTICLES  OF  INCORPORATION 

OF    TITE 

. Company. 


We,  ■n-hose  names  are  hereunto  snl)scribcd,  have  associated  ourselves  as  a  body 
corporate,  under  the  provisions  of  Chapter  ],  Title  IX.  of  the  Code  of  Iowa,  and 
acts  aniendalory  thereto,  and  to  that  cud  have  adopted  the  following  articles  of 
iucorporatiou. 

Article  I. 

The  name  of  this  corporation  shall  be: 

Article  IL 

The  principal  place  of  business  of  this  corporation  shall  be  at  the  city  of  , 

in  the  county  of  ,  and  State  of  Iowa. 

(Note.  If  the  corporation  does  not  transact  business  in  this  State,  it  is  not  necessary  that 
the  articles  name  its  principal  place  of  business,  or  that  such  principal  place  of  business  be  in 
this  State) 

Article  III. 

The  general  nature  of  the  business  to  be  transacted  by  this  corporation  shall  be : 

(Note.  It  is  customary  to  state  the  general  nature  of  the  business  to  be  transacted  quite 
fully,  making  this  statement  broad  enough  to  cover  all  the  contingencies  that  may  possibly 
arise.) 

Article  IV. 

This  corporation  shall  have  all  of  the  powers  necessary  for,  or  incidental  to,  the 
convenient  transaction  of  tlie  business  for  which  it  has  been  organized,  including 
the  power  to  borrow  money,  and  to  issue  its  negotiable  notes,  bonds,  or  other  evi- 
dences of  such  indebtedness,  and  to  secure  the  repayment  of  the  same  by  liens 
upon  all  or  any  portion  of  its  property,  real  or  personal,  by  way  of  mortgage  or 
otherwise,  and  including  the  power  to  own,  lease,  buy,  and  sell  real  estate;  and 
further  among  its  powers  shall  be  the  following : 

1.  To  have  perpetual  succession ; 

2.  To  sue  and  be  sued  by  its  corporate  name ; 

3.  To  have  a  common  seal,  which  it  may  alter  at  pleasure  ; 

4.  To  render  the  interests  of  the  stockholders  transferable ; 

5.  To  exempt  the  private  property  of  its  members  from  liability  for  corporate 
debts ; 

6.  To  make  contracts,  acquire  and  transfer  property,  —  possessing  the  same 
powers  in  such  respects  as  natural  persons ; 

7.  To  establish  by-laws,  and  make  all  rules  and  regulations  necessary  for  the 
management  of  its  affairs. 

(Note.  This  section  is  not  absolutely  necessary.  It  is,  however,  customary,  and  the  pro- 
visions, especially  with  reference  to  borrowing  money,  etc.,  will  be  found  in  actual  practice 
to  facilitate  such  transactions.) 

Article  V. 

The  amount  of  the  authorized  capital  stock  of  this  corporation  is  the  sum  of 

dollars  divided  into  shares,  each  of  the  par  value 

of                          dollars.     Not  less  thau  dollars  of  the  capital  stock 

of  this  corporation  shall  be  paid  in  in  cash,  or  in  property  at  its  reasonable  cash 
value,  before  the  corporation  transacts  business  except  the  business  incident  to  its 
organization. 
462 


FORMS   AND    PRECEDENTS. 

(1)  The  remainder  of  the  capital  stork  of  this  corporation  shall  be  issued  and 
paid  in  from  time  to  time  as  the  boari  of  directors  may  directs 

(2)  The  par  value  of  all  stock  shall  be  paid  in,  either  in  cash  or  in  property  at 
its  reasonable  cash  value,  at  the  time  that  the  stock  is  issued. 

(Note.  The  sentence  indicated  as  (1)  above,  may  be  omitted  if  the  stock  is  all  to  be 
paid  in  when  the  corporation  commences  business.  If  it  is  not  all  to  be  so  paid  in,  there 
should  be  something  of  this  character  inserted,  prescribing  when  the  remainder  of  the  stock 
shall  be  issued.  The  sentence  (1)  follows  the  method  usually  adopted  in  Iowa,  but  any 
method  may  be  adopted  which  makes  the  articles  state  when  the  stock  not  issued  when  the 
corporation  is  organized   shall  be  issued.) 

(Sentence  (2)  above,  should  be  omitted  unless  the  stock  is  to  be  paid  up  as  stated.  If  the 
stock  is  to  be  paid  up  entirel.v  in  cash  when  issued,  or  all  of  it  in  property  when  issued, 
modifv  this  article  to  conform  to  the  facts.  It  is  not  essential  that  this  sentence  be  inserted, 
but  if  the  stock  is  to  be  fully  paid,  it  is  desirable  that  the  articles  should  show  it.) 

Article  VI. 

This  corporation  shall  commence  on  the  day  of  ,  A.  D.  19    ,  and 

shall  continue  for  tlie  term  of  twenty  years  thereafter,  with  the  right  of  renetcal  as 
provided  by  law,  unless  sooner  dissolved  by  a  vote  of  not  less  than  of  the  stock 

then  outstanding. 

(Note.  Under  the  law  it  takes  unanimous  consent  to  dissolve  before  the  expiration  of 
the  term  unless  the  articles  provide  otherwise.  It  is  tlicrefore  not  unusual  to  put  in  a  pro- 
vision that  a  designated  majority,  as  two-thirds  or  three-fourths,  may  dissolve  the  corpora- 
tion.   The  italicized  portion  above  is,  however,  not  necessary,  if  such  right  is  not  desired.) 

Article  VII. 

The  affairs  of  this  corporation  shall  be  conducted  by  a  board  of  not  less  than 
nor  more  than  directors. 

Within  said  limits  the  number  of  directors  may  be  fixed  by  the  stockholders  at 
any  regular  or  special  meeting;  until  otherwise  fixed  by  the  stockholders  the  board 
of  directors  shall  consist  of  members. 

The  board  of  directors  shall  hare  general  charge  of  the  business  and  affairs  of 
this  corporation,  and  all  of  the  powers  of  this  corporation  are  vested  in  its  board 
of  directors  except  as  otiierwise  provided  by  law,  or  by  the  by-laws  of  this  corpora- 
tion, and  subject  to  such  action  restricting  said  powers  as  may  be  taken  from  time 
to  time  by  the  stockholders,  either  at  an  annual  or  at  a  special  meeting,  duly  called 
therefor. 

The  directors  of  this  corporation  may  delegate  their  powers  and  may  in  writing 
authorize  others  to  act  for  tliem,  as  tlieir  proxies,  at  any  meeting  or  meetings  of 
its  board  of  directors;  provided,  however,  that  the  stockholders  of  this  corpora- 
tion may  at  any  time  limit,  restrict,  or  proliibit  such  delegation  of  power  by  its 
directors,  and  while  so  limited  or  restricted  said  power  shall  only  be  delegatcd'nur- 
suaiit  to  such  limitations  or  restrictions;  and  if  so  prohibited  it  shall  not  be  uclc- 
gated  during  the  continuance  of  sueii  prohibition. 

(Notk.  Much  of  the  above  is  not  necessary.  It  has,  however,  proved  to  be  n  matter  of 
very  great  convenience.  In  lieu  of  the  above  the  following  article  would  till  the  requirements 
of  the  law  : 

"  The  affairs  of  (his  corporation  shall  be  conducted  by  a  board  of  directors 

who  shall  have  general  charge  of  its  business.") 

Article  VIIL 

The  officers  of  this  corporation  .shall  be  a  president,  vice-president,  secrefnrv, 
and  treastirer.  The  directors  may  a|)poiiit  a  cashier  and  executive  committee  and 
such  other  ofBcers  as  the  convenient  transaction  of  its  business  may  require. 

All  officers  and  directors  of  tiiis  corporal if)n  shall  hold  office  for  one  year,  or 
until  tlieir  successors  are  chosen  and  qualified,  and  any  vaeaney  in  any  office,  or  in 
the  l)oard  of  directors,  may  be  filhd  by  the  remaining  directors  until  the  successor 

403 


INCOUrORATION    AND    ORGANIZATION    OF    CORPORATIONS. 

of  tlie  person  tlms  chosen  to  fill  sncli  vacancy  is  elected  by  the  stockholders  or 
directors,  at  au  annual  or  special  meeting,  and  has  duly  qualified. 

Article  IX. 

The  board  of  directors  of  this  corporation  shall  be  elected  at  the  annual  meeting 
of  the  stockholders,  wliich  sliall  be  held  on  the  second  Tuesday  of  in  eacli 

year,  connnencing  with  tiie  year  A.D.  19  ,  at  the  principal  office  of  the  conijjany 
at  such  hour  as  may  be  fixed  by  the  directors  or  by  the  by-laws.  The  officers  of 
this  corporation  siiall  be  chosen  by  tlic  directors  at  the  annual  meeting  of  the 
directors,  which  shall  be  held  each  year  immediately  after  the  annual  nu'cting  of 
the  stockholders. 

Until  the  annual  meeting  of  the  stockholders  in  the  year  A.D.  19  ,  and  until 
their  successors  are  chosen  and  have  qualified,  shall  constitute  the  board 

of  directors  of  this  corporation,  and  its  officei's  shall  be  president, 

vice-president,  secretary,  and  treasurer. 

(Note.    Of  course  any  date  maj-  be  fixed  for  the  annual  meeting.) 

Article  X. 

Each  director  shall  be  a  stockholder,  and  if  any  director  shall  cease  to  be  a  stock- 
holder he  shall  forthwith  by  virtue  of  that  fact  cease  to  be  a  director.  Two  or  more 
offices  may  be  held  by  the  same  person  at  the  same  time. 

(Note.    The  preceiing  article  is  not  necessary  to  a  legal  organization.) 

Article  XI. 

At  all  meetings  of  the  stockholders  each  stockholder  shall  be  entitled  to  one 
vote  for  each  share  of  stock  held  by  him,  which  votes  may  be  cast  either  iu  person 
or  by  proxy  duly  authorized  iu  writing. 

(Note.    The  preceding  article  is  not  necessary  to  a  legal  organization). 

Article  XII. 

The  highest  amount  of  indebtedness  to  which  this  corporation  shall  at  any  time 
subject  itself  shall  be  au  amount  not  iu  excess  of  two-thirds  of  its  capital  stock  then 
issued  and  outstanding. 

Article  XIII. 

The  private  property  of  the  stockholders  of  this  corporation  shall  be  exempt  from 
corporate  debts. 

Article  XIV. 

These  articles  may  be  amended  at  any  annual  meeting  of  the  stockholders  or  at 
any  special  meeting  called  for  that  pur[)ose  ;  but  no  such  amendment  shall  be  made 
without  the  affirmative  vote  in  its  favor  of  of  the  shares  of  stock  then 

outstanding. 

(Note.  This  article  is  probably  unnecessary  but  it  is  better  to  have  it,  and  it  is  re- 
quired, if  an  amendment  b}'  a  bare  majority  of  a  quorum  is  to  be  precluded.) 

In  Witness  Whereof^  we  have  hereunto  subscribed  our  names  on  this  day 

of  A.  D.  19     . 

State  of  ")  gg 

County  of  ) 

Before  me,  ,  a  notary  public,  in  and  for  said  county,  personally 

appeared  ,  said  persons  being  to  me  personally  known  to  be  the  iden- 

tical persons  whose  names  are  subscribed  in  the  foregoing  articles  of  incorporation, 

4G4 


FORMS   AND   PRECEDENTS. 

and  eacli  for  himself  acknowledged  the  same  to  be  his  free  and  voluntary  act  and 
deed  for  the  uses  and  purposes  therein  expressed. 

Witness  my  hand  and  notarial  seal  at  ,  in  the  county  of  , 

and  State  of  Iowa,  the  day  and  year  last  above  written. 

,  Notary  Public  in  and  for  said  county  and  State. 

(Note.    It  is  not  necessary  that  the  incorporators  subscribe  for  any  stock,  and  they 
need  not  become  stockholders.) 


KANSAS. 

APPLICATION  FOR  CHARTER. 

To  the  Charter  Board  of  the  State  of  Kansas  :  The  undersigned  hereby  apply  to 
the  Charter  Board  of  the  State  of  Kansas,  consisting  of  the  Attorney-General,  Secre- 
tary of  State,  and  State  Bank  Commissioner,  for  permission  to  organize  a  private 
corporation  under  the  law  of  the  State  of  Kansas,  and  for  that  purpose  make  the 
following  statement,  to  wit : 

First. 

The  name  of  the  proposed  corporation  shall  be :  . 

Second. 

The  place  where  the  principal  office  or  place  of  business  of  said  corporation  is 
to  be  located  is  : 

Third. 

The  length  of  time  for  which  said  corporation  is  to  exist  shall  be  years. 

Fourth. 

The  full  nature  and  cliaracter  of  the  business  in  which  said  corporation  proposes 
to  engage  is : 

Fifth. 

The  names  and  addresses  of  the  proposed  incorporators  are : 

Sixth. 

The  proposed  amount  of  the  capital  of  said  corporation  is  dollars,  to 

be  divided  into  shares,  of  dollars  each. 

We  further  state  that  the  above  application  is  made  in  good  faith,  with  the  in- 
tention that  said  corporation  sliall  actually  engage  in  the  business  specified,  and 
none  other. 

In  Witnens  Whereof  we,  tiie  above-named  incorporators,  have  hereunto  sub- 
scribed our  names,  this  day  of  ,  A.  D.  190  . 

State  of  Kansas,    ) 
County  of  > 

Personally  appeared  before  me,  a  ,  in  and  for  said  county  and  State, 

the  abovc-namca  ,  who  arc  personally  known  to  mc  to  be  the 

same  persons  who  exccutful  the  foregoing  instrumont  in  writing,  and  they  each 
duly  acknowledged  the  execution  of  the  same. 

In  Testimony  Whereof  I  have  hereunto  subscribed  my  name  and  affixed  my  seal, 
this  day  of  ,  A.  D.  I'JO  . 

(My  commission  expires  ,  190  .) 

30  465 


INCORPORATION   AND   ORGANIZATION    OF   CORPORATIONS. 
CHARTER 


The  luuicrsiiriiod,  citizens  of  tlic  State  of  Kansas,  do  hereby  voluntarily  associate 
ourselves  totjetlier  for  the  i)ur[x)se  of  forming  a  private  corporation  under  the  laws 
of  the  State  of  Kansas,  and  do  hereby  certify  : 

First. 
That  the  name  of  this  corporation  shall  be  The 

Second. 
That  the  purposes  for  which  this  corporation  is  formed  are  to :  . 

Third. 
That  the  place  where  its  business  is  to  be  transacted  at : 

Fourth. 
That  the  term  for  which  this  corporation  is  to  exist  is  : 

Fifth. 

That  the  number  of  directors  of  this  corporation  shall  be  ,  and  the 

names  and  residences  of  those  who  are  appointed  for  the  first  year  are : 

Sixth. 

That  the  estimated  value  of  the  goods,  chattels,  lands,  rights,  and  credits  owned 
by  tlie  corporation  is  dollars. 

That  the  amount  of  the  capital  stock  of  this  corporation  shall  be  dol- 

lars, and  shall  be  divided  into  shares,  of  dollars  each. 

Seventh, 

That  the  names  and  residences  of  the  stockholders  of  said  corporation,  and  the 
number  of  shares  held  by  each,  are  as  follows,  to  wit: 

Names.  Residences.  No.  of  Shares. 

In  Testimony  Whereof,  we  have  hereunto  subscribed  our  names,  this 
day  of  ,  A.  D.  190  . 

State  of  Kansas,     \ 
County,   ^ 

Personally  appeared  before  mc,  a  Notary  Public  in  and  for  County, 

Kansas,  tlie  above-named  who  are  personally  known  to  me  to 

be  the  same  persons  who  executed  the  foregoing  instrument  of  writing,  and  duly 
acknowledged  the  execution  of  the  same. 

In  Testimony  Whereof,  I  have  hereunto  subscribed  my  name  and  affixed  my 
notarial  seal,  this  day  of  ,  A.  D.  190  . 

(seal.) 

,  Notary  Public. 

(My  commission  expires  .) 

Office  of  Treasurer  of  State. 
Received  of  the  sum  of  dollars,  the  same  being  the 

Charter  Fee  for  the 

Dated  this  day  of  ,  A.  U.  190  . 

,  Treasurer  of  State  of  Kansas. 
By 
466 


FORMS   AND    PRECEDENTS. 

KENTUCKY. 

AUTICLES  OF  INCORPORATION. 

The  corporators  whose  names  are  hereto  signed  have  executed  these  articles  of 
incorporation  for  the  purpose  of  forming  a  corporation  under  the  laws  of  the  Slate 
of  Kentucky,  in  accordance  with  the  following  provisions : 

1.  The  name  of  the  corporation  shall  be: 

2.  The  place  where  the  principal  office  of  the  corporation  shall  be  is  the  City  of 

,  County  of  ,  State  of  Kentucky. 

3.  The  purposes  for  which  this  corporation  is  formed  are  : 

4.  Tiie  amount  of  the  capital  stock  of  this  corporation  shall  be 

dollars,  divided  into  shares  of  the  par  value  of  dollars  each.     (If 

preferred  stock  is  desired,  insert  provision  therefor  at  this  point.) 

5.  The  names  and  residences  of  the  stockholders  and  the  number  of  shares  sub- 
scribed for  by  each  are  as  follows : 

6.  This  corporation  shall  begin  on  ,  and  the  period  of  continuance  shall 
be                 years  (or  perpetual). 

7.  The  affairs  of  the  corporation  are  to  be  conducted  by  (state  the  officers  to 
conduct  the  affairs  of  the  corporation),  who  shall  be  elected  annually  at  (name,  time, 
and  place). 

8.  The  corporation  shall  not  at  any  time  incur  a  higher  amount  of  indebtedness 
or  liabilitv  than  dollars. 

9.  The  private  property  of  the  stockholders  shall  not  be  subject  to  the  corpo- 
rate debts  (or  shall  be  subject,  and  state  to  what  extent). 

1)1  Witness  Whereof,  we  have  hereunto  subscribed  our  names  this  day  of 

,  A.  D.  190     . 

State  of  Kentucky,    ?  ^ 
County  of  \ 

I  ,  a  Notary  Public  in  and  for  said  county  and  State,  do  hereoy 

certify  that  this  instrument  of  writing  from  (here  insert  names  of  incorporators)  was 
this  (lay  produced  to  me  by  the  above  jjurties,  and  was  acknowledged  by  the 
said  to  be  their  act  and  deed. 

Given  under  my  hand  and  seal  this  day  of  ,  190  . 

,  Notary  Public. 

LOUISIANA. 
CERTIFICATE  OF  INCORPORATION 


Company. 

United  States  of  America, 
State  of  Louisiana, 
Parish  of  , 

City  of 

Be  It  Known,  that  on  this  day,  the  of  the  month  of  in  the  year 

of  our  Lord  one  thousand  nine  imndrcd  and  ,  and  of  the  Independence  of  the 

United    States    of   America   the   one    hundred   and  ,  before    me, 

a  Notary  Public  in  and  for  tlie  Parish  of  ,  State  of  Louisiana,  duly  roni- 

missioncd,  sworn,  and  qualified,  and  in  tin-  presence  of  tiie  witnesses  liereinafter  named 
and  undersigned,  personally  came  and  apjic-ared  the  s(-veral  iwrsons  whose  names 
are  hereunto  siibscribrd,  all  of  the  age  of  majority,  who  declared  that,  availing 
themselves  of  the  provisions  of  the  laws  of  this  Slate  relative  to  the  organization 

4G7 


INCORPORATION   AND    ORGANIZATION   OF    CORPORATIONS. 

of  corporations,  tlicy  liorcby  form  themselves  into  and  consiiluic  a  corporation  for 
the  objects  anil  purposes,  and  under  tlic  stipulations  hereinai'ler  set,  forth,  viz. : 
(If  a  limited  eorporalion  is  to  be  formed,  the  above  clause  slioidd  read,  from  the 
words  "availing  themselves"  as  follows:  Availini,^  themselves  of  .Act  'My  of  1888 
as  well  as  the  general  laws  of  the  State  relative  to  tiie  organization  of  corporations, 
they  hereby  form  themselves  into  and  constitute  a  corporation  for  the  objects  and 
purposes,  and  under  the  stipulations  hereinafter  set  forth : ) 

Article  I. 

The  name  and  title  of  this  corporation  shall  be : 
and  by  that  name  it  shall  enjoy  succession  for  the  term  of  years  from 

the  date  hereof,  unless  sooner  dissolved.  It  shall  have  power  to  sue  and  be  sued, 
to  borrow  money,  hold,  purchase,  lease,  sell,  and  hyi)othecate  real  and  personal  ])rop- 
erty ;  to  make  and  use  a  corporate  seal ;  to  name  and  appoint  directors,  managers, 
and  agents,  and  to  establish  such  by-laws,  rules,  and  regulations  for  the  numagement 
of  the"  business  aiul  affairs  of  said  corporation  as  nuiy  be  uecessary  the  same  to  alter 
at  pleasure  ;  also  to  make  and  issue  bonds  and  other  evidences  of  debt,  and  to  secure 
same  by  mortgage  or  otherwise. 

Article  IL 

The  domicile  of  this  corporation  shall  be  in  the  City  of  ,  and  all  citations 

or  other  le^al  process  shall  be  served  on  the  President,  or,  in  his  absence,  ou  the 
■Vice-President. 

Article  III. 

The  objects  and  purposes  of  this  corporation  shall  be  to : 

Article  IF. 

The  capital  stock  of  this  corporation  shall  be  fixed  at  dollars,  divided  into 

shares  of  dollars  each,  payable  ,  or  its  equivalent. 

Article  V. 

All  the  powers  of  this  corporation  shall  be  vested  in  a  Board  of  Directors,  com- 
posed of  directors,  of  whom  shall  constitute  a  quorum  for  the 
transaction  of  business.  They  shall  elect  from  their  uumb'er  a  President,  Vice- 
President,  and  a  Secretary  and  Treasurer. 

The  following-named  persons  shall  constitute  a  quorum  of  Directors: 

President, 

Vice-President, 

Secretary, 

Treasurer, 
and  they  shall  hold  office  until  the  in  ,  190     ,  or  until  their 

successoi-s  shall  have  been  duly  elected.  Any  failure  to  hold  an  annual  meeting 
shall  not  cause  a  forfeiture  of  tliis  act  of  incorporation,  and  any  vacancy  occur- 
ring in  the  Board  of  Directors,  from  any  cause,  shall  be  filled  by  the  remaiuiug 
Directors. 

Tiie  Board  of  Directors  shall  elect  its  officers,  and  shall  appoint  such  agents 
and  managers  as  may  be  necessary,  and  shall  fix  their  compensation.  The  Board 
shall  also  have  the  riglit  to  dismiss  said  employees  at  pleasure. 

All  acts  of  sale,  purchase,  lease,  or  others,  shall  oe  signed  by  the  , 

or  in  case  of  his  absence,  or  inability  to  act,  by  the 

Article  VI. 

On  the  day  in        ,    190     ,  annually,  beginning  with  the  year  190     , 

there  shall  be  held  a  meeting  of  stockholders,  to  elect  Directors  for  the  ensuing 
year  which  meeting  shall  be  called  after  day's  notice ;  said  notice  to  be 

4G8 


FORMS    AND   PRECEDENTS. 

deposited  in  the  mail,  postage  prepaid^  and  directed  to  each  stockliolder,  at  his  or 
her  last  known  address.  At  said  meeting  said  Directors  shall  be  elected  by  ballot, 
and  a  majority  of  the  votes  cast  shall  be  necessary  to  elect,  and  each  share  of  stock 
shall  be  entitled  to  one  vote,  and  the  sliareliolder  shall  vote  in  person  or  by  Avrit- 
teu  proxy.     Only  shareholders  shall  be  eligible  as  Directors. 

Article  VII. 

Any  stockholder  who  may  desire  to  dispose  of  his  share  or  shares  of  stock 
shall  give  tlie  refusal  of  the  same  to  tiiis  corporation,  or  any  member  thereof,  and 
no  stock  shall  be  transferred  except  upon  the  books  of  the  company.  No  stock- 
holder shall  be  held  liable  for  any  contracts  or  faults  of  this  corporation,  in  any 
further  sum  than  the  unpaid  balance  on  his  respective  shares. 

Article    Fill. 

This  act  of  incorporation  may  be  modified,  changed,  or  amended,  or  said  corpo- 
ration may  be  dissolved  by  a  vote  of  three-fourths  of  the  stock  represented  at  a 
general  meeting  held  for  that  purpose  after  due  notice  shall  have  been  given  by 
publication  for  days  in  one  of  the  newspapers  published  in  ,  and 

in  case  of  dissolution  two  commissioners  shall  wind  up  and  settle  the  affairs  of  this 
corporation,  and  in  the  event  of  a  disagreement  between  them,  they  shall  select  an 
umpire,  whose  decision  shall  be  final. 

At  the  termination  of  this  act  of  incorporation  the  business  and  affairs  of  this 
corporation  shall  be  likewise  wound  up  and  settled  by  commissioners 

elected  by  the  stockholders  at  a  meeting  called  for  that  purpose,  after  twenty 
days'  notice  as  above. 

Thus  done  and  passed  in  my  office,  in  aforesaid,  the  day,  month,  and 

year  first  above  written,  in  the  presence  of  ,  witnesses  of  lawful  age, 

residing   in  ,  who  hereunto  sign  their  names   together  with  said   ap- 

pearers  and  me,  notary,  after  due  reading  of  these  presents. 

Original  signed, 


and  others. 

,  Notarji  Public. 
(City),  (Date),  190  . 

T,  the  undersigned.   Recorder  of  Mortgages  in  and  for  the  parish  of  , 

State  of  ,  do  hereby  certify   that  the  above  and  foregoing  act  of  incor- 

poration of  the  Company  was  this  day  duly  recorded  in  my  office  in 

Dook  ,  folio 

(Citv),  ,190     . 

Signed :  '  ,  D.  R. 

I,  ,  a  Notary  Public  for  the  Parish  of  ,  aforesaid,  do 

hereby  certify  the  above  and  foregoing  to  be  a  true  and  correct  copy  of  the  original 
act  of  incorporation  of  the  Company,  and  of  the  certificate  of  the 

Recorder  of  Mfjrtgagcs  thereto  attached,   the  wiiolc  cxtunt  and   on  file  in  my 
current  notarial  register. 

In  faith  whereof  I  grant  these  presents  under  my  signature  and  tlic  impress  o£ 
my  seal  of  office. 

the         ,  A.  D.  190  . 
Signed : 

,  Notary  Public. 


469 


INCORPORATION    AND   ORGANIZATION   OP   CORPORATIONS. 

MAINE. 
ARTICLES  OF  ASSOCIATION, 

111  accordance  witli  the  Revised  Statutes  of  tlie  State  of  Maine,  Chapter  47, 
Sections  (>,  7,  8,  and  10,  we,  tlic  undersigned,  wliose  residences  are  set  opposite  our 
respective  names,  hereby  associate  ourselves  together  by  tliese  written  Articles  of 
Agreement  for  the  purpose  of  forming  a  corporation  under  the  laws  of  the  State  of 
Maine,  the  purposes  of  which  said  corporation  are  : 

The  lirst  meeting  of  said  associates  shall  be  held  in  accordance  with  the  pro- 
visions of  Section  17  of  Chapter  48,  at  the  office  of  ,  No. 

St.,  ,  Maine,  on  ,  the  day  of  ,  A.  D.  190  . 

Dated  at  ,  this  day  of  ,  190  . 

Names.  Residences. 


Waiver  of  Notice  of  First  Meeting  of  Incorporators. 

TTe,  the  undersigned,  being  all  the  signers  of  the  foregoing  Articles  of  Associa- 
tion, hereby  waive  notice  of  the  time,  place,  and  purpose  of  the  first  meeting  of  the 
signers  of  said  Articles  of  Association  as  required  by  Section  17  of  Chapter  48  of 
the  Revised  Statutes  of  the  State  of  Maine,  and  acts  additional  thereto  and  amenda- 
tory thereof,  and  do  hereby  fix  the  day  of  ,  A.  D.  190  ,  at 
o'clock  in  the  forenoon  as  the  time,  and  the  office  of  ,  No. 

,  Maine,  as  the  place  of  said  meeting,  and  we  do  hereby 
severally  consent  that  said  first  meeting  be  held  at  the  time,  place,  and  for  the 
purposes  aforesaid,  to  wit : 

1.  To  organize  into  a  corporation. 

2.  To  adopt  a  corporate  name. 

3.  To  define  the  purposes  of  the  corporation. 

4.  To  fix  the  amount  of  capital  stock,  and  divide  same  into  shares. 

5.  To  elect  a  President,  not  less  than  three  Directors,  a  Clerk,  a  Treasurer,  and 
all  other  necessary  officers. 

6.  To  adopt  a  Code  of  By-Laws. 

7.  To  act  upon  any  further  business  which  may  properly  come  before  the 
meeting. 

Dated  at  ,  Maine,  this  day  of  ,  190  . 


First  Meeting. 

Pursuant  to  the  foregoing  Articles  of  Association  and  Waiver  of  Notice  of  First 

Meeting  of  Incorporators,  signed  by  all  the  incorporators,  a  meeting  of  said  signers 

of  said  articles  was  held  at  the  office  of  ,  No.  Street, 

,  Maine,  on  the  day  of  190  ,  at  o'clock 

in  the  noon. 

Of  the  signers  the  following  were  present : 

The  meeting  was  called  to  order  by 

was  chosen  Chairman  and  presided,  and  was 

chosen  Clerk. 

The  clerk  was  then  duly  sworn  as  appears  by  the  following  certificate  : 

470 


FORMS    AND   PRECEDENTS. 

State  of  Maine. 

Portland,  190  . 

Cumberland,  ss. 

Then  personally  appeared  ,  Clerk  of  the  Meeting  of  Associates, 

mentioned  in  the  foregoing  Articles  of  Agreement,  and  made  oath  that  he  would 
faithfully  and  impartially  perform  the  duties  of  his  office. 
Before  me, 

,  Justice  of  the  Peace. 

The  original  Articles  of  Association  and  Waiver  of  Notice  of  First  Meeting  of 
Incorporators  were  presented  and  ordered  to  be  made  a  part  of  this  record. 

()u  motion  it  was  Voted  :  To  organize  a  corporation  under  Sections  10,  17,  18, 
and  19  of  Cliapter  48  of  the  Revised  Statutes  of  Maine,  and  acts  additional  thereto 
and  amendatory  thereof. 

On  motion  it  was  Voted  :  That  the  name  of  the  corporation  shall  be : 

On  motion  it  was  Voted:  That  the  purposes  of  said  corporation  shall  be  as 
set  forth,  stated,  specified,  and  defined  in  the  Articles  of  Association,  which  are 
expressly  referred  to  and  made  a  part  of  this  vote. 

On  motion  it  was  Voted :  That  the  place  of  business  of  this  corporation  shall  be 
at  ,  Maine,  but  the  corporation  may  maintain  other  general  offices  and  places 

of  business  at  such  other  place  or  places,  either  within  or  without  this  State, 
as  the  Directors  may  from  time  to  time  determine  to  be  for  the  interests  of 
the  corporation. 

On  motion  it  was  Voted:  That  the  capital  stock  of  this  corporation  shall  be 
and  is  hereby  fixed  at  dollars,  divided  into  shares  of  the  par  value 

of  dollars  each. 

On  motion  it  was  Voted:  That  the  chairman  appoiut  a  Committee  of  one 
to  examine  and  report  at  once  the  names  and  residences  of  persons  who  have 
subscribed  for  stock  in  this  company,  and  the  amount  of  stock  subscribed  for  by 
each.  The  Clerk  was  appointed  as  such  Committee,  and  made  the  following 
report  of  the  list  of  stockholders,  and  the  report  was  accepted,  and  the  persons 
therein  named  were  declared  to  be  stockholders  in  this  corporation. 

Report  of  Committee. 
Names.  Residences.  No.  of  Shares. 

The  following  subscriptions  for  stock  wore  then  filed  : 
Subscription  for  Stock. 

,  Maine,  ,  190  . 

Wc,  the  undersigned,  hereby  severally  agree,  each  with  the  other,  and  with  the 
corporation  hereinafter  named,  in  consideration  of  the  mutual  agreements  herein 
contained,  to  make,  pay  for,  and  receive  the  number  of  shares  set  opposite  our 
respective  names,  of  the  capital  stock  of  the  Company. 

Names.  Residences.  No.  of  Sliarcs. 

On  motion  it  was  Voted:  To  have  the  following  Code  of 

By-La wb:  (Here  insert  name.) 

On  motion  it  was  Voted :  To  proceed  to  the  election  of  ofTieers  for  the  ensuing 
year  by  written  ballot,  and  tliat  llie  Clerk  be  a  Couimillee  to  receive,  sort,  and 
count  the  votes  thrown.  Having  attended  to  that  duty,  he  reported  lliat  for 
directors,  received  votes,  being  all  the  voles  thrown  ;  that 

for  Treasurer,  received  votes,  being  all  the  votes  thrown; 

that  for  Clerk,  received  votes,  being  all  the  votes  thrown ; 

471 


INCORPORATION   AND    ORGANIZATION    OF   CORPORATIONS. 

thiit  for   Soorotiiry,  received  votes,  being  all  the  votes 

tlirown.  ami  the  report  was  accepted  and  tiic  persons  therein  named  were  declared 
to  be  dulv  elected  to  the  respective  offices. 

Tlic  Clerk  was  then  duly  sworn,  as  appears  by  the  following  Certificate : 

State  of  Maine. 

Portland,  ,  190  . 

Cumberland,  ss : 

Then  personally  appeared  the  above-named  ,  and  being  duly 

sworn,  made  oath  'that  he  would  faithfully  and  impartially  perform  the  duties  of 
his  said  office. 

Before  me, 

,  Justine  of  the  Peace. 

On  motion  it  was  Voted:  To  proceed  to  the  election  of  an  Executive  Com- 
mittee of  members,  and  that  the  Clerk  be  a  Committee  to  receive  and  sort 
and  count  the  votes  thrown.  Having  attended  to  that  duty,  he  reported  that  for 
members  of  the  Executive  Committee  had  received  votes, 
being  aU  the  votes  thrown. 

On  motion  it  was  Voted:  To  prepare  a  Certificate  of  Incorporation  setting  forth 
the  name  and  purposes  of  the  corporation  and  other  particulars  required  by  said 
Chapter  48,  and  the  same  was  accordingly  done. 

On  motion  it  was  Voted:  To  adjourn. 

Adjourned.  ,  Secretary. 

Attest:  ,  Cler'k  of  Meeting  of  Associates. 

Ratification  of  Records. 

We,  the  undersigned,  being  all  the  members  of  said  corporation,  hereby  ac- 
knowledge that  the  above  are  true  records  of  the  organization  of  the  aforesaid 
corporation,  aud  all  the  proceedings  of  the  aforesaid  meeting,  and  hereby  consent 
to  approve,  ratify,  and  confirm  all  of  the  aforesaid  proceedings  aud  the  above 
records  thereof. 

Dated  ,  Maine,  this  day  of  190  . 

A  true  copy  of  the  records  of  the  proceedings  of  the  first  meeting. 

Attest : 

,  Clerk. 

CERTIFICATE  OF  ORGANIZATION  OF  A  CORPORATION 
UNDER  THE  GENERAL  LAW. 

The  undersigned,  officers  of  a  corporation  organized  at  ,  Maine,  at  a 

meeting  of  the  signers  of  the  articles  therefor,  duly  called  and  held  at  the  office  of 
,  in  the  City  of  ,  on  the  day  of  ,  A.  D.  190  , 

hereby  certify  as  follows  : 

The  ii.uDe  of  said  corporation  is  : 

The  purposes  of  said  corporation  are  : 

Tiie  amount  of  capital  stock  is  dollars. 

Tiie  amount  of  capital  stock  already  paid  in  is 

The  par  value  of  the  shares  is  dollars. 

The  names  and  residences  of  the  owners  of  said  shares  are  as  follows  : 
Names.  Residences.  No.  of  Shares. 


Unissued  and  in  the  Treasury. 

Total. 
472 


FORMS   AND   PRECEDENTS. 


Said  corporation  is  located  at 
The  number  of  directors  is 
The  name  of  the  Clerk  is 
The  undersigned 

Treasurer  ;  and  the  undersigned 

of  said  corporation. 

y/it/iess  our  hands  this 


in  tbe  County  of 
,  and  their  names  are 
,  and  his  residence  is 
is  President  ;  the  undersigned  is 

are  a  majority  of  the  Directors 


day  of 


Then  personally  appeared 
foregoing  certificate  that  the  same  is  true. 

Eefore  me, 


,  A.  D.  190  . 

,  President. 

,  Treasurer. 

,  Directors. 

190  . 

and  severally  made  oath  to  the 
,  Justice  of  the  Peace. 


State  of  Maine. 

Attorney  General's  Ofiice,  190 

I  hereby  certify  that  T  have  examined  the  foregoing  certificate,  aud  the  same  is 
properly  drawn  aud  signed,  and  is  conformable  to  the  Constitution  aud  laws  of 
the  State. 

,  Attorney  General. 
Company, 
ss. 
Registry  of  Deeds. 
Received  190 

at  h.  M  .  M. 

Recorded  in  Vol.  Page 


Attest : 

A  true  copy  of  record. 

Attest : 


,  Register. 
,  Register. 


MARYLAND. 

CERTIFICATE  OF  INCORPORATION. 

State  of  Maryland,   ) 
County  of  S     * 

Certificate  of  Incorporation  of  the  Company  of  the  City  of 

Know  all  M^n  by  these  Presents :  That  we,  the  undersigned,  no  form  ourselves 
into  a  corporation  under  the  provisions  of  the  laws  of  the  Statt;  of  Maryland,  and 
do  certify  : 

First.    That  our  names  in  full,  and  residences,  are  as  follows  : 

Sero/iil.    That  the  name  of  tlic  corporation  shall  be  the  Company 

of  the  City  of  (or  County  of) 

Third.  That  the  purposes  for  which  the  corporation  is  formed  are  as  follows, 
to  wit : 

Fourth.    That  tlic  term  of  existence  siiall  be  forty  (40)  years,  beginning  , 

190  ,  and  ending  ,  190    . 

Fifth.  Tiiat  the  corporation  liereby  created  is  formed  under,  and  suljjcct  <o  (lie 
following  articles,  conditions,  and  provisions,  to  wit :  (here  insert  provisions  for 
the  regulation  of  flie  intcnial  affairs  of  the  eorporafion). 

Sixth.  That  the  place  where  the  operations  of  the  company  shall  be  carried  on 
is  at  ,  and  the  princii)al  office  will  be  located  at 

473 


INCORPOIIATION    AND    ORCANIZATION    OF    CORPORATIONS. 

Seventh.    The  amount  of  canital  stock  shall  be  dollars. 

Eighth.    Tlio  said  stock  siiall  be  divided  into  shares  of  the  par  value  of 

dollars  cacii.  (If  preferred  stock  is  desired,  provision  therefor  should  be 
iuserted  at  this  point.) 

JS'inth.  Tiiat  the  number  of  directors  shall  be  .  That  the  names  of  the 
dirccttirs  who  shall  manage  the  concerns  of  tiie  corporation  for  the  first  year  are 
as  follows : 

Witness  our  hands  and  seals  this  day  of  ,  190   . 


State  of  Maryland,  \ 
County  of     '  S 

I  hereby  certify  that  on  this  day  of  ,  in  the  year  of  ,  before 

me,  a  Notary  Public  in  and  for  said  County  and  State,  personally  appeared  (here 
insert  the  names  of  five  incorporators),  and  did  each  acknowledge  the  aforegoing 
instrument  to  be  their  respective  act. 

In  Testimony  Whereof,  I  have  hereunto  subscribed  my  name  and  affixed  my 
official  seal  the  day  and  year  above  written. 

,  Notary  Public. 

MASSACHUSETTS. 

We,  whose  names  are  hereto  subscribed,  do,  by  this  agreement,  associate  our- 
selves with  the  intention  of  forming  a  corporation  according  to  the  provisions  of 
Chapter  437  of  the  Acts  of  tiie  year  1903,  of  the  Commonwealth  of  Massachusetts, 
and  the  Acts  in  amendment  thereof  and  in  addition  tliereto. 

The  name  by  which  this  corporation  sliall  be  known  is 

The  location  of  the  principal  ofBce  of  the  corporation  within  the  Commonwealth 
is  the  of         ,  and  outside  Commonwealth,  the         of  ,  State  of 

The  purposes  for  which  the  corporation  is  formed  and  the  nature  of  the  busi- 
ness to  be  transacted  by  it  are  as  follows: 

The  total  amount  of  the  capital  stock  to  be  authorized  is  dollars.     The 

par  value  of  its  shares  is,  preferred  dollars,  common  dollars.     The 

number  of  its  shares  is,  prefeiTed  ,  common 

(State  the  restrictions,  if  any,  imposed  upon  the  transfer  of  stock,  and  if  there 
are  to  be  two  or  more  classes  of  stock,  a  description  of  the  different  classes,  and  a 
statement  of  the  terms  on  which  they  are  to  be  created,  and  the  method  of  voting 
thereon.) 

(  State  any  other  provisions  not  inconsistent  with  law  for  the  conduct  and  regu- 
lation of  the  business  of  the  corporation,  for  its  voluntary  dissolution,  or  for  limit- 
ing, defining,  or  regulating  the  powers  of  the  corporation,  or  of  its  directors  or 
stockholders,  or  any  class  of  stockholders.) 

The  first  meeting  shall  be  called  by  of  (or  if  notice  is  waived); 

and  we  hereby  waive  all  requirements  of  the  statutes  of  Massachusetts  for  notice 
of  the  first  meeting  for  organization,  and  appoint  the  day  of 

at       o'clock  M.,  at  as  the  time  and  place  of  holding  said  meeting. 

The  names  and  residences  of  the  incorporators,  and  the  amount  of  stock 

subscribed  for  by  each,  are  as  follows  : 

Name.  Residence.  Amount  subscribed  for. 


In  witness  whereof,  we  have  hereunto  set  our  hands,  this  day  of 

in  the  year  nineteen  hundred  and 

474 


FORMS   AND   PRECEDENTS. 


NOTICE  OF  FIRST  MEETING. 

To 

You  are  liereby  notified,  that  tlie  first  meeting  of  tlie  subscribers  to  an  agree- 
ment to  associate  "themselves  with  the  intention  of  forming  a  corporation  to  be 
known  bv  tlie  name  of  dated  ,  for  the  purpose  of  organizing  said 

corporation  by  the  adoption  of  by-laws,  and  election  of  officers,  and  the  transaction 
of  such  other  business  as  may  properly  come  before  the  meeting,  will  be  held  on 
,  the  day  of  ,  at  o'clock,  M.,  at 

One  of  the  subscribers  to  said  agreement. 

,  190  . 
,  190  . 

State  of  I  g3_ 

County  of  ^ 

I  certify  that  I  have  served  the  foregoing  notice  upon  each  of  the  subscribers 
by  copy  served  as  follows  (state  whether  delivered  in  hand,  or  deposited  in  the 
post-office,  postpaid,  addressed  to  each  at  his  place  of  business  or  residence,  or  left 
at  his  residence  or  usual  place  of  business)  seven  days  at  least  before  the  day 
fixed  for  ♦he  first  meeting. 

ZZZ^ZZZZZ  190     . 
County  of         ,  ss. 

Subscribed  and  sworn  to, 
Before  me, 

,  Justice  of  the  Peace. 

We,  being  a  majority  of  the  directors  of  the  Company, 

elected  at  its  first  meeting  in  compliance  with  the  requirements  of  Section  11  of 
Chapter  437  of  the  Acts  of  1903,  do  iicreby  certify  that  the  following  is  a  true  cony 
of  the  agreement  of  association  to  form  said  corporation,  with  the  names  of  the 
subscribers  tliereto : 

We,  whose  names  are  hereto  subscribed,  do,  by  this  agreement,  associate  our- 
selves with  the  intention  of  forming  a  corporation  according  to  the  provisions  of 
Chapter  437  of  the  Acts  of  the  year  1903  of  the  Commonwealth  of  Massachusetts, 
and  the  acts  in  amendment  thereof  and  in  addition  thereto. 

The  name  by  which  the  cornoration  shall  be  known  is 

The  location  of  the  principal  office  of  the  corporation  within  the  Commonwealth 
is  the  of  ,  and  outside  the  Commonwealth  the  of 

,  State  of  .  p  1     1      • 

The  purposes  for  which  the  corporation  is  formed  and  the  nature  of  the  busmess 
to  be  transacted  by  it  are  as  follows :  j  n  mi 

Tiie  total  amount  of  its  capital  stock  to  be  authorized  is  dollars.     The 

par  value  of  its  sliares  is,  preferred  ,  common  dollars.     The  num- 

Dcr  of  its  shares  is,  [ireferred  ,  common 

(State  any  other  provisions  set  out  in  the  original  certificate.) 

The  first  meeting  shall  be  called  by  of  (or  if  notice  is 

waived),  and  we  hereby  waive  all  requirements  of  the  statutes  of  Massachusetts  for 
notice  of  the  first  meeting  for  organization,  and  ai)point  the  day  of 

at  o'clock,       M.,  at  as  the  time  and  place  of  holding  said  first 

meeting.  ^     r    i     i       u 

Tlie  names  and  residences  of  the  incorporators  and  tlic  amount  ol  stock  suO- 
scribed  for  by  each  arc  as  follows :  ,       ■,    ,  , 

Name.  Residence.  Amount  subscribed  for. 

hi  Witness  Whereof,  we  have  hereunto  set  our  hands  this  day  of  in 

the  year  nineteen  hundred  and  .  i    1 1         n 

That  the  first  meeting  of  the  subscribers  to  said  ngrecment  was  iicld  on  the 
day  of  in  the  year  nineteen  hundred  aud 

475 


iNconronATioN  and  organization  of  corporations. 

Tliat  the  iiniount  of  the  capital  stock  now  to  bo  issued  is  shares  of 

prcfonvil  stock  ami  shares  of  couhhou  stock,  to  be  paid  for  as  follows: 

Amount  anb  Class  of  Stock  Issued. 


Shares  Common. 


lu  Cash  : 

In  full        

By  instalments 

Amount  of   instalment  to  be  paid  before 
commencing  busiuesa 

In  property : 
Real  Estate : 
Location 

Area 

Personal  Property : 

Machinery 

Merchantlise 

Bills  Receivable 

Stocks;  and  Securities 

Patent  l?ights 

Trade  marks 

Copyrights 

Goodwill 

Services 

Expenses 


(State  clearly  the  nature  of  such  services  or  expenses  and  the  amount  of  stock 
to  be  issued  therefor.) 

The  name,  residence,  and  post-office  address  of  each  of  the  officers  are  as  follows : 

Name  of  Office.  Name.  Residence.  P.  0.  Address. 

President, 
Treasurer, 
Clerk  or  Secretary, 
Directors, 

In  IFiiness  Whereof,  we  have  hereunto  signed  our  names  this  day  of 

in  the  year  nineteen  hundred  and 


Commonwealth  of  Massachusetts. 


190 


County  of  ,  ss. 

Then  personally  appeared  the  above-named  ,  and  severally  made 

oath  that  the  foregoing  certificate  by  them  subscribed  is  true  to  the  best  of  their 
knowledge  and  belief. 

Before  me, 

,  Notary  'Public. 

MICHIGAN. 


ARTICLES  OF  ASSOCIATION 

OF 


We,  the  undersigned,  desiring  to  become  incorporated  under  the  provisions  of 
Act  232  of  the  Public  Acts  of  1903,  entitled  "  An  Act  to  revise  and  consolidate  the 

476 


FORMS    AND   PRECEDENTS. 

laws  providing  for  the  incorporation  of  mauufacturiug  and  mercantile  companies  or 
any  union  of  tiie  two,  and  for  the  incorporation  of  companies  carrying  on  any  other 
lawful  business  except  such  as  are  precluded  from  organization  under  this  act  by  its 
express  provisions,  and  to  orescribe  the  powers  and  to  fix  the  duties  and  liabilities 
of  such  corporations,"  and  the  acts  amendatory  thereof  and  supplementary  thereto, 
do  hereby  make,  execute,  and  adopt  the  following  articles  of  association,  to  wit : 

Article  I. 

The  name  assumed  by  this  association,  and  by  which  it  shall  be  known  in  law, 
is 

Article  II. 
The  purpose  or  purposes  of  this  corporation  are  as  follows  : 

Article  III. 

The  principal  place  at  which  operations  are  to  be  conducted  is  at 

,  in  the  County  of  ,  State  of 

Article  IV. 

The  capital  stock  of  the  corporation  hereby  organized  is  the  sum  of 
dollars,  of  wliicli  dollars  shall  be  common  stock,  and  dollars 

shall  be  preferred  stock.  The  preferred  stock  shall  be  subject  to  redem])tion  at  par 
on  the  day  of  ,  A.  D.  190  ,  and  the  holder  shall  be  enlitled  to 

a  dividend  of  per  cent  per  annum,  ])avable  ,  which  shall  be 

cumulative  and  payable  before  any  dividend  shainje  set  apart  or  paid  on  the  com- 
mon stock.     The  preferred  stockholders  shall  be  entitled  to  vote  for  directors. 

Article  V . 

The  number  of  shares  into  which  the  capital  stock  is  divided  is  of  the 

par  value  of  dollars  each. 

Article  VI. 

The  amount  of  common  stock  subscribed  is  dollars.     The  amount  of 

preferred  stock  subscribed  is  dollars. 

Article  VII. 

The  amount  of  common  stock  actually  paid  in  is  the  sum  of  dollars, 

of  wliicli  dollars  lia.s  bc^eu  naid  in  cash,  and  dollars  has  l)ccn 

paid  in  other  property,  an  itemized  description  of  which,  with  the  value  at  which 
each  item  is  taken,  is  as  follows,  viz.: 

The  amount  of  preferred  stock  nclually  ])aid  in  is  the  sum  of  dollars,  of 

which  dollars  has  bccwi  paid  in  ciusli,  and  dollars  has  been  jmid 

in  other  property,  an  itemizfd  descriptiou  of  which,  with  the  vahmliou  at  which 
each  item  is  taken,  is  as  follows,  viz. : 

Article  VIII. 

The  office  in  the  State  of  Michigan  for  the  transaction  of  business  sliall  be  kept 
at 

477 


INCORPORATION    AND   ORGANIZATION   OF  CORPORATIONS. 

Article  IX. 

The  term  of  existence  of  this  corporation  is  fixed  at  years  from  the  date 

hereof. 

Article  X. 

The  names  of  the  stockholders,  their  respective  residences,  and  the  number  of 
shares  of  stoclc  subscribed  for  by  each  are  as  follows  : 

Names.  Residence.  No.  of  Shares. 

In  Jntness  Whereof,  wc,  the  parties  hereby  associating,  for  the  purpose  of  giving 
lesjal  cfTcet  to  these  articles,  hereunto  sign  our  names,  this  day  of  , 

K.\).  190  . 

Names.  Names. 


MINNESOTA. 
ARTICLES  OF  INCORPORATION 

OP 


Article  I. 
The  name  of  this  corporation  sliall  be : 

Article  II. 

The  general  nature  of  the  business  of  this  corporation  shall  be: 
The  principal  place  of  business  of  said  corporation  shall  be : 

Article  III. 

The  time  of  commencement  of  said  corporation  shall  be  ,  and  said 

corporation  shall  continue  for  the  period  of  years  from  said  date. 

Article  IV. 

The  capital  stock  of  said  corporation  shall  be  dollars,  to  be  divided  into 

shares  of  dollars  each,  and  shall  be  paid  for  in 

when  subscribed  for  and  issued. 

Article  V. 

The  highest  amount  of  indebtedness  or  liability  to  which  said  corporation  shall 
at  any  time  be  subject  shall  not  exceed  % 

Article  VI. 

The  names  and  places  of  residence  of  the  persons  forming  said  corporation 
are: 

Article  VII. 

The  government  of  said  corporation  and  the  management  of  its  affairs  shall  be 
vested  in  a  board  of  directors,  composed  of  not  less  than  nor  more  tlian 

478 


FORMS  AND   PRECEDENTS. 

,  all  of  whom  sliall  be  elected  from  the  stockholders  of  said  corporation, 
and  a  majority  of  whom  sliall  be  elected  by  the  stockholders  at  the  regular  annual 
meeting  thereof,  which  shall  be  held  at  the  general  oLice  of  the  company,  in  the 
City  of  ,  on  the  of  ,  and  shall  hold  office  until  their 

successors  are  elected  and  qualified.  The  method  of  electing  said  directors  shall  be 
declared  and  provided  for  by  the  By-Laws.  Until  the  first  annual  meeting  of  the 
stockholders  the  folio wing-nauied  persons  shall  constitute  the  Board  of  Directors : 

Article  Fill. 

The  officers  of  this  corporation  shall  be  a  President,  Vice-President,  Secretary, 
Treasurer,  and  ,  all  of  whom  shall  be  chosen  by  the  Board  of  Directors, 

and  any  two  of  said  offices,  except  those  of  President 'and  Vice-President,  and 
President  and  Treasurer,  may  be  held  by  the  same  person,  and  such  Board  of 
Directors  shall  have  such  other  officers  or  agents  as  the  interest  of  the  corporation 
shall  from  time  to  time  demand.  Until  the  first  annual  meeting  of  the  Board  of 
Directors,  and  until  their  successors  are  elected  and  have  qualified,  shall 

be  President  and  .  Vice-President,  ,  Secretary, 

and  Treasurer. 

Witness  our  hands  and  seals  this         day  of  ,  190  . 

In  presence  of 


State  of  Minnesota, 
County  of 

On  this  day  of  ,  190    ,  personally  appeared  before  me 

,  all  to  me  known  to  be  the  parties  who  signed  the  foregoing 
instrument,  and  each  for  himself  acknowledged  that  he  signed  the  same  as  his^  free 
act  and  deed,  for  the  uses  and  purposes  therein  expressed. 

,  Notary  Public, 
(s£alO  Co.,  Minn. 


MISSISSIPPI. 
THE  CHARTER  OF  INCORPORATION 


Section  One.    Be  it  known.  That  and  their  associates,  successors, 

and  assigns,  arc  hereby  created  and  constituted  a  body  corporate,  and  as  such  shall 
Lave  succession  for  a  period  of  fifty  years. 

Section  Two.    The  domicile  of  said  corporation  sliall  be  at.  , 

Mi8sissi|)|)i,  but  may  be  cliaiigod  to  any  otiicr  point  within  Mississippi  by  a  vote  of 
the  holders  of  a  majority  of  tlie  stock  of  said  ror|ii)ralioii. 

Section  Three.  Said  corporation  is  empowered  and  authorized  to  have  and  to 
hold,  receive,  purchase,  and  enjoy  real  estate  and  personal  properly,  and  (lie  .same, 
or  any  part  tliereof,  to  sell,  rent,  lea.se,  convey,  mortgage,  or  olhersvise  enriimber; 
to  issue  notes,  bonds,  debentures  or  other  evidences  of  (lel)ls;  to  sut;  and  be  sued, 
contract  and  be  contracted  with;  to  [ilead  and  be  impleaded  in  tiie  courts  of  the 
country  ;  to  use  a  common  seal,  and  the  same  to  eliange,  alter,  or  renew  at  pleasure. 
And  said  corporation  is  further  aiitiiorized  and  empowered  to  do  all  otlier  nets 
necessary  to  promote  its  welfare  wliieli  are  not  in  coniliet  with  the  laws  of  the  State 
of  Mississippi  or  of  the  United  Stales  of  America.  And  said  corporation  shall  have 
and  enjov  all  the  powers,  privileges,  and  rights  conferred  u|>oii  cor|torations  by 
Chapter  25  of  the  Annotated  Code  of  ]S02. 

Section  Four.   The  purposes  for  which  the  corporation  is  created  arc,  and  it  is 

479 


INCORPORATION  AND   ORGANIZATION   OF   CORPORATIONS. 

licreby  authorized  and  empowered  to  ,  and  said  corporation  is  further 

authorized  to  do  all  acts  necessary  and  convenient  in  tiic  judgment  ol"  the  olUeers  or 
directors  of  said  corj)oration,  for'tlie  welfare  and  husiness  of  said  corporation;  and 
said  corporation  shall  have,  possess,  and  enjoy  all  the  rights,  powers,  and  privileges 
enumerated  in  or  created  or  conferred  by  Chapter  25  of  the  Annotated  Code  of 
1S92,  which  arc  uccessary  and  proper  for  carrying  out  the  purposes  of  this 
charter. 

Sfctioii  Five.  The  capital  stock  of  said  corporation  shall  be 
divided  into  shares  of  each,  but  said  capital  stock  may  be  increased  or 

diminisiied  at  any  time  by  a  vote  of  the  holders  of  a  majority  of  the  capital  stock  of 
said  corporation. 

Sir/io>i  Six.  The  management  of  the  business  of  said  corporation  shall  be  con- 
fined to  such  a  number  of  directors  as  may  be  fixed,  uiul  altered  fron\  time  to  time, 
by  a  vote  of  a  majority  of  the  stock  issued  by  said  corporation;  said  directors  shall 
be  stockholders  of  said  corporation ;  the  majority  of  said  directors  shall  constitute 
a  quorum  for  the  transaction  of  business.  The  said  directors  shall  elect  from  their 
number  a  President,  and  also  elect  a  Vice-President,  a  Secretary,  and  a  Treasurer, 
aud  may  appoint  or  elect  such  other  officers,  agents,  or  employees  as  they  may  deem 
proper ;  shall  hold  ofiice  until  their  successors  are  duly  elected  and  shall  have 
qualified,  and  shall  have  power  to  fill  all  vacancies  in  their  number  caused  by  death, 
resignation,  or  otherwise. 

Section  Seven.  The  directors  of  said  corporation  shall  have  power  and  authority 
to  make  auy  and  all  needful  rules,  by-laws,  and  regulations  for  the  control  and  man- 
agement of  the  business  affairs  and  property  of  said  corporation,  and  may  from 
time  to  time  alter  or  renew  the  same  as  they  may  see  fit. 

Section  Eight.  At  all  stockholders'  meetings  a  vote  of  the  holders  of  a  majority 
of  the  stock  then  present  in  person  or  by  proxy  shall  decide  all  questions  legally 
submitted  at  sueli  meeting.  Each  stockholder  shall  be  entitled  to  one  vote  for  each 
share  of  stock  held  by  him,  it,  or  her,  but  all  elections  of  directors  or  managers  of 
said  corporation  shall  be  held  in  accordance  with  Section  194  of  the  Constitutiou 
of  Mississippi  aud  Section  837  of  the  Annotated  Code  of  Mississii)pi. 

Section,  Nine.  No  stockholder  of  any  such  corporation  shall  be  in  any  way 
personally  liable  for  the  debts  of  said  corporation  beyond  the  amount  of  his,  her,  or 
its  unpaid  subscription  to  said  stock. 

Section  Ten.  All  subscriptions  to  said  capital  stock  shall  be  paid  for  in  cash  or 
property. 

Section  Eleven.  Any  two  of  said  incorporators  may  open  books  of  subscription 
to  the  capital  stock  of  said  corporation,  and  as  soon  as  shall  have  been 

subscribed,  said  corporation  may  organize,  elect  directors,  aud  commence  business. 

Witness  our  hands  and  seals  this         day  of 
State  of  I  gg 

County  of  ) 

Personally  appeared  before  me  the  within  named 

,  who  acknowledged  that  they  signed  and  delivered  the 
foregoing  instrument  on  the  day  and  year  therein  mentioned. 

Given  under  my  hand  and  official  seal  this  the  day  of  ,  190  . 


MISSOURI. 

FORM    FOR    INCORPORATING    MANUFACTURING   AND    BUSINESS 

CORPORATIONS. 

Know  all  Men  by  these  Presents  :  That  we,  the  undersigned,  desirous  of  forming 
a  corporation  under  the  laws  of  Missouri,  and  more  particularly  under  tlie  provis- 
ions of  Article  IX.  Chapter  12,  R.  S.  1899,  governing  the  formation  of  manufactur- 
ing and  business  companies,  do  hereby  enter  into  the  following  agreement : 

480 


FORMS   AND   PRECEDENTS. 

First.  That  the  name  of  the  corporation  shall  be  (Name  designating  the  busi- 
ness contemplated ;  but  not  the  name  of  any  corporation  existing  under  tlie  laws  of 
iliis  State  for  similar  purposes.  When  the  name  of  a  person  or  firm  is  assumed,  it 
must  be  joined  with  some  word  designating  the  business  to  be  carried  ou,  followed 
by  the  word  "  company  "  or  "  corporation"). 

Second.   That  the  corporation  shall  be  located  in  the  City  of  , 

County,  Missouri. 

Third.   That  the  amount  of  the  capital  stock  shall  be  (not  less  than 

§2,000  nor  more  than  §10,000,000)  dollars,  divided  into  sliarcs  of  the 

par  value  of  dollars  each  (if  preferred  stock  is  desired,  provision  therefor 

should  be  inserted  here)  ;  that  the  same  has  been  bona  fide  subscribed  and 
(not  less  than  one-half)  thereof  actually  paid  up  in  lawful  money  of  the  United 
States,  and  is  in  the  custody  of  the  persons  hereinafter  named  as  the  first  Board 
of  Directors. 

Fourth.  That  the  names  {iiot  less  than  three),  places  of  residence  of  the  share- 
holders, and  the  number  of  shares  subscribed  by  each  are : 

Name.  Residence.  Number  of  Shares. 


Fifth.   That  the  Board  of  Directors  shall  be  composed  of  shareholders 

(not  less  than  three  nor  more  than  thirteen,  at  least  three  of  whom  shall  be 
citizens  and  residents  of  Missouri)  ;  and  the  names  of  those  agreed  on  for  tlie  first 
year  are  ,  ,  '        ,  ,  ^ 

Sixth.   Tliat  the  corporation  shall  continue  for  a  term  of  (not  exceed- 

ing fifty)  years. 

Seventh.  That  the  corporation  is  formed  for  the  following  purposes  (see 
sec.  1319  of  the  Revised  Statutes  of  Missouri)  : 

In,  Testimony  Whereof,  we  have  hereunto  set  our  hands  tliis         day  of  , 

190  . 


State  of  Missouri,  \ 
County  of  \ 

On  this  day  of  ,       190  ,  before  me  personally  appeared 

(names  of  all  tlie  stockholders),  to  me  known  to  be  tiie  iicrsous  de- 
scribed in  and  who  executed  the  foregoing  instrument  and  acknowledged  that  they 
executed  the  same  as  their  free  act  and  deed. 

In.  Testimony  Whereof  I  have  hereunto  set  my  hand  and  affixed  my  notarial 
seal  the  day  and  year  last  above  mentioned. 

,  Notary  Public- 

My  commission  expires  ,  190     . 

(seal.) 


MONTANA. 

State  of  ^Montana,    ) 
County  of  \ 

We,  ,  do  by  these  prescnfe,  jpursuant  to  and  in  conformit/\'  witli 

Article  T.  of  Chapter  I.,  Title  I.,  and  Part  IV.  of  the  Civil  Code  of  the  Slate  ol  Mon- 
tana,  associate  ourselves  together,  and  do  hereby  adopt  the  following  Articles  of 
Incorporation  : 

1.    The  corporate  name  of  said  company  is  hrrfby  derlarcd  to  be: 
2     The  objects  for  which  the  company  is  formed  arc  as  follows: 
31  481 


INCORPORATION    AND   ORGANIZATION  OF   CORPORATIONS, 
r 

3.  Tlic  names  of  the  city,  town,  or  locality,  and  county  iu  which  the  operations  of 
the  said  company  arc  to  be  carried  on  are  : 

4.  The  said  company  shall  commence  on  the  day  of  in  the 
year  one  thousand  nine 'hundred  and  ,  and  shall  continue  iu  existence  for 
"the  term  of                years. 

5.  The  number  of  trustees  who  shall  manage  the  concerns  of  said  company  for  the 
first  three  mouths,  shall  be  ,  and  tlieir  names  and  addresses  are 

6.  Tiie  ea])ital  stock  of  the  said  company  sliall  be  dollars,  which  shall 
be  divided  into               sliares  of                dollars  each. 

7.  Amount  actually  subscribed  is  dollars,  subscribed  by  (here  insert 
names  and  addresses  of  subscribers). 

8.  The  stock  is  assessable. 

Witness  Our  hands  and  seals,  this  day  of  ,  190    . 


State  of  Montana,   } 
County  of  > 

On  this  day  ,  A.  D.  190    ,  before  me  ,  a 

iu  and  for  said  county  and  State,  personally  appeared  ,  whose  names 

are  subscribed  to  the  foregoing  instrument  as  tlie  parties  thereto,  known  to  me  to  be 
the  same  persons  described  iu,  and  who  executed  the  said  foregoing  instrument,  and 
who  eacli  of  them  duly  acknowledged  to  me  that  they  each  of  tliem  respectively 
executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal 
the  day  and  year  iu  this  certificate  first  above  written.       


NEBRASKA. 
ARTICLES  OF  INCORPORATION 

OF   TUE 

Company, 


We,  the  undersigned,  incorporators,  do  hereby,  in  pursuance  of  the  Statutes  of 
the  State  of  Nebraska  in  such  cases  made  and  provided,  associate  ourselves  as  a  body 
pohtic  and  corporate  iu  the  manner  and  for  the  purposes  hereinafter  mentioned. 

Art.  I. 

The  said  corporation  shall  be  named  and  known  as  Company. 

Art.  11. 

The  principal  place  of  transacting  the  business  of  the  corporation  shall  be  in  the 
City  of  ,  Couuty,  Nebraska. 

Art.   III. 

The  general  nature  of  the  business  to  be  transactcv.  by  the  corporation  is: 

Art.  IF. 

The  authorized  capital  stock  of  the  corporation  shall  be  dollars,  divided 

into  shares   of  dollars  each  ;   which  shall  be  fully  paid  up 

when  issued,  of  such  shares  shall  be  subscribed  for  and  fully  paid  up 

upon  the  organization  of  the  corporation,  the  remaining  shares,  or  any  part 

thereof,  may  be  issued  at  any  time  by  the  Board  of  Directors.  The  stockholders  of 
the  company  shall  be  entitled  to  a  pro  rata  distribution  of  all  subsequent  issues  of 
stock,  in  such  manner  and  under  such  rules  and  regulations  as  may  be  prescribed 
by  the  Board  of  Directors.  Said  stock  may  be  paid  for  in  cash,  or  its  equivalent 
in  property  necessary  and  useful  to  the  corporation  iu  the  transaction  of  its  business. 

482 


FORMS   AND    PRECEDENTS. 

Art.   r. 

The  highest  amount  of  indebtedness  or  liability  to  which  the  corporation  may  at 
any  time  subject  itself  shall  not  exceed  an  amount  equal  to  per  cent  of 

the  capital  stock  issued. 

Art.  VI. 

The  corporation  shall  date  from  and  commence  on  the  day  of 

190  ,  and  it  shall  terminate  on  the  day  of  ,  190  .  ' 

Art.  VU. 

The  affairs  and  business  of  the  corporation  shall  be  conducted  by  a  Board  of 
Directors,  and  by  the  officers  by  them  to  be  elected,  as  hereinafter 
provided. 

Art.   nil. 

The  first  meeting  of  the  stockholders  shall  be  held  on  the  date  of  the  commence- 
ment of  the  corporation,  or  as  soon  thereafter  as  practicable,  and  thereafter  their 
regular  annual  meeting  shall  be  held  in  the  City  of  on  the 

day  of  ,     At  said  first  meeting,  and  at  the  annual  meetings  thereafter, 

the  Board  of  Directors  shall  be  elected  by  tlie  stockholders  from  their'own  number, 
to  hold  office  until  the  annual  meeting  next  after  their  election  and  until  their  suc- 
cessors are  elected  and  qualified. 

Art.  IX. 

The  Directors  shall  in  each  instance,  as  soon  as  convenient  after  their  election, 
elect  from  their  own  nuiiib(!r  a  President,  Vice-President,  Secretary,  and  Treasurer, 
who  shall  hold  office  until  the  annual  meeting  next  after  their  election  and  until 
their  successors  are  elected  and  qualified.  Any  two  of  said  offices  may  be  held  by 
cue  and  the  same  person,  except  the  offices  of  President  and  Vice-President. 

Art.  X. 

The  Board  of  Directors  shall  have  full  power  and  authority  to  make  all  rules 
and  by-laws  for  the  jjroper  government  and  control  of  all  the  business  affairs  of  the 
corporation,  and  they  may  alter  and  amend  the  same  at  pleasure. 

Art.  XI 

Vacancies  occurring  in  the  Board  of  Directors  shall  be  filled  by  the  stockhold- 
ers, and  other  offices  vacant  from  whatever  cause  shall  be  filled  by  the  Board  of 
Directors. 

Art.  XU. 

These  articles  of  incorporation  may  be  amended  at  any  time.  Every  amend- 
ment shall  be  first  approved  by  a  two-thirds  vote  of  the  entire  Moard  of  r)ircctor8, 
and  upon  boiiif^  so  a|)provcd,  it  shall  h(;  entered  at  large  u|)ou  the  records  of  the 
Board.  A  draft  of  the  proposed  amcndniciit  or  aineiulincnts.  as  the  case  maybe, 
shall  then  be  submitted  to  each  stockiiolder,  with  I  lie  notice  of  (he  meeting  called 
for  the  purpose  of  voting  upon  tlie  same,  wliicii  notice  sliall  be  given  ten'  days  at 
least  prior  to  the  date  fixed  for  the  meeting.  If  such  amendment  or  amendinl-nls, 
or  either  of  them,  shall  then  be  aj.proved  by  (he  holder  or  holders  of  two-thirds  of 
the  capital  stock  of  the  cornorafion,  each  and  every  amendment  so  approved  shall 
be  considered  adopted  and  be  made  a  part  of  the  Articles  of  Ine<trjiura(i(.n,  and 
the  Hoard  of  Directors  shall  thereafter  subscribe,  acknowledge,  record,  and  pul)lish 
the  same,  as  l)y  law  required. 

In  Testimony  Whereof,  we  have  hereunto  set  our  hands  this  day  of 

In  presence  of : 


483 


INCORPORATION   AND  ORGANIZATION   OF   CORPORATIONS. 

State  of  Nebraska,   ?  ss. 
County  of  ^ 

On  tliis  day  of  personally  before  nic  (name  of  officer  and  title 

of  otl'ioe  lioUl)  in  and  for  County,  Nebraska,  duly  eommissioned  and 

qnalitiod  canio  ,  to  me  well  known  to  be  the  identical  persons  whose 

names  arc  affixed  to  the  foregoing  articles  of  incorporation,  and  tiiey  severally  ac- 
knowlodgod  the  execution  of  the  same  to  be  their  voluntary  act  and  deed  for  the 
purposes  in  said  articles  expressed.  In  testimony  whereof  I  have  hereunto  sub- 
scrioed  my  hand  and  affixed  my  official  seal  the  day  and  date  last  above  written. 

Notary  Public, 

County, 
Nebraska. 


NEVADA. 
AUTICLES  OF  INCORPORATION 


Company. 


Knoio  all  Men  by  these  Presents:  That  we,  the  undersigned,  have  this  day 
voluntarily  associated  ourselves  together  for  the  purpose  of  forming  a  corpora- 
tion under  the  laws  of  the  State  of  Nevada ;  and  we  hereby  certify: 

First.   The  name  of  this  corporation  is 

Second.  The  location  of  the  principal  office  of  this  corporation  in  the  State  of 
Nevada  is  in  the  Building,  Number  Streets,  in  the  City  of  , 

County  of  ,  and  State  of  Nevada. 

Third.   The  objects  for  which  this  corporation  is  formed  are: 

Fourth.   Tiie  total  authorized  capital  stock  of  this  corporation  shall  be 
dollars  (not  less  than  S2,000),  divided  into  shares  of  the  par  value  of 

dollars  ])er  share.  The  amount  of  subscribed  capital  stock  witti  which  it  will  com- 
mence l)usiness  is  dollars  (not  less  than  $1,000).  The  amount  actually 
subscribed  is  dollars,  and  the  amount  actually  paid  up  is  dollars. 
(At  this  point  should  be  stated  a  description  of  different  classes  of  stock,  terms  of 
their  creation,  and  amount  of  each  class  subscribed,  and  the  amount  paid  thereon  ; 
or  if  a  non-stock  corporation,  state  the  terms  and  condition  of  membership.) 

Fifth.  The  names  and  post-office  addresses  and  residences  of  each  of  the  origi- 
nal subscribers  to  the  capital  stock,  and  the  amount  subscribed  by  each  are  as 
follows  : 

Names  (not  less  than  three).  P.  0.  Address  and  Residence.  No.  of  Shares. 
Amount  subscribed. 

Sixth.   The  period  of  existence  of  this  corporation  is  unlimited. 

Seventh.  The  members  of  the  Governing  Board  of  this  corporation  shall  be 
styled  directors,  and  shall  be  in  number. 

'  Eighth.  The  capital  stock  of  this  corporation  after  the  amount  of  the  subscribed 
price  or  par  value  has  been  paid  in,  or  it  has  been  issued  as  fully  paid  up,  shall  not 
be  subject  to  assessment  to  pay  debts  of  the  corporation. 

(Tjiiless  provision  is  made  in  these  articles  for  assessment  upon  paid  up  stock, 
no  paid  up  stock,  and  no  stock  issued  as  fully  paid  up,  can  ever  be  assessable  or 
assessed,  and  tlie  articles  of  incorporation  cannot  be  amended  in  this  particular.) 

Ninth.  (Here  may  be  added  such  regulations  and  details  as  may  be  desired  for 
regulating  the  business,  officers,  etc.) 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  this  day  of  , 

A.  D.  19    , 

(Signatures.) 
Witnesses : 

484 


FORMS  AND   PRECEDENTS. 

State  of  ) 

County  of  I  ''^" 

Be  it  remembered  that  on  this  day  of  ,  A.  D.  190  ,  personally 

appeared  before  me,  a  in  and  for  said  Couuty  and  State,  , 

known  to  me  to  be  the  persons  described  in,  and  who  executed  the  foregoing 
instrument,  who  acknowledged  to  me  that  they  executed  the  same  freely  and 
voluntarily,  and  for  the  uses  and  purposes  therein  mentioned. 


NEW    HAMPSHIRE. 

ARTICLES   OF  AGREEMENT. 

The  undersigned,  being  persons  of  lawful  age,  hereby  associate  under  the  pro- 
visions of  Chapter  147  of  the  Public  Statutes  of  New  Hampshire,  by  the  following 
articles  of  agreement : 

Article  1.    The  name  of  this  corporation  shall  be : 
Article  2.    The  object  for  which  this  corporation  is  established  is : 
Article  3.    The  place  in  whicli  the  business  of  this  corporation  is  to  be  carried 
on  is: 

Article  4.    The  amount  of  the  capital  stock  to  be  paid  in  sliall  be : 
Article  5.   The  first  meeting  of  the  corporators  shall  be  held  : 

Names  (at  least  five).  Post-Office  Address. 


NEW   JERSEY. 
CERTIFICATE  OF  INCORPORATION 

OF  THE 


We,  the  undersigned,  in  order  to  form  a  corporation  for  the  purposes  herein- 
after set  forth,  under  and  pursuant  to  the  provisions  of  the  Act  of  (lie  Lejjishiture 
of  the  State  of  New  Jersey,  entitled  "An  Act  Concerning  Corporations  (Revision 
of  1896),"  and  the  acts  amendatory  tliereof  and  supplemental  thereto,  do  hereby 
certify  as  follows  : 

Article  L 

The  name  of  tlie  corporation  is  : 

Article   IT. 

Tiic  principal  and  registered  office  of  the  Company  is  in  the 

Jiuilcliiig,  ,  New  Jersey,  and  tlic  nainn  of  the  agent   therein 

and  in  charge  thereof,  and  upon  wlioui  ])roccss  against  this  corporation  may  bo 
served,  is 

Article    III. 

The  objects  for  wliich  and  for  each  of  wiiirli  the  coqioration  is  fonned  are  : 
It  is  the  int-ention  that  the  obiectH,  i)iir|)oscs,  find  powers  specified  in  tlie  clauses 
contained  in  this  third  paragraph  shall,  except  where  otherwise  expressed  in  said 

485 


INCORPORATION   AND   ORGANIZATION    OP   CORPORATIONS. 

paragrnpli,  be  nowise  linutcd  or  restricted  by  reference  to  or  inference  from  tlie 
terms  of  any  other  clause  of  this  or  any  otlier  paragraph  in  this  charter,  but  that 
tlie  objects,  purposes,  ami  powers  specitied  in  each  of  the  clauses  of  this  paragraph 
shall  be  regarded  as  iudepeudeut  objects,  i)urposcs,  and  powers. 

Article  IV. 

The  foUowiug  provisions  for  the  regulation  of  the  business  and  the  conduct  of 
the-allairs  of  tlie  Compauy  are  hereby  established  : 

The  corporation  nuiy  iisc  and  ai)ply  its  surplus  earnings  or  accumulated  profits 
authorized  by  law  to  be  reserved,  to  the  purchase  or  acquisition  of  property,  and  to 
the  purchase  or  acquisition  of  its  own  capital  stock  from  time  to  time,  to  such  extent 
and  iu  such  mauuer  and  upon  such  terms  as  its  Board  of  Directors  shall  determine; 
and  neither  the  property  nor  the  capital  stock  so  purchased  and  acquired,  nor  any 
of  its  capital  stock  taken  in  payment  or  satisfaction  of  any  debt  due  to  the  corponi- 
tioii,  shall  be  regarded  as  proflts  for  the  purposes  of  declaration  or  payment  of  divi- 
dends, unless  01  licrwise  determined  by  a  majority  of  the  Board  of  Directors  or  a 
majority  of  the  stockholders. 

The  corporation  iu  its  by-laws  may  prescribe  the  number  necessary  to  constitute 
a  quorum  of  the  Board  of  Directors,  which  uuuiber  may  be  less  than  a  majority  of 
the  whole  number. 

The  Board  of  Directors  shall  have  power,  without  the  assent  or  vote  of  the 
stockholders,  to  make,  alter,  rescind,  or  amend  the  by-laws  of  the  corporation,  to 
fix  the  amount  to  be  reserved  as  working  capital,  to  authorize  and  cause  to  be 
executed  mortgages  and  liens  upon  the  real  and  personal  property  of  the  corpora- 
tion ;  and  from  time  to  tiuie  to  sell,  assign,  transfer,  or  otherwise  dispose  of  any  or 
all  of  the  property  of  the  corporation,  but  no  such  sale  of  all  the  propert^y  shall  be 
made  except  pursuant  to  the  vote  of  at  least  two-thirds  of  the  Board  of  Directors. 

The  Board  of  Directors  from  time  to  time  shall  determine  whether  and  to 
what  extent,  and  at  what  times  and  places,  and  under  what  conditions  and  regu- 
lations, the  accounts  and  books  of  the  corporation,  or  any  of  them,  shall  be  open  to 
the  inspection  of  the  stockholders;  and  no  stockholder  shall  have  any  right  of 
inspecting  any  account  or  book  or  document  of  the  corporation,  except  as  conferred 
by  statute  or  authorized  by  the  Board  of  Directors,  or  by  a  resolution  of  the 
stockholders. 

Tiie  Board  of  Directors  shall  have  power  to  bold  its  meetings,  to  have  one  or 
more  offices,  and  to  keep  the  books  of  the  corporation  (except  the  stock  and  trans- 
fer books)  outside  of  the  State  of  New  Jersey  at  such  places  as  may  be  from  tune 
to  time  designated  by  them. 

Article   V. 

The  Company  shall  be  authorized  to  issue  capital  stock  to  the  amount  of 
dollars.     The  number  of  shares  of  which  the  capital  stock  shall  consist  is 
shares  of  the  par  value  of  dollars  each.     (If  preferred  stock,  is  desired,  insert 

provisions  therefor  at  this  point.) 

Article    VI. 

The  names  and  post-office  addresses  of  the  incorporators,  and  the  number  of 
shares  of  stock  for  which  severally  and  respectively  we  do  hereby  subscribe,  the 
aggregate  of  our  said  subscrij)tions  being  dollars,  is  the  amount  of  capital 

stock  with  which  the  Company  M-ill  begin  business,  are  as  follows  : 

Names.  Post-Oflice  Addresses.  No.  of  Shares. 

Article    VII. 
The  duration  of  the  Company  shall  be  perpetual. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  this  day 

of  190 . 


(L.S.) 
(L.  S.) 
(L.  S.) 


486 


FORMS   AND   PRECEDENTS. 

State  of  >  gg 

County  of  ) 

Be  li  Remembered,  that  on  this  day  of  ,  190  ,  before  me,  a  Notary 

Public  in  and  for  said  County,  personally  appeared  ,  who  I  am  satisfied 

are  the  persons  named  in,  and  who  executed  the  foregoing  certificate,  and  I  having 
first  made  known  to  them  the  contents  thereof,  they  did  each  acknowledge  that 
they  signed,  sealed,  and  delivered  the  same  as  their  voluntary  act  and  deed. 

,  Notary  Public. 

(For  use  when  acknowledgment  is  taken  out  of  the  State.) 

State  of 
County  of 

I,  Clerk  of  the  County  of  and  also  Clerk   of  the  Supreme 

Court  for  the  said  County,  the  same  being  a  Court  of  record.  Do  Hereby  Certify  that 
,  whose  name  is  subscribed  to  the  Certificate  of  the  proof  or  acknowledg- 
ment of  the  annexed  instrument  and  thereon  written,  was  at  the  time  of  the  taking 
of  such  proof  of  acknowledgment  a  Notary  Public,  in  and  for  said  County,  duly  com- 
missioned and  sworn  and  authorized  by  the  laws  of  said  State  to  take  the  acknowl- 
edgments and  proofs  of  deeds  or  conveyances  for  lands,  tenements,  or  hereditaments, 
in  said  State  of  .     And  further,  that  I  am  well  acquainted  with  the 

handwriting  of  such  Notary  Public,  and  verily  believe  that  the  signature  to  said 
certificate  of  proof  of  acknowledgment  is  genuine. 

In  testimony  whereof,  I  have  hereunto  set  my  hand  and  affixed  the  seal  of  the 
said  Court  and  County  the         day  of         ,    190 


Clerk, 


NEW    MEXICO. 
ARTICLES  OF  INCORPORATION 

OF    THE 

Company. 


We,  the  undersigned,  for  ourselves,  our  associates  and  successors,  have  asso- 
ciated ourselves  together  for  the  purpose  of  forming  a  corporation  under  the  laws 
of  the  Territory  of  New  Mexico,  United  States  of  America,  and  we  hereby  certify 
and  declare  as  follows: 

I.  The  full  namea  of  said  persons  desiring  to  form  this  Company  are  as  follows: 

II.  The  corporate  name  of  the  Company  is: 

III.  The  objects  for  which  the  Company  is  formed  and  its  purposes  are  as 
follows : 

IV.  The  amount  of  capital  stock  and  the  number  of  sliarcs  into  which  the  same 
shall  be  divided  is  dollars,  which  shall  be  divided  into  shares  at 
the  j)ar  value  of                  dollars  each. 

V.  The  term  of  existence  of  the  said  corporation  is  fifty  years  from  the  date  of 
this  writing. 

VI.  Tlic  Hf)ard  of  Directors  and  their  names  who  shall  manage  the  concerns  of 
the  Company  for  the  first  three  months  arc  dircolors,  all  of  wliom  are 
citizens  of  tiic  United  Slates,  and  one-third  of  whom  are  residents  of  New  Mexico, 
■whose  names  and  addresses  are  as  follows : 

VII.  The  names  of  the  city  and  county  where  the  principal  jilace  of  business  is 
to  be  located  is  the  City  of  ,  County  of  ,  Tcr.  of  New  Mexico. 

In  Tetlimotiy  Whereof,  wc  have  hereunto  set  our  bauds  and  seals  this 
day  of  ,  190  . 

State  of  \  j,g 

County  of  \ 

I  certify  that  on  this  <lay  of  .190    ,  before  mr  personally 

came  »  to  rnc  personally  known,  and  known  to  mc  to  be  the  same 

487 


INCORPORATION   AND  ORGANIZATION  OF   CORPORATIONS. 

persons  iloscrilied  in  and  wlio  executed  the  foregoing  instrument    and  severally 
dulv  acknowledged  to  me  that  they  had  sigued  and  executed  the  same. 

///  If'if/it'.is  U'lirirof,  I  have  licrcunto  set  my  hand  and  affixed  my  official  seal 
lit  said  County  the  day  aud  year  last  above  written. 

,  Notary  Public, 

County. 
Teruitouy  of  Nkw  Mkxico. 
Office  ot  the  Secretary. 
Certificate. 
I,  ,  Secretary  of  the  Territory  of  this  office,  do  hereby  certify  there 

was  filed  for  record  in  this  office,  at  o'clock,     M.,  on  the  day  of  , 

A.  D.  190  , 

Articles  of  Incorporation 

OF   TUE 

Company, 


aud  also,  that  I  have  compared  the  foregoing  copy  of  the  same  with  the  original 

thereof  now  on  lile,  aud  declare  it  to  be  a  correct  transcript  therefrom  and  of  the 

whole  thereof. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  aud  affixed  my  official  seal 

this  day  of  ,  190  .  .,r      ,r    • 

,  Secretary  of  New  Mexico. 


NEW    YORK. 
CERTIFICATE  OF  INCORPORATION 

OF   THE 


We,  the  undersigned,  all  natural  persons  of  full  age,  two-thirds  being  citizens  of 
the  United  States  and  one-tliird  residents  of  the  State  of  New  York,  desiring  to 
form  a  stock  corporation,  pursuant  to  the  provisions  of  the  Business  Corporation 
Law  of  the  State  of  New  York,  do  hereby  make,  sign,  acknowledge,  aud  file  this 
certificate  for  that  purpose  as  follows: 

First.    The  name  of  the  proi)osed  corporation  is : 
Second.   The  purposes  for  which  this  corporation  is  formed  are: 
Third.   The  amount  of  tlie  capital  stock  is  _        dollars.     The  amount  of 

capital  with  which  the  Company  will  begin  business  is  dollars. 

Fourth.   The  number  of  shares  of  which  tlie  capital  stock  shall  consist  is_ 
shares  of  the  par  value  of  dollars  per  share.     (If  preferred  stock  is  to  be 

issued,  provision  therefor  should  be  made  at  this  point.) 

Fifth.    The  principal  office  of  the  corporation  is  to  be  located  in 
Sixth.   Tiie  duration  of  the  Company  will  be  uiuety-niue  (99)  years. 
Seventh.    The  number  of  its  directors  shall  be 

Eighth.  The  names  and  post-office  addresses  of  the  directors  for  the  first  year 
are : 

Names.  Post-Office  Addresses. 


Ninth.   The  names  and  post-office  addresses  of  the  subscribers  and  the  number 
of  shares  whicli  each  agrees  to  take  in  the  corporation  are  as  follows  : 

Names.  No.  of  Shares.  Addresses. 


4bS 


FOKMS   AND    PRECEDENTS. 

Tenth.    (Here  insert  provisions  for  the  regulation  of  internal  affairs  if  desired.) 

Ill  Testimony  Whereof,  the  subscribers  have  made,  signed,  acknowledged,  and 
f.led  this  certificate. 
Dated, 


State  of  7  ^^ 

County  of  3 

I  hereby  certify  that  on  this  day  of  ,  190  ,  before  me  person- 

ally came  ,  to  me  personally  known,  and  known  to  me  to  be  the 

persons  described  in  and  who  executed  the  foregoiug  instrument,  and  severally 
duly  acknowledged  to  me  that  they  executed  the  same. 

,  Notary  Public. 

(For  use  out  of  the  State.) 

State  of 
County  of 

I,  ,  Clerk  of  the  County  of  ,  and  also  Clerk  of  the 

Court  for  the  said  Comity,  the  same  being  a  Court  of  Record,  Do  Hereby  1 
Certify,  that  ,  whose  name  is  subscribed  to  the  Certificate  of  the  prool ' 

or  acknowledgment  of  the  annexed  iustrumeut,  and  tlicreou  written,  was,  at  the 
time  of  the  taking  of  such  proof  or  acknowledgment,  a  Notary  Pulilic  in  and  for 
tlie  County  of  ,  dwelling  in  the  said  county,  comuiibsioiied  and  sworn,  and  | 

duly  auliiorized  to  take  the  same.  And  further,  that  I  am  well  acquainted  with  the 
handwriting  of  such  Notary,  and  verily  believe  that  the  signature  to  the  said  certifi- 
cate of  proof  or  acknowledgment  is  genuine. 

In  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  affixed  the  seal  of  the 
said  Court  and  County,  the  day  of  ,  190  . 

,  Clerk. 


NORTH    CAROLINA. 
CERTIFICATE  OF  INCORPORATION 

OF   THE 

Company. 


This  is  to  certify  that  we  do  hereby  associate  ourselves  into  a 

corporation,  under  and  by  virtue  of  an  act  of  the  Legislature  of  the  State  of  North 
Carolina  (session  1901)  entitled  "  An  Act  to  Revise  the  Corporation  Laws  of  North 
Carolina,"  and  the  several  supplements  thereto  and  acts  amendatory  thereof,  and 
do  severally  agree  to  take  the  number  of  shares  of  capital  stock  set  opposite  our 
respective  names. 

Fird.    The  name  of  the  corporation  is  Company. 

Second.   The  location  of  the  principal  office  in  this  State  is  at  No. 
Street,  in  the  of  ,  County  of 

Third.    The  objects  for  which  this  corporation  is  formed  arc  to  : 

Fourth.   The  tolal  autliorized  ca|)ital  stock  of  this  cor|K)ration  is 
dollars,  divided  inU)  shares  of  \v,\x  value  of  dollars  each. 

Fifth.    The  names  and  post-office  addresses  of  the  incorjMirators  and  the  mim- 
ber  ot  shares  subscribed  for  by  each,  the  aggn-gnte  of  which,  S  .is  the 

amount  of  capital  st<jck  with  wiiich  this  company  will  commence  business,  are  as 
follows : 

Name.  Post-Office  Address.  No.  of  Shares. 

Sixth.   The  period  of  existence  of  this  corporatiou  is  limited  to  years. 

489 


INCORPORATION    AND    ORGANIZATION    OF    CORPORATIONS, 

SfiYfifA.    (llorc  insert  ;uiy  provisions  for  the  regulation  of  internal  alVairs  of  the 
corporation  tluit  may  be  desired.) 

In  JTiOicss  Jl'/icn'o/,  we  have  hereunto  set  our  hands  and  seals  the  day 

of  ,  190  . 

(seal.) 
(seal.) 

Signed,  sealed,  and  delivered  iu  the  presence  of 

State  of 
County  of 

This  is  to  certify  that  this  day  before  me,  a  ,  personally  appeared 

,  who  1  am  satistied  are  the  persons  named  in  and  who  executed  the  fore- 
going certificate  of  incorporation,  and  I  iiaving  first  made  known  to  them  the  con- 
tents thereof,  tliey  did  each  acknowledge  that  they  did  sign,  seal,  and  deliver  the 
same  as  their  voluntary  act  and  deed,  for  the  uses  and  purposes  therein  expressed. 

Ih  Testimony  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal, 
this  day  of  ,  A.  D.  190  . 


NORTH    DAKOTA. 
ARTICLES  OF  INCORPORATION 

OF   THE 

Company. 

Know  all  Men  by  these  Presents :  That  we,  the  undersigned,  have  this  day  volun- 
tarily associated  ourselves  together  for  tlie  purpose  of  forming  a  corporation  under 
the  laws  of  the  State  of  North  Dakota.     And  we  hereby  certify : 

First.    The  name  of  the  said  corporation  is  the 

Second.   The  purpose  for  which  it  is  formed  is  to  carry  on  the  business  of 
in  the  County  of  and  State  of  North  Dakota. 

Third.   That  the  place  where  its  principal  business  is  to  be  transacted  shall  be 

the  of  ,  County  of  ,  and  State  of  North  Dakota.     But  it 

may  have  a  business  office  witliout  this  State  at  the  City  of  ,  State  of 

,  and  any  meetings  of  incorporators,  stockholders,  or  directors  may  be 

held  at  either  of  said  offices. 

Fourth.     That  the  term  for  which  it  is  to  exist  is  years  from  and  after 

the  date  of  its  incor{)oration. 

Fifth.   That  the  number  of  its  directors  shall  be  ,  and  that  the  names 

and  residences  of  those  who  are  appointed  to  serve  until  their  successors  are  elected 
and  qualified  are: 

Names.  Residences. 


Sixth.   That  the  amount  of  the  capital  stock  of  this  corporation  shall  be 
dollars,  divided  into  shares  of  the  par  value  of  dollars  each. 

Seventh.  That  the  amount  of  said  capital  st(jek  which  has  been  actually  sub- 
scribed is  dollars,  and  the  following  are  the  names  of  tiie  persons  by  whom 
the  same  has  been  subscribed  and  number  of  shares  held  by  each : 

Names  of  Subscribers.  No.  of  Shares.  Amount. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  this 
day  of  ,  one  thousand  nine  hundred  and 

(Signatures  and  seals.) 
Signed  and  sealed  in  the  presence  of 

490 


FORMS   AND   PRECEDENTS. 

State  of  North  Dakota,    } 
County  of  ) 

On  this  day  of  ,  in  the  year  one  thousand  nine  hundred  and 

,  before  me,  a  Notary  Pubhc  in  and  for  said  county,  personally  aiipeared, 

known  to  me  to  be  the  persons  wlio  are  described  in,  and  who 

executed  the  within  instrument,  and  they  eacli  duly  acknowledged  to  me  that  they 

executed  tbe  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal 
the  day  and  year  last  above  written. 
(seal.) 

,  Notary  Public, 
Co. 

OHIO. 
ARTICLES  OF  COMPANY  FOR  PROFIT. 

These  articles  of  incorporation  of  the  Company  witnesseth  :  That 

we,  the  undersigned,  all  (or  a  majority)  of  whom  are  citizens  of  the  State  of  Ohio, 
desiring  to  form  a  corporation  for  profit,  under  the  general  corporation  laws  of  said 
State,  do  hereby  certify  : 

First-    The  iiainc  of  said  corporation  shall  be  : 

Second.    Said  corporation  is  to  be  located  at  in  County,  Ohio, 

and  its  principal  business  there  transacted. 

Third.    Said  corporation  is  formed  for  the  purpose  of : 

Fourth.   The  capital  stock  of  said  corporation  shall  be  dollars,  divided 

into  shares  of  dollars  each.     (If  preferred  stock  is  to  be  isoued, 

provision  therefor  should  be  inserted  at  this  point.) 

In  Witness  Whereof  we  have  hereunto  set  our  hands  this  day  of 

,  A.  D.  190  . 

(Signatures.) 

State  of  Ohio,    ) 
County  of  \ 

Personally  appeared  before  me  the  undersigned,  a  in  and  for  said 

county,  this  day  of  ,  A.  D.  190  ,  tiie  above  named  , 

and  each  severally  acknowledged  the  signing  of  the  foregoing  articles  of  incorpora- 
tion to  be  his  free  act  and  deed  for  tlie  uses  and  purposes  therein  nu-ntioued. 

Witness,  my  hand  and  official  seal  on  the  day  and  year  last  aforesaid. 
(seal.)  (Signatures  and  title.) 

State  of  Ohio,    >   ^^ 
County  of  \ 

I,  ,  Clerk  of  the  Court  of  Common  Picas  within  ami  for  tlic  comity 

aforesaid,  do  liereby  certify  that  ,  wJiosc  name  is  siiljscribcd  to  tiic  fore- 

going acknowh'dgment  as  a  ,  was  at  the  date  thereof  a  in  and  for 

said  county,  duly  commissioned  and  qualified,  and  authorized  as  such  to  take  said 
aeknowledgment  ;  and  furth(;r,  that  I  am  well  aequainlcd  witli  his  iiandwriting,  and 
Ijclieve  that  the  signature  to  said  acknowledgment  is  (,'eiiuine. 

In   Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  the  seal  of  said 
Court  at  this  day  of  ,  A.  1).  190     . 

(seal.) 


491 


INCORPORATION  AND  ORGANIZATION  OP  CORPORATIONS. 

OKLAHOMA. 
ARTICLES  OF  INCORPORATION. 

Be  It  Known,  That  the  uudersigiicd,  citizens  of  the  Territory  of  Oklahoma,  do 
hereby  vohmtarily  associate  ourselves  together  for  the  purpose  of  forming  a  pri- 
vate corporation,  under  the  laws  of  the  Territory  of  Oklahoma,  and  do  hereby 
certify : 

First. 

That  the  name  of  this  corporation  shall  be 

Second. 
That  the  purpose  for  which  this  corporation  is  (are)  formed  is  (are)  to  : 

Third. 
That  the  place(s)  where  its  principal  business  is  to  be  transacted  is  (are)  at : 

Fourth. 
That  the  term  for  which  this  corporation  is  to  exist  is  : 

Fifth. 

The  number  of  directors  or  trustees  of  this  corporation,  and  the  names  and 
residences  of  such  of  them  who  are  to  serve  until  the  election  of  such  officers  and 
their  qualification  : 

Names.  Post-Office  Addresses. 


Sixth. 

That  the  estimated  value  of  the  goods,  chattels,  lands,  rights,  and  credits  owned 
by  the  corporation  is  dollars. 

Tliat  the  amount  of  the  capital  stock  of  this  corporation  shall  be  dollars, 

and  shall  be  divided  into  shares  of  dollars  each. 

Ill  Testimony  Whereof,  we  have  hereunto  subscribed  our  names  this  day 

of  ,  A.  D.  190    . 

Territory  of  Oklahoma, 
County 

Personally  appeared  before  me,  a  Notary  Public  in  and  for  said  County,  Territory 
above  named,  ,  who  are  personally  known  to  me  to  be  the  same 

persons  who  executed  the  foregoing  instrument  of  writing,  and  duly  acknowledged 
the  execution  of  the  same. 

In  Testiraony  Whereof,  I  have  hereunto  subscribed  my  name,  and  affixed  my 
Notarial  Seal  this  day  of  ,  190  . 

,  Notary  Public. 


492 


FORMS   AND    PRECEDENTS. 

OREGON. 
ARTICLES  OF  INCORPORATION. 

We,  and  and  ,  whose  names  are  hereunto 

subscribed,  do  hereby  associate  ourselves  together  for  the  purpose  of  forming  a  cor- 
poration under  and  by  virtue  of  the  laws  of  tlie  State  of  Oregon  for  the  formation 
of  a  private  corporation. 

Article  I.    The  name  of  this  corporation  shall  be  ,  and  its  duration 

shall  be  perpetual. 

Article  II.  The  enterprise,  business,  pursuit,  or  occupation  in  which  this  cor- 
poration proposes  to  engage  is  : 

Article  III  The  principal  office  and  place  of  business  of  this  corporation  shall 
be  at : 

Article  IF.    The  capital  stock  of  this  corporation  sliall  be  dollars. 

Article  F.     The  capital  stock  of  this  corporation  shall  be  divided  into 
shares,  of  the  par  value  of  dollars  each. 

(If  the  corporation  is  formed  for  the  purpose  of  navigation  or  making  or  con- 
structing any  railroads,  roads,  canal  or  bridge,  the  termini  of  the  same  or  the  site  of 
such  bridge  must  be  set  forth.) 

In  JVit/iess  Whereof,  we,  the  undersigned,  have  hereunto  set  our  hands  and  seals 
this  day  of  ,  19  . 

In  the  presence  of 


State  of  Oregon, 
County  of 

Be  It  Remembered,  that  on  this  day  of  ,  190  ,  before  me,  the 

undersigned,  a  Notary  Public  in  and  for  said  County  and  State,  personally  appeared 

,  all  to  me  personally  known,  and  known  to  me  to  be  the  nidivi- 

duals  named  in,  and    who  executed  the  foregoing  articles   of  incorporation,  and 

severally  acknowledged  to  me  that  they  executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  notarial  seal  the  day 
and  year  last  above  written. 

,  Notary  Public  for  Oregon. 


PENNSYLVANIA. 

Notice  is  hereby  given  that  an  application  will  be  made  to  the  Governor  of  the 
State  of  Pennsylvania  on  ,  A.  D.  190     ,  by  under  the 

Act  of  Assembly  of  the  Commonwealth  of  Pennsylvania  entitled  "  An  Act  to  pro- 
vide for  the  Incorporation  and  Regulation  of  certain  Corporations,"  approved 
April  29th,  1S74,  and  tiie  supplements  thereto,  for  the  cliarter  of  an  intended 
corporation  to  be  called  ,  the  character  and  object  of  which  is  to 

and  for  those  purposes  to  have  and  possess  and  enjoy  all  the  rights,  beueCts,  and 
privileges  of  tlie  said  Act  of  Assembly  and  its  8up{)lcmcnts. 

,  Solicitors. 
(The  above  is  tlie  form  for  publication  of  notice  of  intention  to  apply  for  chorter.) 

493 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 


PENNSYLVANIA. 

To  THE  Governor  of  the  Commonwealth  of  Pennsylvania: 

Sir,  —  111  compliance  with  the  requirements  of  an  Act  of  the  General  Assem- 
bly of  the  Commonwealth  of  I'eunsylvania,  entitled  "  An  Act  to  provide  for  the 
incorporation  and  regulation  of  certain  corporations,"  ap])roved  the  29th  day  of  April, 
A.  D.  1S74,  and  the  several  supplements  tiiereto,  the  undersigned, 
of  whom  are  citizens  of  Pennsylvania,  liaving  associated  themselves  together  for 
the  purpose  hereinafter  specified,  and  desiring  that  they  may  be  incorporated,  and 
that  letters  patent  may  issue  to  them  and  their  successors  according  to  law,  do 
hereby  certify  : 

1.  The  name  of  the  proposed  corporation  is: 

2.  Said  corporation  is  formed  for  the  purpose  of: 

3.  The  business  of  said  corporation  is  to  be  transacted  in : 

4.  Said  corporation  is  to  exist  for  the  term  of  years. 

5.  The  names  and  residences  of  the  subscribers  and  the  number  of  shares 
subscribed  by  each  arc  as  follows : 

Names.  Residence.  No.  of  Shares. 

6.  The  number  of  directors  of  said  corporation  is  fixed  at  ,  and  the 
names  and  residences  of  the  directors  who  are  chosen  directors  for  the  first  year 
are  as  follows  : 

Name.  Residence. 

7.  Tiie  amount  of  the  capital  stock  of  said  corporation  is  dollars, 
divided  into  shares  of  the  par  value  of  dollars,  and  dollars, 
beinj^  ten  per  centum  of  the  capital  stock,  has  been  paid  in  cash  to  the  Treasurer 
of  said  corporation,  whose  name  and  residence  is  : 

(Signatures  of  Incorporators.) 

State  of  Pennsylvania,    ) 
County  of  l^^' 

Before  me  ,  in  and  for  the  county  aforesaid,  personally  came  the 

above  named  ,  who,  in  due  form  of  law,  acknowledged  the  fore- 

going instrument  to  be  their  act  and  deed  for  the  purposes  therein  specified. 

Witness  my  hand  and  seal  of  office,  the  day  of  ,  A.  D.  190  . 

(seal.) 

State  of  Pennsylvania,    ) 
County  of  y^' 

Personally  appeared   before   me,   this  day   of  ,   A.  D.   190  % 

who  being  duly  swoni,  according  to  law,  depose  and  say  that  the  statements 
contained  in  the  foregoing  instrument  are  true. 


Sworn  and  subscribed  before  me,  the  day  and  year  aforesaid. 


RHODE    ISLAND. 

ARTICLES  OF  ASSOCIATION. 

Know  all  Men  by  these  Presents  :  That  we,  all  of  lawful 

age,  hereby  agree  to  and  with  each  other : 

1.   To  associate  ourselves  together  for  the  purpose  of  constituting  a  corporation 
494 


FORMS    AND    PRECEDENTS, 

under  and  by  virtue  of  the  powers  conferred  by  Cliapter  176  of  the  General  Laws 
of  the  State  of  Rhode  Island. 

2.  Said  corporation  shall  be  known  by  the  name  of: 

3.  Said  corporation  is  constituted  for  tiie  purpose  of  engaging  in  business  of: 

4.  Said  corporation  shall  be  located  in  : 

5.  The  capital  stock  of  said  corporation  shall  be  common  stock  in  the  amount 
of  dollars,  to  be  divided  into  shares  of  the  par  value  of  dollars, 
and  preferred  stock  in  the  amount  of  thousand  dollars,  to  be  divided  into 
shares  of  the  par  value  of  dollars  each.  (The  advantages  of  the  preferred 
stock  over  the  common,  if  any,  must  be  set  forth.) 

In  Testimony  Whereof,  we  have  hereunto  set  our  hands  and  stated  our  resi- 
dences this  day  of  ,  A.  D.  190  . 

(Signatures  and  addresses.) 

State  of  Rhode  Island,  County  of  ,  ss. 

In  the  of  in  said  County  this  day  of 

A.  D.  190  ,  then  personally  appeared  before  me  ,  each  and  all 

known  to  me  and  known  by  me  to  be  the  parties  executing  the  foregoing  instrument, 
and  that  they  acknowledged  the  said  instrument  to  be  their  free  act  and  deed. 

,  Notary  Public. 


SOUTH  CAROLINA. 

DECLARATION  AND  PETITION  FOR  CHARTER. 

State  of  South  Carolina, 
County  of 

To  the  Secretary  of  State  of  South  Carolina  : 

The  undersigned  petitioners  (insert  names  and  residences),  by  this  their  declara- 
tion would  respectfully  show  : 

1st.   That  their  names  and  residences  are  as  above  given. 
2nd.   The  name  of  the  proposed  corporation  which  they  desire  to  form  is : 
3rd.    The  place  at  which  it  proposes  to  have  its  principal  place  of  business,  or 
to  be  located,  is: 

4th.    The  general  nature  of  the  business  which  it  proposes  to  do  is : 
5th.    The  amount  of  the  capital  stock  to  be  dollars  payable  : 

6th.   The  number  of  shares  into  which  the  capital  stock  is  to  be  divided  is 
of  the  par  value  of  dollars  eacli. 

7th.    (Any  other  matters  which  may  be  advisable  to  set  forth.) 
Wherefore  your  petitioners  pray  that  the  Secretary  of  State  do  issue  to  them 
a  commission  authorizing  them  to  open  books  f)f  subscrijition  to  the  capital  slock 
of  the  proposed  corporation,  after  days'  public  notice  in  the  ,  a 

newspaper  published  in  the  county  of 

Ana  your  petitioners  will  ever  pray,  etc. 

(Signatures.) 
Date. 

Return  of  Corporators.    (South  Carolina.) 

State  of  Soutli  Carolina,    > 
County  of  \  ^^' 

To  the  Secretary  of  State  of  South  Carolina: 

Whereas,  did  on  file  in  theofTirc  of  Secretary  of 

State  of  Soiitli  Carolina  a  written  declaration,  signed  by  themselves,  setting  forth  : 
1st.    The  names  and  residences  of  the  petitioner's  to  oc,  as  above  given, 
2ud.    The  name  of  the  proposed  corporation  to  be  with  principal 

495 


INCORPORATION   AND  ORGANIZATION    OP   CORPORATIONS. 

place  of  business  at  ,  and  the  nature  of  tlic  business  it  proposes 

to  do. 

3rd.   Tlic  amount  of  the  capital  stock  to  be  dollars  and  the  number 

of  shares  into  which  tlie  same  is  to  be  divided  to  be  ,  of  the  par  value 

of  dollars  each ;  and 

Whereas,  the  above  named  petitioners  were  appointed  by  you  a  Board  of  Corpo- 
rators, the  undersigned,  being  a  majority  thereof,  respectfully  certify  : 

1st.  That  all  the  requirements  of  an  Act  entitled  "  An  Act  to  provide  for  the 
formation  of  certain  corporations  and  to  detine  tlic  powers  thereof"  a{)proved  the 
9th  day  of  March,  A.  D.  1S90,  and  all  amendments  thereto,  have  been  duly  and 
fully  complied  with,  tifty  p(>r  cent  of  the  aggregate  amount  of  the  capital  stock 
having  been  subscribed  by  bona  Jiile  subscribers. 

2nd.    That,  pursuant  to  notice  jjublished  as  required,  a  meeting  was  held  on 
,  at  which  a  majority  of  all  stock  in  value,  being  present,  in  person  or 
bv  proxv,  the  following  were  elected  Directors : 

3rd.'  That  subsequently  there  was  elected  as  President,  ;  as  Vice- 

President,  ;  as  Secretary  and  Treasurer 

4th.  That  over  twenty  per  cent  of  the  aggregate  capital  stock  has  been  paid  to 
said  Treasurer. 

Wherefore,  your  petitioners  pray  that  a  charter  be  issued  in  the  name  and  for  the 
purposes  indicated  in  their  written  declaration. 

(Signatures.) 


SOUTH    DAKOTA. 
ARTICLES  OF  INCORPORATION 

OF 


Know  all  Men  by  these  Presents  :  That  we,  the  undersigned,  , 

for  ourselves,  our  associates  and  successors,  have  associated  ourselves  together  for 
the  purpose  of  forming  a  corporation  under  and  by  virtue  of  the  statutes  and  laws  of 
the  State  of  South  Dakota,  and  we  do  hereby  certify  and  declare  as  follows,  viz. 

First. 
The  name  of  the  corporation  shall  be 

Second. 
The  purposes  for  which  this  corporation  is  formed 

Third. 

The  place  where  the  principal  business  of  this  corporation  shall  be  transacted 
is  in  the  City  of  ,  South  Dakota ;  but  it  may  have  a  business  office  without 

this  State,  at  the  City  of  ,  State  of  ,  and  any  meetings  of  incorporators, 

stockholders,  or  directors  of  this  company  may  be  held  at  either  of  said  offices  or 
places  of  business  ;  and  the  books  of  this  corporation  may  be  kept  at  either  of  said 
offices  or  places  of  business  ;  and  any  incorporator  or  stockholder  of  said  company 
entitled  to  be  present  and  to  vote  at  said  meeting  may  be  represented  by  proxy. 

The  domiciliary  office  of  this  corporation  shall  be  at  the  office  of 
in  the  aforesaid  City  of  ,  South  Dakota. 

Fourth. 

The  term    for  which  this  corporation  shall  exist  shall  be  twenty  (20)  years, 
with  such  right  of  renewal  for  other  and  similar  periods  as  may  now  or  hereafter 
be  permitted  under  the  laws  of  South  Dakota. 
496 


FORMS   AND    PRECEDENTS. 

Fifth. 

The  number  of  Directors  of  this  corporation  shall  be  ,  aud  each 

Director  shall  hold  at  least  oue  share  of  stock.     The  names  and  residences  of  the 
Directors  who  are  to  serve  until  their  successors  are  elected  are  as  follows  : 

Names.  Residences. 


Sixth. 

The  amount  of  capital  stock  of  this  corporation  shall  be  and  is  dollars 

($  ),  divided  into  shares  of  the  par  value  of  dollars  each. 

In  Testimony  Whereof,  We  have  hereunto  set  our  hands  this      day  of  , 

190    . 

(Signatures.) 

State  of  > 

County  of  ;  ^^• 

Be  It  Remembered,  That  on  this  day  of  ,  A.  D.  190     ,  before 

the  undersigned,  personally  appeared  the  above  named 

well  and  personally  known  to  me  to  be  the  same  persons  described  in,  aud  who  exe- 
cuted tlie  foregoing  instrument,  and  severally  duly  acknowledged  to  me  that  they 
executed  the  same. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal  at 
said  county,  the  day  and  year  last  above  written. 

,  Notary  Public. 
State  of  >  , 

County  of  \  ^^• 

and  ,  being  duly  sworn,  each  for  himself  deposes  aud  says": 

That  he  is  one  oi  the  persons  described  in,  aud  who  signed  the  foregoing  Articles  of 
Incorporation  as  an  incorporator  therein  ;  that  he  has  read  the  said  articles  and 
knows  the  contents  tiiereof ;  that  the  incorporators  intended  in  good  faith  to  form  a 
corporation  for  the  nurpose  of  a  lawful  business  as  set  forth  in  said  articles,  and 
not  for  the  purpose  ot  enabling  anv  corporations  to  avoid  the  provisions  of  sections 
770  to  781  inclusive  of  the  Revised  Penal  Code  of  1903  of  the  State  of  South 
Dakota  relating  to  unlawful  trusts  aud  combinations,  and  laws  amendatory  tiiereto. 


Subscribed  and  sworn  to  before  me  this  day  of  ,  A.  D.  190 

,  Notary  Public. 


STATE    OF   TENNESSEE    (ORDINARY   FORM 
PRESCRIBED   BY    STATUTE). 

CHARTER  OF   INCORPORATION. 

Be  It  Known,  That  by  virtue  of  tlic  general  laws  of  the  land  (here  insert  names 
of  incorporators)  arc  hereby  constituU-d  a  l)ody  politic  and  corporate,  by  the  name 
and  style  of  for  the  juirpose  of 

The  capital  stock  of  said  cor|»onition  shall  be  dollars. 

The  general  powers  of  said  corporation  are  :  To  sue  and  be  sued  by  the  cor- 
porate name;  to  liave  and  use  a  eoinmon  seal,  whicli  it  may  niter  at  pleasure ;  if 
no  common  seal,  then  the  si(,'naturr  of  tlic  name  of  liie  cornoration  by  any  duly  au- 
thorized officer  shall  be  legal  and  binding;  to  purchase  and  hold  or  receive  by  gift, 
32  497 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

iu  addition  to  llic  pcrst)u;il  i)ropcrty  owned  by  said  corporation,  any  real  estate 
necessary  for  tlie  transaction  of  the  corporate  business,  and  also  to  ])urcliasc  or 
accept  nliv  real  estate  in  payment  (u-  i)art  payment  of  any  debt  due  to  the  corpora- 
tion, ami  sell  realtv  for  corporation  purposes  ;  to  establisli  by-laws  and  make  all  rules 
andreLTulations,  not  inconsistent  witli  the  laws  and  Constitution,  deemed  expedient 
for  the'^manaixemcnt  of  corporate  all'airs,  and  to  aj)poiut  such  subordinate  officers 
and  agents  in  addition  to  a  Tresident,  Secretary,  or  Treasurer,  as  the  business  of 
the  cm-poration  may  require,  designate  the  name  of  the  office,  and  fix  the  compensa- 
tion of  the  officer. 

The  following  provisions  and  restrictions  are  coupled  with  said  grant  of  powers  : 
A  failure  to  elect  officers  at  the  proper  time  does  not  dissolve  the  eorjjoration,  but 
those  in  otBce  hold  until  the  election  or  a})pointment  and  qualiiicatiou  of  their  suc- 
cessors. The  term  of  all  officers  may  be  lixed  by  the  by-laws  of  the  corporation ; 
the  same  not,  however,  to  exceed  two  years.  The  corporation  may,  by  by-laws, 
make  regulations  concerning  the  subscriptions  for,  or  transfer  of  stock ;  fix  upon 
the  amount  of  capital  to  be  invested  in  the  enterprise ;  the  division  of  the  same  into 
shares;  the  time  required  for  payment  thereof  by  the  subscribers  for  stock;  the 
amount  to  be  called  for  at  any  one  time,  and  in  case  of  failure  of  any  stockholder 
to  pay  the  amount  thus  subscribed  by  him  at  the  time  and  in  the  amounts  thus 
called,  a  right  of  action  shall  exist  in  the  corporation  to  sue  said  defaulting  stock- 
holder for  The  same.  The  Board  of  Directors  —  which  may  consist  of  five  or  more 
membei-s,  at  the  option  of  the  corporation,  to  be  elected  either  in  ])erson  or  by 
proxy,  by  a  majority  of  the  votes  cast,  each  share  representing  one  vote  —  shall 
keep' a  full  and"  true  record  of  all  their  proceedings,  and  an  annual  statement  of 
receipts  and  disbursements  shall  be  copied  on  the  minutes,  subject  at  all  times  to 
the  inspection  of  any  stockholder.  The  books  of  the  corporation  shall  show  the 
original  or  subsequent  stockholders,  their  respective  interests,  the  amount  which 
has°  been  paid  on  the  shares  subscribed,  the  transfer  of  stock,  by  and  to  whom 
made  ;  also  other  transactions  iu  which  it  is  jjresumed  a  stockholder  or  creditor 
mav  have  an  interest. 

'Tlie  amount  of  any  unpaid  stock  due  from  a  subscriber  to  the  corporation  shall 
be  a  fund  for  the  payment  of  any  debts  due  from  the  corporation,  nor  shall  the 
transfer  of  stock  by  any  subscriber  relieve  him  from  payment  unless  his  transferee 
has  paid  up  all  or  any  of  the  balance  due  on  said  original  subscription. 

By  no  implication  or  construction  shall  the  corporation  be  deemed  to  possess 
any  powers  except  those  hereby  expressly  given  or  necessarily  implied  from  the 
nature  of  the  business  for  whicl'i  the  charter  is  granted,  and  by  no  inference  wiiat- 
ever  shall  said  corporation  possess  the  power  to  discount  notes  or  bills,  deal  in  g(jld 
or  silver  coin,  issue  any  evidence  of  debts  as  currency,  or  engage  in  any  business 
outside  the  purpose  of  the  charter. 

Tiie  right  is  reserved  to  repeal,  annul,  or  modify  this  charter.  If  it  is  repealed, 
or  if  the  amendments  proposed,  being  not  merely  auxiliary  but  fundamental,  are  re- 
jected bv  a  vote  representing  more  than  half  of  the  stock,  the  corporation  shall 
continue' to  exist  for  the  purpose  of  winding  up  its  affairs,  but  not  to  enter  upon  any 
new  business.  If  the  amendments  or  modifications  being  fundamental  are  accepted 
by  the  corporation  as  aforesaid,  in  a  general  meeting  to  be  called  for  that  purpose, 
any  minor,  married  woman,  or  other  person  under  disability,  or  any  stockholder  not 
agreeing  to  the  acceptance  of  the  modification,  shall  cease  to  be  a  stockholder,  and 
the  corporation  shall  be  liable  to  pay  said  withdrawing  stockholders  the  par  value  of 
their  stock,  if  it  is  worth  so  much ;  if  not,  then  so  much  as  may  be  its  real  value  iu 
the  market  on  the  day  of  the  withdrawal  of  said  stockholders  as  aforesaid ;  Provided, 
That  the  claims  of  "all  creditors  are  to  be  paid  in  preference  to  said  withdrawing 
stockholders. 

A  majority  of  the  Board  of  Directors  shall  constitute  a  quorum  and  shall  fill  all 
vacancies  until  the  next  election.  The  first  Board  of  Directors  shall  consist  of  the 
five  or  more  corporators  who  sliall  aj)ply  for  and  obtain  the  charter. 

The  said  corporation  may  have  the  right  to  borrow  money  and  issue  notes  or 
bonds  upon  the  faith  of  the  corporate  property,  and  also  to  cxi  cute  a  mortgage  or 
mortgages  as  further  security  for  repayment  of  money  thus  borruwed. 
498 


FORMS   AND   PRECEDENTS. 

Said  corporation  shall  have  the  power  to  raise,  buy,  sell,  and  deal  in  agricultural 
products,  operate  flouring  and  other  inills,  and  deal  in  merchandise. 

Annually,  during  the  mouth  of  January,  tlie  President  siiall  make  and  jjublish 
in  a  newspaper  printed  in  the  couuty  where  the  principal  office  of  business  is  located, 
or  if  no  newspaper  is  printed  in  that  couuty,  then  in  an  adjoining,  or  the  nearest 
couuty  where  a  newspaper  is  printed,  a  sworn  statement,  showiug  tiie  amount  of  the 
capital  stock  and  existing  liabilities,  and  a  list  of  the  names  of  the  stockholders. 

Nothing  but  cash  shall  be  taken  iu  payment  of  any  part  of  the  capital  stock,  or 
land  at  a  fair  cash  valuation,  or  patents  to  the  amount  of  their  value,  as  agreed  on  by 
the  subscriber  and  the  corporation,  and  no  loan  of  mun  y  shall  at  any  time  be  made 
to  any  stockholder  thereof,  and  any  such  loan  shall  ri  nilur  the  Directors  consenting 
thereto  individually  liable  for  the  amount  thereof;  this  ability  to  extend  iu  favor  of 
innocent  stockholders  as  well  as  creditors. 

The  making  of  a  false  statement,  to  be  printed  as  aforesaid,  shall  render  all  per- 
sons assenting  thereto  individually  liable  to  all  persons  dealing  or  trading  with  said 
Company  upon  the  faith  of  said  fraudulent  statement. 

If  the  indebtedness  of  said  Com])any  shall  at  any  time  exceed  the  capital  stock 
paid  in,  the  Directors  assenting  thereto  sliall  be  individually  liable  to  the  creditors 
for  said  excess.  The  stockholders  are  jointly  and  severally  liable  individually  at  all 
times,  for  all  moneys  due  and  owing  to  the  laborers,  servants,  clerks,  and  operatives 
of  the  Company  in  case  the  corporation  becomes  insolvent. 

If  the  Directors  declare  and  pay  any  dividend  wiicn  the  Company  is  insolvent, 
on  which  declaration  of  a  dividend  would  diminish  the  amount  of  the  capital  stock, 
they  shall  be  jointly  and  severally  liable  to  creditors  for  the  amount  ot  dividends 
thus  declared.  Any  Director  may  avoid  liability  by  voting  against  the  dividend,  or 
by  filing  his  objections  in  writing  as  soon  as  he  ascertains  a  dividend  has  been  made. 

We,  the  undersigned,  apply  to  the  State  of  Tennessee,  by  virtue  of  the  laws  of 
the  laud,  for  a  Charter  of  Incorporation  for  the  purposes  and  with  the  powers,  etc., 
declared  in  the  foregoiug  instrument. 

Witness  our  hands,  this  day  of  ,  190  . 

TEXAS. 
CHARTER   OF  . 


State  of  Texas,    ) 
County  of  S 

Know  all  Men  by  thexe  Presents,  Tiiat  we,  and  ,  all  of  said 

County,  do  hereby  associate  ourselves  together  as  a  private  corporation 
under  and  by  virtue  of  the  laws  of  the  Stale  of  Texas,  aud  do  hereby  adopt  the 
following 

AllTK  LK.S    OF    IXCOUPORATION. 

1.  Tiic  name  of  said  corporation  shall  be: 

2.  The  object  and  purpose  for  wliich  said  corporation  is  fornicd  is  : 

'6.   The  principal  office  and  jdace  of  business  of  said  cor|)onitiou  shall  be  in  the 
City  of  ,  County,  Texas. 

4.    Said  corporation  shall  exist  for  the  period  of  years. 

5     The  number  of  its  directors  shall  be  ,  and  and 

all  of  said  County,  Texas,  shall  be  its  directors  for  the  first  year. 

6.   The  capital  stock  of  said  corporation  shall  be  dollars,  divided  into 

shares  of  dollars  each. 

In  JVitness  Whereof,  we  have  hereunto  signed  our  names  this  the  day 

of  ,  A.  D.  19     . 

499 


INCORPORATION   AND   ORGANIZATION   OP  CORPORATIONS. 

Stnte  of  Texas,  ) 
County  of  J 

Before  ,  a  notary  public  in  and  for  said  County,  on 

tiiis  day  personally  appeared  *       ,  and  ,  each  known 

to  uie  to  be  the  i)erson  whose  names  are  subscribed  to  the  foregoing  instrument,  and 
severally  acknowledged  to  me  that  they  executed  the  same  for  the  purposes  and 
consideration  therein  expressed. 

Given  under  my  hauci  and  seal  of  office  this  the  day  of  ,  A.  D.  19 

,  Notary  Public^ 

County,  Texas. 

State  of  Texas, ) 

County  of         ) 

I,  ,  of  County,  Texas,  upon  oath  do  hereby  state  that 

fifty  per  cent  of  the  authorized  capital  stock  of  said  ,  amounting  to 

dollars,  has  been  subscribed,  and  ten  per  cent  of  such  authorized  capital  stock, 
amounting  to  dollars,  has  been  paid  in. 

Sworn  to  and  subscribed  before  me  by  ,  this  the        day  of,     A.  D.  19  . 

,  Notary  Public, 

County,  Texas. 


UTAH. 
ARTICLES  OF  INCORPORATION 

OF 


This  Agreement  made  and  entered  into  by  and  between  ,  all  of 

,  State  of  Utah,  Witnesseth : 
That  the  parties  are  desirous  of  forming  a  corporation  under  the  laws  of  the 
State  of  Utah  for  the  purposes  and  on  the  terms  hereinafter  stated: 

Article  One. 

Said  corporation  shall  be  called  and  known  by  the  name  of  ,  and  is 

organized  at 

Article  Two. 

Said  corporation  shall  exist  and  continue  for  a  term  of  fifty  years  unless  sooner 
dissolved  or  disincorporated  according  to  law. 

Article  Three. 
The  object,  business,  and  pursuit  of  said  corporation  shall  be  to  : 

Article  Four. 

The  place  of  the  general  office  and  business  of  said  corporation  shall  be  at 
,  State  of  Utah. 

Article  Five. 

The  amount  of  the  capital  stock  of  said  corporation  shall  be  shares  of 

the  face  or  par  value  of  dollars  each. 

Article  Six. 

The  amount  of  tlie  capital  stock  subscribed  by  each  of  the  incorporators  above 
named,  parties  to  this  agreement,  is  as  follows,  that  is  to  say : 

500 


FORMS   AND   PRECEDENTS. 

Article  Seven. 
The  officers  of  said  corporatiou  shall  be : 

Article  Eight. 

To  be  eligible  to  an  office  in  this  corporation  the  person  must  be  the  owner,  as 
shown  by  the  books  of  the  corporation,  of  at  least  one  share  of  the  capital  stock 
thereof,  and  the  President  and  Treasurer  must  be  directors  of  said  corporation; 
the  Secretary  may  or  may  not  be  a  director  of  said  corporation,  and  if  a  director 
may  be  joined  with  the  office  of  Treasurer. 

Article  Nine. 

The  following  named  persons,  parties  hereto,  shall  be  directors  of  said  corpora- 
tion until  the  next  annual  meeting  of  the  stockholders  thereof,  as  hereinafter  pro- 
vided, namely:  .  And  the  said  shall  be  President,  said 
shall  be  Secretary  and  Treasurer,  and  until  their  successors  shall  be  duly 
elected  and  qualified.  Any  vacancy  caused  by  the  resignation,  death,  or  removal  o'f 
either  or  any  of  the  said  directors  or  officers,  may  be  filled  by  the  Board  of  Directors^ 

Article  Ten. 

The  term  of  office  of  the  officers  of  said  corporation  after  the  first  annual  meet- 
ing, shall  be  ,  and  until  their  successors  shall  be  duly  elected  and  shall 
have  duly  qualified. 

Article  Eleven. 

The  annual  stockholders'  meeting  of  said  corporation  for  the  election  of  officers 
and  for  the  transaction  of  any  such  other  business  as  shall  lawfully  come  before  it, 
shall  be  held  on  the  in  each  year,  at  ,  Utah,  and  representation 

of  a  majority  of  the  capital  stock  of  said  corporation  shall  be  necessary  to  legally 
hold  said  meeting,  and  all  stockholders'  meetings  of  said  cor|)oration  shaU  be 
either  general  or  special.  The  officers  of  said  corporation,  at  such  meetings,  shall 
be  elected  and  declared  to  be  elected  to  said  offices  respectively.  Each  stock- 
holder shall  be  entitled  to  as  many  votes  as  he  holds  of  said  capital  stock. 
Stock  representation,  by  proxy,  duly  appointed,  shall  be  allowed  at  all  meetings  of 
said  corporation,  cither  general  or  special.  No  jmblic  notice  shall  be  required  of 
the  holding  of  the  annual  stockiiokiers'  meetings.  Special  meetings  of  the  stock- 
holders may  be  called  by  the  President  or  by  any  directors,  and  notice 
thereof  shall  be  sufficieut  if  personally  served  on  each  stockholder,  or  by  letter  post- 
paid, addressed  to  him  at  his  place  of  residence. 

Article  Twelve. 
members  of  the  Board  of  Directors  shall  constitute  a  quorum  ta 


transact  business  of  the  corporation. 

Article  Thirteen. 

The  private  property  of  the  stockholders  of  the  corporatiou  shall  not  be  liable 
for  the  debts  of  the  corporation. 

Article  Fourteen. 

Any  director  or  officer  of  said  corporation  may  he  removed  nt  a  stockholders*^ 
meeting,  general  or  special,  by  vote  of  twothirds  of  the  cnpit^d  stock  of  this  cor- 
poration, and  any  officer  or  director  may  resign  l)y  filing  a  written  resignation  with 
the  Secretary  of  the  corporation. 

501 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

Article  Fifteen. 

The  capital  stock  of  said  corporation  subscribed  by  is  fully  j)aid  by 

the  couvcyauce  to  said  cor])oratiou  by  of  the  .     (For  all  cor- 

S orations  but  mining  and  irrigation  companies  there  must  be  inserted  here  a  full 
escription  of  tin-  property  conveyed  having  a  fair  cash  value  equal  to  the  par  value 
of  the  stock  for  which  it  is  transferred.) 

Article  Sixteen. 

It  shall  be  the  duty  of  the  Board  of  Directors  to  elect  a  manager  who  shall  have 
the  general  supervision  and  management  of  the  business  of  said  corporation. 

///  IVitne/is  Whereof,  said  parties  have  hereunto  set  their  hands  and  seals  the  day 
and  year  first  above  written. 

State  of  Utah, 
County  of 

,  being  each  severally  duly  sworn,  on  oath  do  depose  and 
say  that  they  have  commenced  to  carry  on,  and  it  is  their  bona  fide  intention  to 
carry  on,  the  business  mentioned  in  the  foregoing  agreement  and  Articles  of 
Incorporation,  and  affiants  verily  believe  that  each  party  to  said  agreement  has 
jiaid  and  is  able  to  and  will  pay  the  amount  of  stock  subscribed  for  by  him,  and 
that  ten  per  cent  of  the  capital  stock  and  ten  per  cent  of  the  stock  subscribed  by  each 
stockholder  has  been  paid  in. 


Subscribed  in  my  presence  and  sworn  to  before  me  this  day  of  , 

190  . 

(In  the  case  of  all  but  mining  and  irrigation  companies  the  following  affidavit 
must  be  made.) 

State  of  Utah,  |  ^^ 
County  of  \ 

,  ,  and  ,  being  each   severally  sworn,  on   oath 

deposes  and  says  that  he  has  examined  and  appraised  the  conveyed  by 

to  the  corporation  by'  these  articles  formed,  in  full  payment  of  their 
capital  stock,  and  they  do  each  hereby  on  their  oath  say  that  the  said  property  so 
conveyed  to  said  corporation  is  reasonably  worth  the  sum  of  dollars,  and 

that  said  sum  of  dollars  is  a  fair  cash  market  value  of  said  property. 

Subscribed  in  my  presence  and  sworn  to  before  me  this 

day  of  ,  190  . 

VERMONT. 

AETICLES  OF  ASSOCIATION 

OF   TUE 


We,  the  subscribers,  hereby  associate  ourselves  together  as  a  corporation  under 
the  laws  of  the  State  of  Vermont,  to  be  known  by  the  name  of  ,  for 

the  purpose  of  at  ,  in  the  County  of  ,  in  the 

State  of  Vermont,  with  a  capital  stock  of  dollars,  divided  into 

shares  of  dollars  each. 

Dated  at  ,  in  the  County  of  ,  this  day  of  ,  A.  D. 

190  . 

Subscribers.  Post-Office  Address. 


502 


FORMS   AND   PRECEDENTS. 

VIRG-INIA. 
CERTIFICATE  OF  INCORPORATION 

OF 

(Corporation  or  Incorporated). 


This  is  to  certify  that  we  do  hereby  associate  ourselves  to  establish  a  corpora- 
tion under  and  by  virtue  of  the  provisions  of  an  Act  of  tlie  General  Assembly  of 
the  State  of  Virginia,  entitled  "  An  Act  Concerning  Corporations,"  which  became 
a  law  on  the  21st  day  of  May,  1903,  for  the  purposes  and  under  the  corporate 
name  hereinafter  mentioned,  and  to  that  end  we  do  by  this  our  certificate  set  forth 
as  follows  : 

First.   The  name  of  the  company  shall  be  the  Corporation  (or 

incorporated). 

Second.  The  principal  office  of  the  company  within  the  State  shall  be  located 
at  .  ■ 

Third.   The  purposes  for  which  this  company  is  organized  are  : 

Fourth.    The  capital  stock  of  the  company  shall  not  be  less  than  dollars, 

nor  more  than  dollars  to  be  divided  into  shares  of  the  par  value 

of  dollars  each.     (If  preferred  stock  is  desired,  a  statement  of  the  amount 

thereof,  together  with  the  terms  on  which  it  is  created  must  be  set  forth.) 

Fifth.    The  existence  of  this  company  shall  be  perpetual. 

Sixth.  The  names  and  residences  of  the  officers  and  Directors  who  shall 
manage  the  affairs  of  the  company  for  the  first  year  are  as  follows  : 

Name.  Residence. 

,  Presidetit. 

,  Secretary. 

,  Treasurer. 

,  Director. 


Seventh.   The  amount  of  real  estate  to  be  held  by  the  company  shall  not  exceed 

acres  of  land  at  any  one  time. 
Eighth.   The  following  provisions  for  the  regulation  of  the  business  and  the 
conduct  of  the  affairs  of  the  comj)any  are  hereby  established : 

Li  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  this 
day  of  ,  190  . 

(L.S.) 


(L.S.^ 
(L.S.) 


State  of  , 

County  of  , 

I,  ,  a  Notary  Public  in  and  for  the  aforesaid  in 

the  State  of  ,  do  hereby  certify  that  ,  wlu).se  names  arc 

signed  to  the  writing  above;  bearing  date;  the  day  of  ,  and  have 

acknowledged  the  same  before  me  in  inv  county  and  State  aforesaid. 

Given  under  my  hand  this  ilay  of  ,    190  . 

,  Notary  Piiblir. 

Virginia. 

In  the  Circuit  Court  of  County. 

The  foregoing  certificate  for  incorporation  of  the  was  ]ircscntrd 

to  me,  ,  Judge  of  the  Court  of  ,  in  term 


i) 


03 


INCORPORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

time  (or  vacation)  ami  having  l)ocii  cxainiucd  by  mc  T  now  certify  tliat  the  said 
certiticate  for  iiicorooration  is,  in  my  opinion,  signed  and  acknowledged  in  accord- 
ance witli  an  Act  ol  the  General  Assembly  of  Virginia  entitled  "  An  Act  Coucerniug 
Corporations.'' 

Given  under  my  hand  this  day  of  ,  190  . 


WASHINGTON. 
ARTICLES  OF  INCORPORATION 

OF   THE 

Company. 


This  is  to  certify  that  we,  citizens  of  and  residents 

of  the  of  ,  in  the  County  of  and  State  of  , 

being  desirous  of  forming  a  corporation  pursuant  to  and  in  conformity  with  the 
laws  of  the  State  of  Washington,  do  hereby  make  and  subscribe  and  acknowledge 
in  triplicate  the  following  articles  of  incorporation: 

Article  First.   The  corporate  name  of  this  Company  shall  be : 

Article  Second.  The  object  for  which  the  said  corporation  is  formed  is  as 
follows  : 

Article  Third.   The  capital  stock  of  this  corporation  shall  be  dollars, 

which  shall  be  divided  into  shares  of  dollars  each. 

Article  Fourth.  The  time  of  existence  of  this  Company  shall  be  fifty  years, 
commencing  from  the  date  of  these  articles. 

Article  Fifth.  The  trustees  of  this  corporation  shall  be  (not  less  than  two)  in 
number,  and  the  names  and  residences  of  those  who  are  to  manage  the  concerns  of 
this  Company  for  the  first  months  (not  less  than  two  and  not  more  than 

six  months)  are  : 

Article  Sixth.  The  principal  place  of  business  of  this  corporation  shall  be  at  the 
City  of  in  the  County  of  and  State  of  Washington. 

I/i  Testimony  Whereof,  we  have  signed  these  articles  in  triplicate  at  said 
of  ,  on  the  day  of  ,  190  . 

(Signatures.) 

State  of  Washington,    7 
County  of  ) 

Be  It  Remembered,  That  on  this  day  of  ,  before  me,  the  under- 

signed, a  Notary  Public  in  and  for  the  State  of  Washington,  personally  appeared 
both  (or  all)  personally  known  to  me  and  known  by  me  to  be  the 
identical  persons  named  and  described  in,  and  who  executed,  made,  and  subscribed 
the  foregoing  articles  of  incorporation,  and  they  did  severally,  each  for  himself  and 
not  one  for  the  otiier,  acknowledge  to  me  that  they  made  and  subsci'ibed  the  fore- 
going articles  of  incorporation  freely  and  voluntarily  and  for  the  uses  and  purposes 
therein  mentioned. 

hi  Witness  Whereof,  I  have  hereunto  set  my  hand  and  affixed  my  official  seal 
the  day  and  year  in  this  certificate  first  above  written. 

(Signature.) 
Notary  Public  in  and  for  the  State  of  Washington, 

residing  at  iu  County,  Washington 

State  of  Washington,  ) 
County  of  >  "  ' 

being  duly  and  severally  sworn,  on  oath  severally  say,  each  for  himself, 
and  not  one  for  the  otiier,  that  he  is  one  of  the  trustees  whose  name  appears  in  tlie 
Articles  of  Incorporation  of  the  Comnany  ;  that  he  will  support  the 

Constitution  of  tiie  United  States  of  America,  ana  the  constitution  and  laws  of 

504 


FORMS   AND   PRECEDENia 

tlie  State  of  Washington,  and  that  he  will  faithfully  perform  the  duties  of  trustee 
of  said  Company  to  the  best  of  his  ability. 

(Signatures.) 
Subscribed  and  sworu  to  before  me  this  day  of  ,  190  . 

(Signature.) 
Notary  Public  iu  and  for  the  State  of  Washington, 

residing  at  in  County,  Washington. 

WEST    VIRGINIA. 
CERTIFICATE  OF  INCORPORATION. 

I.  We,  the  undersigned,  agree  to  become  a  corporation  by  the  name  of 

II.  Tiie  principal  place  of  business  of  said  corporation  shall  be  located  at  No. 
,  Street,  in  tiie  City  (2)  town,  village  of  in  the  county  of 

and  State  of  .     Its  ciiief  works  will  be  located  in  (.'}) 

(Insert  number  and  name  of  street  if  in  a  city  having  street  numbers;  if  not,  strike  out. 
2.  Erase  the  word  city,  town,  or  village  as  the  case  may  be.  .1.  Give  location  of  chief  works 
of,  at  same  place  as  principal  place  of  business:  say,  "  The  Chief  \Vorks  will  be  located  at 
the  same  place."  If  the  chief  works  are  not  in  West  Virginia,  it  is  only  necessary  to  state 
tlie  name  of  the  State  or  Territory  in  wliich  they  are  located  ;  if  the  cliief  works  and  prin- 
cipal place  of  business  are  both  in  West  Virginia,  then  it  is  necessary  to  state  the  magisterial 
District  and  County  in  which  the  chief  works  are  located,  thus,  "  in  the  District  of  , 

in  the  County  of  ,  in  the  State  of  West  Virginia,"  or,  if  the  nature  of  the  ease 

mav  require  it,  say  "in  the  district  of  and  County  of  ,  and  else- 

where in  the  State  of  West  Virginia."     If  there  be  no  chief  works,  say,  "Said  Corporation 
will  have  no  chief  works.") 

III.  The  objects  and  purposes  for  which  this  corporation  is  formed  arc  as 
follows  : 

IV.  The  amount  of  the  total  authorized  capital  stock  of  said  corporation  shall 
be  dollars,  which  shall  be  divided  into  shares  of  tlie  par 
value  of  dollars  each ;  of  which  authorized  capital  stock  the  amount 
of  dollars  has  been  subscribed,  and  the  amount  of  dollars  has 
been  paid. 

V.  The  names  and  post-oflBce  addresses  of  all  the  incorporators,  and  the  number 
of  shares  of  stock  subscribed  for  by  each  are  as  follows  : 

Post-Office  No.  of  Shares        No.  of  Shares        Total  No.  of 

Names.  (7)     Addresses.  (8)     Common  Stock.     Preferred  Stock.       Shares.  (9) 


VI.  This  con)oralion  is  to  expire  (1) 

VII.  (Here  insert  anv  special  provisions  desired  ;  and  also  number  of  acres  nf 
land  desired  to  hold  iu  \Vest  Virginia,  if  such  number  be  above  ten  tiiousaiid 
acres.) 

Given  under  our  bauds  this  day  of  ,190  . 

(.\ll  the  incorporators  must  sign  here.) 

State  of  }  gg 

County  of  ji 

I,  ,  a  Notary  Public  in  and  for  the  County  and  State  aforesaid, 

hereby  certify  that  ,  whose  names  are  subscribed  to  the  fore- 

going  acrreemeiit   bearing   date    the  day   of  ,  190  ,  tliis   day 

personally  appeared  before  me  in  my  said  county,  and  severally  nekiiowledged  llieir 
signatures  to  the  same. 

And  1  further  certify  that  and  ,  two  of  the  iiieorpora- 

tors  named  in  said  agreement,  made  oath  before  me  tliat  tlic  amount  therein  Mtated 
to  have  been  paid  on  the  capital  has  been  in  good  faith  paid  in.  for  the  purpose  niid 
business  of  the  intended  corporation,  without  any  int^-iilion  or  understanding  that 

50.") 


\ 


INCORPORATION   AND  ORl^ANIZATION  OF  CORPORATIONS. 

the  same  sh:\ll  he  witlulrnwii  tlierrfrom  before  the  expiration  or  dissohitiou  of  this 
Corporation. 

Given  uuih-r  my  liand  anil  ofllcial  seal  this  day  of  ,  190  . 

,  Notary  Vublic. 

(The  following  artidiivit  must  l)t>  made  by  at  least  two  of  the  incorporators  named  in 
tlie  aiireeiiuMit  wherein  it  is  stated  tiial  tlie  "  principal  place  of  business"  is  located  in  West 
Virciuia,  and  for  which  it  is  proposed  to  pay  the  rate  of  annual  license  tax  prescribed  for 
resident  corporations.) 

State  of 
County  of 

I,  a  Notary  Public  in  and  for  the  County  and  State  aforesaid* 

do  hereby  certify  that  and  ,  two  of  the  persons  who 

have  executed  the  foregoing   agreement,  bearing  date  of  the  day  of 

,  190  ,  this  day  personally  appeared  before  mc  in  my  said  county,  and 
made  oath  that  the  statement  in  said  agreement,  to  wit,  "tliat  the  principal  place 
of   business  of   said  c(n-poration  shall  be  located   at  in  the  County 

of  and    State  of  West   Virgiiua"  is  true,  and  that   said   princii)al 

place  of  business  and  chief  works  have  been  located  as  therein  stated  in  good 
faith,  and  not  for  tlie  purpose  of  evading  any  law  of  the  State  of  West  Virginia,  and 
especiallv  not  for  the  purpose  of  avoiding  the  payment  of  the  difrcrcnce  between  the 
amount  of  the  annual  license  tax  on  "the  cliarters  of  corporations  having  their 
principal  place  of  business  within  the  State  of  West  Virginia,  and  tliose  corpora- 
tions having  their  principal  place  of  business  or  cliief  works  witliout  said  State  ;  and 
that  said  corporation  named  in  said  agreement  ])roposes  in  good  faith  to  caiTy  on  its 
business  and  to  have  its  principal  place  of  business  and  its  chief  works  (if  it  have 
such)  within  the  State  of  West  Virginia. 

Given  under  my  hand  and  official  seal  this  day  of  ,  190  . 

,  Notary  Public. 

(seal.) 

"WISCONSIN. 

Know  all  Men  by  these  Presents  :  That  the  undersigned,  adult  residents  of 
the  State  of  Wisconsin,  do  hereby  make,  sign,  and  agree  to  the  following 

ARTICLES  OF  ORGANIZATION. 

Article  I.  The  undersigned  have  associated,  and  do  liereby  associate  themselves 
together  for  the  purpose  of  forming  a  corporation  under  Chapter  86  of  the  Wiscon- 
sin Statutes  of  1898,  and  the  acts  amendatory  thereof  and  supplementary  tliereto, 
the  business  and  purposes  of  wliich  corporation  shall  be  ,  which  said 

business  is  to  be  carried  on  within  tlie  State  of  ,  and  especially  within 

the  County  of  in  said  State. 

Article  II.   The  name  of  said  corporation  shall  be  ,  and  its  location 

shall  be  in  the  ,  Wisconsin. 

Article  III.   The  capital  stock  of  said  corporation  shall  be  ,  and  the 

same  shall  consist  of  shares,  each  of  which  said  shares  shall  be  of  the 

face  or  par  value  of  dollars. 

Article  IV.  The  general  officers  of  said  corporation  shall  be  a  President,  Vice- 
President,  Secretary,  and  Treasurer,  and  the  Board  of  Directors  shall 
consist  of  stockliolders.  (Provision  may  be  here  made  for  dividing  the 
directors  into  three  classes  if  desired.) 

Article  V.  The  principal  duties  of  the  President  sliall  be  to  preside  at  all  meet- 
ings of  the  Board  of  Directors,  and  to  have  a  general  supervision  of  the. 
affairs  of  the  corporation.  ,„,.•,.,  ,,      i  ^-       1 1.\. 

The  principal  duties  of  the  Vice-President  shall  be  to  discharge  the  duties  of  the 
President  in  the  event  of  the  absence  or  disability,  for  any  cause  whatever,  of  the 

latter. 

The  principal  duties  of  the  Secretary  shall  be  to  countersign  all  deeds,  leases, 

506 


FORMS   AND   PRECEDENTS. 

and  conveyances  executed  by  the  corporation,  affix  the  seal  of  the  corporation 
thereto,  and  to  sucli  other  papers  as  shall  be  required  or  directed  to  be  sealed,  and 
to  keep  a  record  of  the  proceedings  of  the  Board  of  Directors,  and  to  safely  and 
systematically  keep  all  books,  papers,  records,  and  documents  belonging  to  the 
corporation,  or  in  any  wise  pertaining  to  the  business  (hereof. 

The  principal  duties  of  the  Treasurer  shall  be  to  keep  and  account  for  all  mon- 
eys, credits,  and  property,  of  any  and  every  nature,  of  the  corporation,  which  shall 
come  in  his  hands,  and  keep  an  accurate  account  of  all  moneys  received  and  dis- 
bursed, and  proper  vouchers  for  moneys  disbursed,  and  to  render  such  accounts, 
statements,  and  inventories  of  moneys  received  and  disbursed,  and  of  money  and 
property  on  hand,  and  generally  of  all  matters  pertaining  to  this  office,  as  shall  be 
required  by  tlie  Board  of  Directors. 

The  Board  of  Directors  may  provide  for  the  appointment  of  such  additional 
officers  as  they  may  deem  for  the  best  interests  of  the  corporation. 

Whenever  the  Board  of  Directors  may  so  order,  the  offices  of  Secretary  and 
Treasurer  mav  be  held  by  the  same  person. 

The  said  officers  shall  perform  such  additional  or  different  duties  as  shall  from 
time  to  time  be  imposed  or  required  by  the  Board  of  Directors,  or  as  may  be  pre- 
scribed from  time  to  time  by  the  By-Laws. 

Article  VI.  Only  persons  holding  stock  according  to  the  regulations  of  the 
corporation  shall  be  members  of  it. 

Article  VII.  These  articles  may  be  amended  by  resolution  setting  forth  such 
amendment  or  amendments,  adopted  at  any  meeting  of  the  stockholders  by  a  vote 
of  at  least  two-thirds  of  all  the  stock  of  said  corporation  then  outstanding. 

Article  VIII.   The  existence  of  this  corporation  shall  be  years  (or 

perpetual).  .  ,    „.  . 

Article  IX.  (Any  other  provisions  for  the  regulation  of  the  internal  aftairs  of  the 
corporation  not  inconsistent  with  law  may  be  iuserted.) 

In  IVitness   Whereof,  we  have  hcreuuto  set  our  hands,  this  day  of 

,  A.  D.  190  .  

Signed  in  presence  of 


State  of  Wisconsin,     7  ^^ 
County  of  i 

Personally  came  before  me  this  day  of  ,  A.  D.  190  ,  the 

above  named  ,  to  me  known  to  be  the  persons  who  executed  the 

foregoing  instrument,  and  acknowledged  the  same. 

°  ,  Notary  Public,  Wisconsin. 

State  of  Wisconsin,    ) 
County  of  S     * 

and  .being  each  dulv  sworn,  doth  each  for  himself  de- 

pose and  say  that  he  is  one  of  the  original  signers  of  the  above  declaration  and  art- 
icles ;  that  the  above  and  foregoing  is  a  true,  correct,  and  comi)lcte  copy  of  such 
original  declaration  and  articles,  and  of  the  whole  thereof.  Subscribed  and  sworn 
to  before  mc,  this  day  of  ,  A.  D.  190  . 


,  Notary  Public. 


WYOMING. 
CERTIFICATE  OF  INCORPORATION 

OP   THE 

Company. 


Know  atx  Mfv  nr  Titesf.  Prf.srnts:  That  wc.  the  undersigned,  ntir.rns  of 
the  United  States,  over  the  age  of  twcnty-one  years,  desiring  to  nid  in  the  in.lus- 

r.o: 


INCOUrOUATION    AND    ORGANIZATION   OP   CORPORATIONS. 

trial  (or  proiliiolivc)  interests  of  the  country,  do  by  these  presents  voluntarily  asso- 
ciate oiirsclvi'.s  toi^eiher  Tor  the  purpose  of  forming  a  corporation,  under  the  laws  of 
the  State  of  Wvoiiuiig. 

And  we  iierehy  certify  : 

First.     Tiiat  the  corporate  name  of  our  said  corporation  is  and   shall  be  the 
Company. 

Second.  That  I  lie  object  for  which  our  said  corporation  or  Company  is  formed 
is  (here  state  object,  conilning  same  to  one  general  line  or  department). 

Third.    The  capital  stock  of  our  said  Company  shall  be  dollars,  to  be 

divided  into  shares  of  the  ])ar  value  of  dollars  each  and  non- 

assessable. (If  preferred  stock  is  to  be  issued,  provision  therefor  must  be  inserted 
at  this  point.) 

Fourth.  The  term  of  existeuce  of  our  said  Company  shall  be  (not  exceeding  fifty 
years),  from  and  after  the  date  of  this  certificate. 

Fifth.  The  atl'airs  and  management  of  our  said  Company  shall  be  under  the 
control  of  trustees   (not  less  than  three,  nor  more  than  nine),  and 

arc  hereby  selected  and  appointed  to  act  as  such  trustees,  and  to  man- 
age the  affairs  and  concerns  of  our  said  Company  for  the  first  year  of  its  existence, 
and  until  their  successors  are  elected  and  qualified  according  to  law  and  the  by-laws 
of  our  said  Company. 

Sixth.  The  name  of  the  town  in  which  the  operations  of  our  said  Company 
shall  be  carried  on  is  the  City  of  ,  County  of  ,  and  State  of 

.  (If  the  Company  is  formed  for  the  purpose  of  carrying  on  any  part 
of  its  business  in  any  place  outside  of  the  State,  add  :  "  and  the  «aid  business  is  also 
formed  for  the  purpose  of  carrying  on  part  of  its  business  outside  of  the  State  of 
Wyoming,  to  wit,  in  the  City  of  ,  County  of  ,  and  State  of  , 

and  elsewhere  in  the  United  States  as  the  trustees  of  our  said  Company  may  by  res- 
olution or  otherwise  direct  "  ),  but  the  name  of  the  town  and  county  in  which  the 
principal  part  of  the  business  within  the  State  of  Wyoming  is  to  be  transacted  is 
the  City  of  ,  in  the  said  County  of  ,  at  which  place  its  principal 

oflBce  and  place  of  business  shall  be  located. 

Seventh.  All  suits  against  our  said  Company  shall  be  commenced  in  the  said 
County  of 

1)1  Witness  Whereof,  we  have  executed  this  certificate  in  duplicate  this 
day  of  ,  A.  D.'  19     . 

If  the  adoption  of  by-laws  is  to  be  delegated  to  the  trustees,  the  following  clause 
should  be  inserted  :  The  trustees  of  our  said  Company  shall  have  the  exclusive  power 
to  make  such  prudential  by-laws  as  they  may  deem  proper  for  the  management  and 
disposition  of  the  stock,  and  business  atfairs  of  our  said  Company,  not  inconsistent 
with  the  laws  of  the  State,  prescribing  the  duties  of  oflttcers,  artificers  and  servants 
that  may  be  employed,  for  the  appointment  of  all  officers,  and  for  carrying  on  all 
kinds  of  business  within  the  objects  and  purposes  of  our  said  Company. 

(l.  s.) 
(l.  s.) 
(L.  s.) 
Witnesses : 

State  of  Wyoming,  ) 
County  of  "  f  ^^• 

I,  ,  a  Notary  Public  in  and  for  the  said  County  and  State,  do 

hereby  certify  that  ,  who  are  personally  known  to  me  to  be  the  same 

persons  whose  names  are  subscribed  to  the  foregoing  instrument,  appeared  before 
me  this  day  in  person,  and  each  separately  acknowledged  that  he  signed,  sealed,  and 
delivered  the  said  instrument  as  his  free  and  voluntary  act,  for  the  uses  and 
purposes  therein  set  forth. 

My  commission  expires 

Given  under  my  hand  and  notarial  seal  this  day  of  ,  A.  D.  190  . 

,  Notary  Public. 

508 


FORMS   AND    PRECEDENTS. 


GENERAL   OBJECT   CLAUSES. 


GENERAL  TRADING  CLAUSE. 

To  manufacture,  export,  import,  buy,  sell,  and  generally  deal  in  goods,  wares, 
merchandise,  aud  property  of  every  class  and  description. 

GENERAL  PURCHASING  CLAUSE. 

To  purchase,  lease,  or  otherwise  acquire  all  kinds  of  personal  property  which  the 
corporation  may  deem  necessary  or  convenient  for  the  purposes  of  its  business. 

REAL  ESTATE  CLAUSE. 

To  purchase,  lease,  or  otherwise  acquire  real  estate,  improved  or  unimproved, 
without  limit  as  to  amount,  in  any  State  or  Territory  of  the  United  States  or  foreign 
country. 

PATENT  AND  TRADE  MARK  CLAUSE. 

To  apply  for,  acquire,  buy,  sell,  assign,  lease,  pledge,  mortgage,  or  otherwise  dis- 
pose of  letters  patent  of  the  United  States  or  of  any  foreign  country,  and  all  or  any 
rights,  territorial  or  otherwise,  tliercunder.  To  apply  for,  acquire,  liohi,  sell,  assign, 
lease,  mortgage,  or  otherwise  dispose  of  patent  rights,  licenses,  privileges,  inven- 
tions, trade  marks,  trade  names,  and  pending  ajjplications  therefor,  relating  to  or 
useful  in  connection  with  any  business  of  the  corporation.  To  use,  manufacture, 
or  grant  licenses  under  any  letters  patent  owned  or  controlled  by  tlie  company, 
and  to  expend  money  in  experimenting  upon  and  testiug  the  validity  or  value  of  any 
patent  rights  the  company  may  acquire  or  proposes  to  acquire. 

ACQUIRING  AN  ESTABLISHED  BUSINESS. 

To  acquire  by  purchase  or  otherwise  property,  real  or  pcrson.'il,  and  the  pood 
will,  rights,  and  assets  of  all  kinds  under  sucli  terms  and  conditions  as  may  be 
deemed  advisable,  of  any  person,  firm,  or  corporation,  and  to  pay  for  the  same 
in  cash,  stock,  —  common  or  preferred,  —  bonds,  or  other  securities  of  the 
corporation. 

HOLDING  STOCK  IN  OTHER  CORPORATIONS. 

To  subscribe  for,  purchase,  or  otherwise  acquire,  and  hold  witli  tlie  same  rights 
of  ownership  therein  as  may  be  |)ermittc(l  to  natural  persons,  the  shares,  bonds, 
and  obligations  of  any  corj)oratioii  orgjinized  under  the  laws  of  any  State,  Territory, 
district,  or  colony  of  the  United  States  or  of  any  foreign  country- 

CONDUCTING  BUSINESS   IN  OTHER  STATES. 

To  conduct  it^  business  in  all  its  branches,  and  lo  have  one  or  more  business 
oflSces,  and  without  restriction  to  contract,  buy,  sell.  lease,  morlgngr-,  and  convey 
such  real  and  personal  properly  in  any  of  tin;  Slates,  Territories,  dislriels,  or  colonial 
possessions  of  the  United  Slates  anil  any  foreign  countries  as  shall  from  time  to 
lime  be  found  necessary  and  convenient  for  the  |)ur|)osrs  of  the  company's 
business. 

ACQUISITION  OF  COMPANY'S  OWN  STOCK. 

The  corporation  may  donate  any  or  all  of  its  surjilus  earnings  or  aeeuninlated 
profits  to  the  purchase  or  aeqnisitjon  of  its  own  ea|iilal  st-ock  from  time  to  lime  as 
its  board  of  directors  shall  detcrniinc,  aud  such  capital  stock  so  purchased  may,  if 

509 


INCOUrORATlON    AND   ORGANIZATION    OF   CORPORATIONS. 

the  directors  sn  (letormiuo,  be  deposited  in  the  treasury  of  the  company  as  trc;isiiry 
stock,  to  be  tliereafter  disposed  of  as  sueli  treasury  stock  for  the  i)urposc  of  procur- 
iui;  working  capital  for  the  company. 

BOND   CLAUSE. 

To  issue  bonds  to  any  amount  authorized  by  law  for  the  purpose  of  securing 
funds  for  corporate  purposes,  and  to  secure  tiie  payment  of  the  same  by  mortgajije 
or  deed  of  trust  upon  tlie  whole  or  any  part  of  the  real  and  personal  property  of  the 
company  at  any  time  held  by  it. 

AUTHORIZING  THE  ISSUANCE  OF  PROMOTION  STOCK. 

To  remunerate  any  person,  firm,  or  corporation  for  services  rendered  or  io  be 
rendered  in  selling,  j^lcdging,  or  guaranteeing  the  disposal  of  any  of  the  shares  of 
tlie  capital  stock  of  the  comjiany,  or  of  any  bonds  or  other  securities  of  the  company 
that  may  from  time  to  time  be  issued. 

POWER  TO  DISPOSE  OF  ALL  CORPORATE  PROPERTY. 

The  board  of  directors  shall  liave  the  power  and  authority  to  sell,  assign,  mort- 
gage, convey,  or  otherwise  dispose  of  all  the  property  and  assets  of  the  corporation 
on%uch  terms  and  conditions  as  they  shall  prescribe  whether  for  cash  or  property  or 
stock  and  bonds  in  other  corporations. 

CLAUSES   REGULATING  BUSINESS. 


CLASSIFICATION  OF  DIRECTORS. 

The  directors  shall  be  divided  as  equally  as  possible  into  classes,  to  be  known 
as  directors  of  tlie  first,  second,  third  classes,  etc.  The  terms  of  office  of  director  of 
the  first  class  shall  expire  on  the  first  Monday  of  ,  190  ,  and  the  second  class 

on  the  first  Moiulay  of  ,  190  ,  etc. 

FORM  FOR  CLASSIFICATION   OF  DIRECTORS. 

The  members  of  the  board  of  directors  shall  be  classified  with  respect  to  their 
length  of  term  of  office,  by  dividing  them  into         classes,  each  consisting  of 
of  the  whole  number  of  the  board  of  directors. 

The  directors  of  the  first  class  shall  be  elected  for  a  term  of  one  year,  and  the 
directors  of  the  second  class  for  a  term  of  two  years,  and  the  directors  of  the  third 
class  for  a  term  of  three  years,  etc. 

At  each  annual  election  the  successors  of  the  class  of  directors  whose  terms  shall 
expire  in  that  year,  shall  be  elected  to  hold  office  for  a  term  of  years,  so  that 

the  term  of  office  of  one  class  shall  expire  each  year. 

POWER  TO  ADOPT  AND  ALTER  BY-LAWS. 

The  board  of  directors  shall  have  power  without  any  action  on  the  part  of  the 
stockholders  to  make,  alter,  amend,  or  repeal  by-laws  for  the  corporation. 

AUTHORITY  TO  ISSUE  BONDS. 

The  directors  and  ofiieers  of  the  company  are  authorized  to  make  and  issue 
mortgage  bonds  at  such  times  and  in  such  amounts  as  to  them  shall  be  deemed 

advisable.  .„ 

EXECUTIVE  COMMITTEE. 

The  board  of  directors  may,  by  means  of  a  resolution  adopted  by  a  majority  of  the 
whole  board  at  a  meeting  duly  called  for  that  purpose,  designate  directors 

510 


FORMS   AND   PRECEDENTS. 

to  constitute  an  executive  committee,  wliicli  committee  shall  have  and  exercise  all 
the  powers  and  riglits  of  tlie  full  board  of  directors  in  the  management  of  the 
business  and  affairs  of  tlic  corporatiou. 

REMOVAL  OF  OFFICERS    AND  DIRECTORS. 
Any  ofBcer  or  director,  whether  elected  by  the  stockholders,  or  named  in  the 
certificate  of  incorporation,  or  elected  or  appointed  by  the  board  of  directors,  may 
be  removed  at  any  time,  by  affirmative  vote  of  a  majority  of  the  stockholders  of  the 
corporation. 

LIEN  ON  STOCK  FOR  INDEBTEDNESS   OF  THE  COMPANY. 

The  corporation  shall  at  all  times  have  a  first  lien  on  all  the  shares  of  its 
stockholders  and  on  dividends  declared  thereon  for  any  and  all  indebtedness  of 
such  stockholders  of  the  corporation. 

EXAMINATION  OF  BOOKS  BY  STOCKHOLDERS. 

Except  where  otherwise  ])rovided  by  law,  the  hoard  of  directors  shall  have  the 
power  to  determine  under  what  conditions  and  regulations,  and  at  what  times 
and  places,  the  accounts  and  books  of  the  corporation  shall  be  opened  to  the  iu- 
spectiou  of  stockholders. 

CUMULATIVE  VOTING. 

The  by-laws  shall  provide  that  at  all  elections  of  directors  each  stockliolder 
shall  be  entitled  to  cast  as  many  votes  as  sliall  equal  the  number  of  shares  of  stock 
held  by  him,  multiplied  by  tlie  number  of  directors  to  be  elected,  and  they  shall 
further  provide  that  such  stockholder  siiall  have  the  right  if  In-  so  desires  to  cast  all 
of  such  votes  for  a  single  director  or  distril)ute  them  among  the  number  to  be  voted 
for  or  any  two  of  them  as  he  may  see  fit. 

HOLDING  STOCKHOLDERS'   MEETINGS  WITHOUT  THE 
DOMICILIARY   STATE. 

To  maintain  an  office  without  the  Slate  of  (here  name  the  domiciliary  Statr),  at 
the  city  of  ,  State  of  ,  and  any  meetings  of  incorporators,  directors, 

or  stockholders  of  this  company  may  be  held  at  cither  of  said  offices  or  places  of 
business,  and  the  books  of  tiiis  corporation  may  be  kept  at  cither  of  said  olliccs  or 
places  f)f  business,  and  any  incorporator  or  stockholder  entitled  to  be  present  and 
to  vote  at  any  organization  or  stockholders'  meetings  may  be  represented  and  vote 
at  such  meeting  by  proxy  in  writing. 


PREFERRED  STOCK  CLAUSES. 


PREFERRED  STOCK  CLAUSES  (Short  Form). 
The  capital  stock  of  the  company  shall  consist  (jf  shares  of  common 

stock  of  tiic  par  value  of  8  per  sliarc,  and  shares  of  preferred  slock 

of  llie  par  value  of  f  per  sliare.     TIk;  rights  of  holders  of  ])rcfrrred  slock 

shall  be  set  forth,  and  determined  by  tlie  by-laws  to  be  adopted  by  the  corporation 
at  its  organization  meeting.  Such  parts  of  said  by-laws  as  relate  to  the  rights 
of  preferred  stockholders  shall  not  tln-rcaftcr  he  altrr(;(i,  amended,  or  rescinded 
without  the  consent  of  all  of  said  preferred  stockholders. 

PREFERRED  STOCK  CLAUSES   (Long  Form). 

The  holders  of  preferred  stock  shall  l)c  entitled  to  cumulative  (or  non-oumiiln- 
tive)  dividends  thereon  at  the  rate  of,  but  not  to  exceed  per  cent  for  each 

511 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

Mid  every  fiscal  year  of  the  coinjiauy  payable  out  of  any  aiul  all  surplus  or  net,  prof- 
its amuially  (senu-aunually  or  quarlerly),  and  when  declared  by  the  board  of 
directors,  lu  tiie  event  of  dissolution  or  liquidation  of  the  corporation  the  iiolders 
of  the  preferred  stock,  shall  be  entitled  to  receive  the  par  valvie  of  their  preferred 
shares  out  of  the  assets  of  the  corporation  before  anything  shall  be  paid  thereon  to 
the  holders  of  the  common  stock.  The  holders  of  preferred  stock  shall  (not)  be 
entitled  to  (any)  all  voting  powers  in  the  corporation.  The  preferred  stock  sliall 
be  subject  to  redemption  at  the  option  of  the  corporation  at  any  time  after  the 
day  of  ,  190  ,  at  t  he  price  of  f  for  each  share,  and  the  amount 

of  dividends  cumulated  and  unpaid  thereon  at  the  date  of  redemption. 

The  holders  of  preferred  stock  sliall  have  the  right  at  any  time  to  convert  the  same 
into  common  stock  of  the  corporation  by  presenting  the  same  to  the  treasurer  of 
the  corporation  for  cancellation,  and  shall  then  be  entitled  to  receive  forthwith  an 
amount  of  common  stock  equal  to  tlie  par  value  of  the  preferred  stock  so  tendered 
for  puruoses  of  conversion  into  common  stock. 

PREFERRED  STOCK  CLAUSE  (Long  Form). 

From  time  to  time  the  preferred  stock  and  the  common  stock  may  be  increased 
according  to  law,  and  may  be  issued  in  such  amounts  and  proportions  as  sliall  be 
determined  by  the  Board  of  Directors,  and  as  may  be  permitted  by  law. 

The  holders  of  the  preferred  stock  shall  be  entitled  to  receive  when  and  as  de- 
clared, from  the  surplus  or  net  profits  of  the  corporation,  yearly  dividends  at 
the  rate  of  per  centum   per  annum,  and   no  more,  payable   quarterly  on 

dates  to  be  fixed  by  the  By-Laws.  The  dividends  on  the  preferred  stock  shall  be 
cumulative,  and  shall  be  payable  before  any  dividends  on  the  common  stock  shall 
be  paid  or  set  apart ;  so  that,  if  in  any  year  dividends  amounting  to  per 

centum  shall  not  have  been  paid  thereon,  the  deficiency  shall  be  payable  before  any 
dividends  shall  be  paid  upon  or  set  apart  for  the  common  stock. 

Whenever  all  cumulative  dividends  upon  the  preferred  stock  for  all  previous 
years  shall  have  been  declared  and  shall  have  become  payable,  and  the  accrued 
quarterly  instalments  for  the  current  year  shall  have  been  declared,  and  the  Com- 
pany sliall  have  paid  such  cumulative  dividends  for  previous  years  and  such  accrued 
quarterly  instalments,  or  shall  have  set  aside  from  its  surplus  or  net  profits  a  sum 
sufficient  for  the  payment  thereof,  the  Board  of  Directors  may  declare  dividends  on 
the  commou  stock,  payable  then  or  thereafter,  out  of  any  remaining  surplus  or  net 
profits. 

In  the  event  of  any  liquidation,  or  dissolution,  or  winding  up  (whether  voluntary 
or  involuntary)  of  the  corporation,  the  holders  of  the  preferred  stock  shall  be  entitled 
to  be  paid  in  full,  both  the  par  amount  of  their  shares  and  the  unpaid  dividends  ac- 
crued thereon,  before  any  amount  shall  be  paid  to  the  holders  of  the  common  stock  : 
and  after  the  paymc^nt  to  the  holders  of  the  preferred  stock  of  its  par  value,  and  the 
unpaid  accrued  dividends  thereon,  the  remaining  assets  and  funds  shall  be  divided 
and  paid  to  the  holders  of  the  common  stock  pro  rata  according  to  their  respective 
shares. 

COMPOSITE   FORM   OF    MINUTES 

'       For  New  York,  New  Jersey,  South  Dakota,  Arizona,  Nevada,  West 
Virginia,  Delaware,  District  of  Columbia,  and  other  States. 

(In  District  of  Columbia  in  all  cases  use  "  Trustee  "  for  "  Director,"  and  "  District "  for 
"State.") 

Minutes  of  Incorporators'  Meeting. 
— Company. 

1.   The  first  meeting  of  the  corporation  was  held  on  the  day  of 

190     ,  at  o'clock  in  the  noon,  at  the  (principal  or  business) 

office  of  the  company,  in  the  City  of  ,  State  of       ^  y  pursuant  to 

a  written  waiver  of  notice,  signed  by  all  the  incorporators  fixing  said  time  and  place. 

512 


FORMS   AND    PRECEDENTS. 
2.   The  following  incorporators  were  present  in  person 


The  following  incorporators  were  represented  by  proxy ; 


3.  On  motion  duly  made  and  seconded,  Mr.  -was  elected  Chair- 
man, and  Mr.                            was  appointed  Secretary  of  the  meeting. 

4.  Tlie  Chairman  reported  that  the  certificate  of  incorporation  of  the  company 
had  been  filed  in  the  ofiice  of  the  Secretary  of  State  of  on  the 

day  of  190     .     The  SecreUiry  presented  a  copy  of  said  certificate  of  incor- 

poration, and  on  motion  duly  made  and  seconded,  a  copy  thereof  was  ordered 
spread  upon  the  minutes : 

(Insert  copy  of  certificate  of  incorporation.) 
(In  the  following  States  Section  4  is  omitted  and  sections  referred  to  inserted 
in  its  place :  Delaware,  A ;  Arizona,  A ;  New  Jersey,  A.) 

5.  The  Secretary  presented  and  read  the  waiver  of  notice  of  the  meeting, 
which  was  ordered  spread  upon  tlie  minutes : 

(Insert  waiver  of  notice.) 

6.  The  proxy  (or  proxies)  above  mentioned  was  (or  were)  presented  and 
ordered  filed. 

(Form  of  proxy  same  in  all  States.     See  Appendix.) 

7.  Messrs.  and  were  appointed  inspectors  of  election, 
and  the  oath  was  duly  administered  to  them. 

(All  States  except  New  York,  South  Dakota,  and  District  of  Columbia.  In  the 
two  latter  provision  as  to  inspectors  omitted.) 

8.  The  Secretary  presented  a  form  of  by-laws  for  the  regulation  of  the  affairs 
of  the  company,  which  were  read  article  by  article  and  unanimously  adopted,  and  a 
copy  thereof  ordered  spread  upon  the  minutes  : 

(Insert  by-laws.) 

9.  The  Secretary  presented  the  following  transfers  of  subscription,  to  take 
effect  when  accepted  by  the  company. 

Transferror.  Transferee.  No.  of  Shares. 


(Form  of  transfer  .same  for  all  States.     See  Api)endix.) 
(Not  necessary  in  States  whore  incorporators  need  not  lu-  sul)scribcrs  to  stock; 

for  example,  South  Dakota,  Arizona,  and  District  of  Columbia.) 

On  motion  duly  made  and  seconded,  said  transfers  were  accci^ted  in  behalf  of 

the  company. 

10.  (New  York,  South  Dakota,  and  District  of  Columbia.)  On  motion  duly 
made  and  seconded,  it  was 

Rpxolved,  that  the  Board  of  Directors  as  named  in  the  Articles  of  Incoriwratioii, 
be  and  they  hereby  are  elected  members  of  tiie  Hoard  of  Directors  for  the  ensuing 
year  and  until  their  successors  are  elected  and  f|nalify: 

(For  Delaware  see  Delaware  H;  for  Arizona  see  Arizona  \\\  for  New  Jersey, 
West  Virginia,  and  Nevaihi  see  Now  Jersey   H.) 

11.  On  motion  duly  made   and   secoiuh'd,  it  was 

Renolvnd,  that  in  com|)liance  with  the  laws  of  and  the  cerlifi- 

cate  of  incorporation  of  the   company,  the   i)rinei|)nl  (or  registered)  ofliec  of  the 
company  in  be  estabiishr-d  and  mainlniiied  at  tlie  ofliee  of  the 

Company  (antl   that  a  sign   with   the  company's    name   thereon  be  ronspieuoiisly 
displayed  at  the  cntranrc  of  .said  ofliee,  Note  A.)  and  be  it  further 
(Note  A.     Insert  where  required  by  statute.) 
(The  following  inserted  for  New  Jersey,  Delaware,  Ariz.mri,  and  West  Virginia.) 
Re.ioloed,  that  be  and  be  hereby  is  ajjpoinled  the  agent  of  this 

33  5 1:3 


INCOIIPORATTON    AND   ORnANTZATION    OF    CORPORATIONS. 

compaiiv  ill  cliavtjo  of  said  officp  and  upon  wlioiu  jiroccss  against  this  company 
mav  1)0  served  ;  and  be  it  further 

' K^nolred,  tluit  tlic  President  and  Secretary  be  and  they  hereby  arc  author- 
ized to  siun  and  seal  with  the  company's  seal  a  certificate  of  authorization  to  said 
Incorporating  Company  in  the  form  presented  at  this  meeting. 

12.  Upon  motion  duly  made  and  seconded,  and  by  the  affirmative  vote  of  all 
present,  it  was  ,     •     i        , 

Beao/ved,  that  the  Board  of  Directors  be  and  they  hereby  are  authorized  and 
directeil  to  issue  shares  of  the  capital  stock  of  tliis  company  to  the  full  amount 
aulluM-izcd  by  tlie  certificate  of  incorporation,  in  such  amounts  from  time  to  time  as 
may  be  determined  by  the  Board  and  as  may  be  permitted  by  law,  and  in  their 
discretion  to  accept  in' full  or  part  payment  of  any  sliare  or  shares  such  pro|)erty  as 
the    Board  may  determine  shall  be  "^neeessary    for  the  business  of  the  company. 

13.  (The  following  clause  is  inserted  -where  stock  is  made  full  paid  by  issuance 
of  stock  for  property  or  oateut  rights.     Tliis  form  is  applicable  to  all  States.) 

Upon  motion  duly  made  and  seconded,  and  by  the  athrmative  vote  of  all  pres- 
ent, the  following  preambles  and  resolution  were  unanimously  adopted : 

IFhereas,  has  oflered  to  assign  to   this  company   the  following 

described  property  (if  property,  give  description  sufheient  to  identify  the  sarne ;  if 
patent  riijlits,  give  number  of'  patent,  date  of  issue  and  name  and  description  of 
article  piaented),  all  in  consideration  of  the  issuance  of  stock  of  this  company  to 
the  amount  of  dollars;   and 

Whereas,  it  appears  to  the  stockholders  that  such  property  (patent  rights,  etc.) 
is  necessary  for  tiie  business  of  the  company,  and  that  the  same  is  of  the  value 
of  '        dollars;     Now,  therefore,  be  it 

Resolved,  that  the  Board  of  Directors  be  and  they  hereby  are  authorized  in 
their  discretion,  to  purchase  the  property  (patent  rights,  etc.),  abolfse.  mentioned, 
for  the  said  price  and  to  issue  said  stock  in  payment  thereof. 

14f.  Upon  motion  duly  made  and  seconded,  and  by  the  affirmative  vote  of  all 
present,  the  following  preambles  and  resolution  were  adopted : 

Whereas,  it  has  been  agreed  between  eacii  of  the  incorporators  and 
(name  of  transferror),  tiiat  the  stock  to  be  issued   in  payment  of  the   property 
authorized  to  be  purchased  by  the  resolution  set  forth  above  shall  include  the  stock 
subscribed  by  the  incorporators :  Now,  therefore,  be  it  •     j      j 

Resolved,  tliat  the  Board  of  Directors  be  and  tiiey  hereby  are  authorized  and 
directed  to  accept  said  property  (patent  rights,  etc.  )as  full  payment  of  the  subscrip- 
tion for  stock  of  tlie  incorporators,  and  to  issue  full-jjuid  stock  to  the  incorpora- 
tors or  their  assigns  to  the  amount  of  their  respective  subscriptions. 

(This  section  is  omitted  where  the  incorporators  are  not  subscribers  to  the 
stock. ) 

No  further  business  was  presented,  and  on  motion  the  meeting  adjourned. 

,  Secretary. 

Approved : 

,  Chairman. 

(Delaware  A.)  The  Chairman  reported  that  the  certificate  of  incorporation  of 
the  company  was  filed   on  the  day  of  190  .at 

o'clock  in  the  noon  in  the  office  of  the  Secretary  of  State,  and  a  certi- 

fied copy  thereof  recorded  in  the  office  of  the  Recorder  of  Deeds  for  the  County 
of  New* Castle,  on  the  day  of  190  ,  in  Certificate  of  Incorpo- 

ration Records,  vol.  page  ,  etc.,  and  presented  a  copy  of  said  certificate 

of  incorporation,  which  was,  on  motion  duly  made  and  seconded,  ordered  spread 
upon  tlie  minutes  : 

(Delaware  B.)     On  motifm  duly  made  and  seconded,  it  was 
Resolved,  that  the  incorporators  proceed  to  the  election  of  Directors.     The  polls 
were  thereupon  opened,  and  remained  open  until  all  the  incorporators  liad  voted. 
The  polls  thereupon  being  closed,  tlie  vote  was  canvassed,  and  the  Chairman  re- 

514 


FORMS    AND   PRFXEDENTS.  / 

ported  that  the  following  named  persons  were  unanimously  elected   Directors 
votes  representing  shares  having  been  cast  for  each  of  said 

persons,  to  wit : 

Name.  Number  of  Votes. 

The  Secretary  reported  that  all  the  newly  elected  Directors  were  subscribers  to 
at  least  three  shares  of  stock  of  the  company  and  therefore  eligible  to  nomination 
and  election  as  Directors. 

(Arizona  A.)  The  Chairman  reported  that  the  certificate  of  incorporation  of 
the  company  was  filed  in  the  office  of  the  County  Recorder  of  Maricoi)a  County, 
Territory  of  Arizona,  on  the  day  of        190     ,  and  a  certified  copy  thereof 

filed  in  tlie  office  of  the  Territorial  Auditor  on  the  day  of  190     , 

and  presented  a  copy  of  said  certificate  of  incorporation.  On  motion  duly  made 
and  seconded,  a  copy  thereof  was  ordered  spread  upon  the  minutes : 

(.\rizona  B.)     Messrs.  were  nominated  for  directors   of  the 

company  to  hold  office  for  the  ensuing  year.  No  other  nominations  having  been 
had,  the  polls  were  duly  opened,  and  ballot  having  been  duly  had,  and  all  the  stock- 
holders having  voted,  the  polls  were  declared  closed,  and  the  Chairman  announced 
that  the   foregoing  gentlemen  had  been  duly  elected  Directors  of  the  com])any. 

(New  Jersey  A.)  The  Chairman  reported  that  the  certificate  of  incorporation 
of  tlie  company  was  recorded  in  tlic  office  of  the  Clerk  of  County,  oa 

the  day  of  190     ,  and  was  filed  on  the  day  of  , 

190  ,  in  the  office  of  the  Secretary  of  State,  and  presented  a  copy  of  said  certificate 
of  incorporation,  which  was,  on  motion  duly  made  and  seconded,  ordered  filed,  and 
a  copy  thereof  ordered  spread  upon  the  minutes  : 

(New  Jersey  B.)     Messrs.  were  nominated  for  Directors  of  the 

company,  to  hold  office  for  tlie  ensuing  year.  No  other  nominations  having  been 
made,  the  polls  were  duly  opened,  and  ballot  having  been  duly  had,  and  all  the 
stockholders  having  voted,  the  polls  were  declared  closed,  and  the  inspectors  pre- 
sented their  certificate  showing  that  the  aforesaid  gentlemen  had  been  duly  elected 
Directors  of  the  company. 


APPENDIX. 
Waiveb  of  Notice  of  Meeting  of  Incorporators. 

We,  the  undersigned,  incorporators  of  the  Company,  a  corporation 

under  the  laws  of  the  State  of  ,  hereby  waive  notice  of  tlie  time,  place, 

and  purpose  of  the  first  meeting  of  the  corporation,  and  fix  the  day  of  , 

190     ,  at  o'clock  in  the  noon,  as  the  time,  and  the  office  of  the 

company  in  the  City  of  as  the  place  of  said  meeting. 

And  we  do  hereby  waive  all  rer|uircments  of  the  statutes  of  as  to- 

Tiotice  of  tills  meeting  and  publication  thereof;  and  consent  to  the  transaction  of 
such  business  as  may  come  before  said  meetings. 

Dated  190     . 

I'lioxT.     Mketi.ng  of  Incorporators. 

The  undersigned  (Note  A  —  a  subscriber  to  shares  of  stork  of  the 

capital  stock  of  Company)  hereby  appoints  as  proxy 

with  full  power  of  substitution  and  rcvoration  to  vot^-  for  mid  on  behalf  of  the 
undersigned  at  the  first  meeting  of  the  corporation  to  be  held  ,  190  , 

and  at  any  adjoiiniinf-Ht  tiiereof. 

Note  A.  (Where  the  statute  does  not  require  company  to  bcdn  business  with  a 
fixed  amount,  Part  A  ran  be  omitted.  Therefore  omit  in  South  Dakota,  Arizona, 
and  District  of  Columbia.) 

Widipnif  my  hand  and  seal  this  day  of  ,  190     . 

In  presence  of 

615 


INCOUPOUATION    AND   ORGANIZATION   OF   CORPORATIONS. 

Transfeu  of  Subscription. 

Tlic  undersigned,  for  good  and  valuable  considerations  received,  has  sold,  as- 
signed, transferred,  audi  set  over,  and  by  these  presents  does  sell,  assign,  transfer, 
ami  set  over  unto  the  right,  title,  and  interest  of  the  undersigned  as  a 

subscriber  to  and  an  incorporator  of  the  Company,  to  the  extent  of 

shares  of  the  capital  stock  thereof,  and  hereby  requests  and  directs  the  said  com- 
pany to  issue  the  certificate  for  said  share  to  the  aforesaid  transferee  or  his  nominee 
or  assigns. 

This  transfer  to  take  effect  upon  the  acceptance  thereof  by  the  company,  the 
undersigned  meanwhile  retaining  the  right  to  vote  upon  said  shares. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  this  day 

of  ,  190    . 

Witness : 

Inspectors'  Oath  and  Certificate. 

State  of  >  gg_ 

County  of  > 

and  being  severally  sworn,  upon  their  respective  oaths 

do  promise  and  swear  that  they  will  'faithfully,  honestly,  and  impartially  perform  the 
duties  of  inspectors  of  election,  to  be  held  this  day  for  Directors  of  the 
Company,  and  a  true  report  made  of  the  same. 
Subscribed  and  sworn  to  before 
me  this  day  of  ,  190     . 

Notary  Public. 
The  undersigned,  inspectors  of  election,  report  that  having  taken  an  oath  im- 
partially  to  conduct  the  election  of  directors  of  the  above-named  company,  we  did 
reeeive'the  votes  of  the  stockholders  by  ballot,  and  that  the  following  persons 
received  the  number  of  votes  set  opposite  their  respective  names,  to  wit : 
For  Directors.  Number  of  Votes. 

Dated  >  Inspectors. 

MINUTES  OF  THE  FIRST  MEETING  OF  DIRECTORS. 

1.  The  first  meeting  of  the  board  of  directors  of  Company  M'as  held  at 
the  office  of  the  company  in  the  City  of                 ,  State  of  ,  on  the 

day  of  ,  190  ,  at  o'clock  in  the  noon. 

2.  Present :  Messrs.  constituting  a  majority  of  the  board 
of  directors. 

3.  Mr.  was  chosen  temporary  chairman,  and  Mr.  was 
appointed  temporary  secretary  of  the  meeting. 

4.  The  secretary  presented  and  read  a  waiver  of  notice  of  the  meeting,  signed 
by  all  the  directors,  and  same  was  ordered  spread  upon  the  minutes : 

(For  form  of  waiver,  see  Appendix.     Same  in  all  States.) 

5.  (Insert  following  clause  for  New  York  only :) 

Messrs.  and  were  appointed  inspectors  of  election  for  the 

ensuing  year. 

6.  The  minutes  of  the  first  meeting  of  incorporators  were  read. 

7.  The  following  gentlemen  were  unanimously  elected  officers  of  the  company 
to  serve  for  one  year  and  until  their  successors  are  elected  and  qualify  : 

President, 
Vice-President, 
Second  Vice-President, 
Third  Vice-President, 
Secretary, 
Treasurer, 

Counsd  ^^^^°^""'  }  (if  desired). 
516  ' 


FORMS   AND    PRECEDENTS. 

8.  (Insert  for  New  Jersey,  Nevada,  and  Delaware.) 

It  was  ordered  that  the  secretary  take  the  oaih  of  olfice  and  subscribe  the  writ- 
ten oath  in  the  form  presented  at  this  meeting.     The  secretary  thereupon  took  and 
subscribed  the  oath,  and  entered  upon  the  discharge  of  his  duties. 
(For  form  of  oath,  see  Appendix.) 

9.  It  was  ordered  that  the  treasurer  give  a  bond  in  the  sum  of  dollars  iu 
the  form  presented  at  this  meeting,  to  be  approved  by  the  board,  and  submitted 
to  them  for  their  approval  as  to  the  sufficiency  of  the  surety.  The  treasurer  there- 
upon presented  his  bond,  signed  by  himself  as  principal  and  as  surety,  and 
same  was  approved  and  ordered  filed. 

(By-laws  generally  make  the  giving  of  a  bond  at  discretion  of  board.) 

10.  (Where  director  resigns,  use  the  following  form  for  acceptance  of  resigna- 
tion and  election  of  his  successor :) 

Tiie  secretary  presented  tiie  resignation  of  as  director  of  the  company, 

and  on  motion  duly  uuide  and  seconded,  same  was  accepted  and  ordered  filed. 

Mr.  was  thereupon  duly  elected  a  director  of  the  company  to  fill  the 

vacancy  caused  by  the  resignation  of  Mr. 

(For  form  of  resignation,  see  Appendix.     Same  in  all  States.) 

11.  Uj)on  motion  duly  made  and  seconded,  it  was 

Resolved,  that  the  seal  j)resented  at  this  meeting,  an  impression  of  which  is 
^o  i\  directed  to  be  made  in  the  margin  of  the  minute-book,  be  and  the  same 
^        '  hereby  is  adopted  as  the  seal  of  tiie  corporation. 

12.  Upon  motion  duly  made  and  seconded,  it  was 

Resolved,  that  the  president  and  be  and  they  hereby  are  authorized 

to  issue  certificates  of  stock  in  the  form  submitted  to  tliis  meeting: 

(President  and  secretary  must  sign  in  Soutli  Dakota;  in  New  York,  Arizona, 
Nevada,  West  Virginia,  and  District  of  Columi)ia,  president  and  secretary  or  treas- 
urer ;  iu  Delaware  and  New  Jersey,  president  and  treasurer.) 

13.  Upon  motioji  duly  made  and  seconded,  it  was 

Resolved,  tlmt  the  treasurer  be  and  he  hereby  is  autliorized  to  open  a  hank 
account  in  behalf  of  this  company  with  the  bank  of  ;  and  be 

it  furtiier 

Resolved,  that  until  otherwise  ordered,  said  bank  be  and  it  hereby  is  authorized 
to  make  payments  from  the  funds  of  this  company  on  de|)0sit  with  it  upon  and  ac- 
cording to  tiie  check  of  tiiis  company  signed  by  its  treasurer  (and  couutersigucd  by 
the  president  if  so  provided  iu  the  by-laws). 

14.  Messrs.  were  appointed  meml)ers  of  the  executive  com- 
mittee, with  all  the  powers  given  in  the  by-laws  of  this  company. 

15.  Upon  motion  duly  made  and  seconded,  it  was 

Resolved,  tiiat  an  office  of  the  company  l)e  established  and  maintained  at  the 
City  of  ,  State  of  ,  and  that  meetings  of  the  board  of  directors 

from  time  to  time  may  Ije  held  either  at  tlu;  (princii)al  or  registered)  offirr  in  tiie 
State  of  ,  or  such  other  office  in  the  City  of  or  elsewhere  as  the 

board  of  directors  shall  from  time  to  time  order. 

16.  (Where  stock  is  issued  for  properly,  patent  rights,  etc.,  iusert  the  following 
clause :) 

Upon  motion  duly  made  and  seconded,  it  was 

Resohed,  that  this  company  arccipt  tlie  olfcr  of  to  sell  lo  thi.s  company 

the  property  (patent  rights,  etc.),  deseril)i'd  in  the  ngrecment  jjrescntcd  at  this 
meeting,  and  the  board  of  directors  do  hereby  adjudge  and  declare  that  said  \m^\^^ 
erty  is  of  the  fair  value  of  dollars,  aiid  that  the  same  is  necessary  for  the 

business  of  the  company;  and  be  it  further 

Resolved,  lliat  the  agreement  ff)r  the  sale  of  said  property  (or  as.signment  of 
patent  rights,  etc  ),  presented  at  this  mecling.  be  and  tlie  same  liercby  is  approved, 
and  the  president  and  secretary  are  hereby  authorized  and  directed  to  exernle  said 
agreement  in  the  name  and  on  the  behalf  of  this  company,  and  lo  affix  I  he  corporate 
seal  thereto;  and  be  it  fnrtlier 

Resolved,  that  the  president  and  be  and  they  hereby  are  authorized 

517 


INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 

and  directed  to  issue  certificates  of  full-paid  canital  stock  of  this  company  to  the 
agtiroijate  auunmt  of  dollars,  as  jirovidcd  in  said  agrecnieut. 

17.    Upon  motion  duly  made  and  seconded,  it  was 

BesolveJ,  that  payment  of  the  subscrij)ti()ns  for  stock  of  the  incorporators  be 
deemed  to  be  made  by  the  property  ac^reecl  to  be  sold  to  tlie  company  as  set  forth 
in  the  preceding  resolution,  it  having  been  agreed  between  and  the  in- 

corporators that  the  stock  to  be  issued  to  said  and  his  nominees  under 

said  agreement  should  include  the  stock  subscribed  by  the  iiieorjiorators. 

ThiT  secretary  presented  the  resignation  of  as  director  of  the  company 

to  take  eflect 

Mr.  was  nominated  to  fill  the  vacancy  caused  by  the  resignation 

of  Mr.  ,  and  upon  motion  duly  made  and  seconded  he  was  unanimously 

elected  a  director. 

(This  clause  inserted  where  temporary  or  dummy  directors  resign  at  the  first 
meeting. 

No  further  business  was  presented,  and  on  motiou  the  meeting  adjourned. 

,  Secretary. 
Approved : 

,  Chairman. 


APPENDIX. 
Waiver  op  Notice.    First  Meeting  of  Board  op  Directors. 

We,  the  undersigned,  Directors  of  the  Company,  a  corporation  under 

the  laws  of  ,  hereby  waive  notice  of  the  time  and  place  of  the  first  meet- 

ing of  the  Board  of  Directors,  and  of  the  business  to  be  transacted  at  said  meeting. 
We  designate  the  day  of  ,  190  ,  at  o'clock  in  the  noon 

as  the  time,  and  the  office  of  the  company  in  the  City  of  as  the  place  of 

said  meeting.  The  purpose  of  said  meeting  being  the  election  of  officers,  the  au- 
thorization of  the  issue  of  stock  of  the  company,  the  authorization  of  the  |)urchase 
of  property  necessary  for  the  business  of  the  company,  and  the  transaction  of  such 
other  Dusmess  as  the  Board  may  deem  proper. 

Dated 


Secretary's  Oath. 


State  of 
County  of 


ss. 


,  Secretary  of  the  Company,  being  by  me  duly  sworn, 

upon  his  oath  does  promise  and  swear  that  he  will  faithfully  discharge  the  duties  of 
secretary  of  the  aforesaid  company  to  the  best  of  his  skill  and  ability. 

,  Secretary 

Subscribed  and  swoni  to  before  me  this  day  of  ,  190  . 

Notary  Public. 

Directors'  Resignation. 

I  hereby  tender  my  resignation  as  Director  of  the  Company,  to  take 

effect  when  accepted  by  said  company. 


518 


FORMS   AND   PRECEDENTS. 


COMPOSITE  FORM  OF  BY-LAWS 

For  New  York,  New  Jersey,  South  Dakota,  Delaware,  Arizona,  West 
Virginia,  Nevada,  District  of  Columbia,  etc. 

(In  the  District  of  Columbia  in  all  cases  use  "  Trustee  "  for  "  Director  "  and  "  District  " 

for  "State.") 

Article  I.     Offices. 

Sec.  1.    The  registered  (or  priucipal)  oflS.ce  shall  be  in  the  city  of  , 

State  of  .     The  agent  iu  charge  of  said  office,  upon  whom  process  against 

the  company  may  be  served,  is 

Sec.  2.    The  compauy  may  also  have  an  office  iu  the  city  of  ,  State 

of  ,  and  also  have  offices  in  such  other  places  as  the  board  of  directors 

may  appoint. 

Article  II.     Meetings  of  Stockuolders. 

Sec.  1.  The  annual  meetings  of  the  stockholders  of  this  corporation  shall  be 
held  at  the  registered  (or  principal  or  busiuess)  office  of  the  corporation  in  the  city 
of  ,  State  of  ,  oil  the  day  of  in 

each  year  at  o'clock      M.,  for  the  election  of  directors  and  such  other  busi- 

ness as  may  properly  come  before  the  inceliug.  Notice  of  the  time,  place,  and 
object  of  such  meetuig  shall  be  given  (by  publication  thereof  iu  a  newspaper 
puolishcd  iu  tiie  county  where  election  is  held  at  least  ouce  in  cacli  week  for  two 
successive  weeks  immediately  preceding  such  meeting,  or  Note  A)  by  mailing  at 
least  days  previous  to  such  meeting,  postage  jjrepaid,  a  copy  of  such  notice 

addressed  to  each  stockholder  at  his  residence  or  place  of  business  as  the  same 
shall  appear  on  the  books  of  tiie  corporation.  No  business  other  than  that  stated 
in  such  notice  shall  be  transacted  at  such  meeting  without  the  unanimous  consent 
of  all  the  stockholders  present  thereat  iu  person  or  by  proxy. 

(Note  A  —  lor  New  York  and  South  Dakota.)  For  District  of  Columbia,  in 
absence  of  written  consent  of  all  the  stockholders,  meetings  for  the  election  of 
trustees  must  be  called  by  publishing  notice  thereof  not  less  than  thirty  days  before 
the  date  of  the  meeting  in  some  newspaper  printed  and  published  in  the  district. 

Note  (place  of  meeting).  In  South  Dakota  and  Arizona  meetings  should  be 
held  at  the  busiuess  office  as  provided  in  the  articles  of  incorporation.  In  Delaware 
the  Qrst  meeting  of  stockholders  is  held  within  the  State;  subsec^ueut  meetings  are 
lield  iu  the  i)lace  fixed  by  the  by-laws.  In  New  York  and  New  Jeis.y  within 
the  State,  and  in  District  of  Colu'ml)ia  within  the  district.  In  Nevada  and  West 
Virginia  meetings  may  be  held  outside  if  by-laws  so  i»roviile. 

Sec.  2.  Special  nieetiiig  of  the  stoekliolders  sliall  be  held  at  the  registered 
(or  principal)  office  of  the  company  (oral  the  business  office  of  the  company  in 
,  Note  A)  ill  ,  and  may  be  calli;(i  at  any  time  bv  a  majority 

of  the  directors  or  by  a  call  signed  by  stockholders  holding  one-third  of  the  voting 
stock  of  the  company.  Notice  of  every  special  meeting  stating  the  time,  place, 
and  object  thereof  sluill  be  given  by  maiiinfc,  |»ostage  nrepaid.  ut  least  davs 

before  ■;ueli  meeting  a  cojiy  of  such  notice,  addressed  to  each  stockholder  at  Ins 
post-office  address  as  the  same  ajypears  on  the  books  of  the  company. 

Note  A  inserted  where  meetings  may  be  held  outside  of  the  State     Sec  Note, 

Sec.  1.  •  I      • 

Sec.  3.    At  all  meetings  of  stockholders  there  shall  be  present,  cilhrr  iii  pcnon 

or 

cor| 

tors 


by  proxy,  stoekliolders  owning  a  majority  of  the  oiitstamling  capital  stock  of  the 
•poralioii,  in  order  to  constitute  a  (inoriim,  except  ("at  s|)eeial  elections  of  direc- 
„„.s  where  the  members  attending  shall  constitute  a  (|uoriim  and  except."  NoU;  A), 
where  otherwise  provide<l  by  statute  or  iiy  the  eeriifieale  of  incorporation. 
Note  A  inserted  for  New  York  only. 
Sec.  4.   At  all  meetings  of  stockholders  only  such  persona  shall  he  entitled  to 

519 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS, 

vote  in  person  or  by  proxy  wlio  sliall  appear  as  sfocklioldcrs  on  tlic  transfer  books 
of  the  corporation  for  '       (Note  A)  days  immediately  preeediiig  such  meeting. 

At  anv  re!:;ular  or  special  meetiui^  eaeli  stock hokU'r  sliall  be  entitled  to  one  vote  for 
everv'sliare  of  stock  held  in  his  name. 

\Viiere  cumulative  voting  fur  directors  has  been  ))rovided  for,  insert  the  follow- 
ing i)n)vision : 

"  in  all  elections  for  directors  each  stockholder  may  cumulate  his  shares,  and 
<rive  one  candidate  as  many  votes  as  tiie  number  of  directors  nniltiplied  by  the  num- 
ber of  his  shares  of  stock  shall  equal,  or  distribute  them  on  the  same  principle  among 
as  many  candidates  as  he  shall  think  lit." 

Note  A.  In  New  York  transfers  must  be  allowed  \\\)  to  within  ten  days  of 
election.  In  New  Jersey,  Nevada,  and  Delaware  up  to  within  twenty  days.  In 
"West  Virginia  no  definite  time  is  fixed. 

NoteB.  Cnnuilative  voting  if  desired  should  always  be  provided  for  in  the 
certificate  of  incorporation.  In  West  Virginia  cumulative  voting  for  directors  is  re- 
quired by  statute  and  must  appear  in  by-laws.  In  Nevada  stockhohiers  have  right 
of  voting  cnnudatively  unless  articles  of  incorporation  provide  otherwise.  Statutes 
of  District  of  Columbia  do  not  permit  of  cumulative  voting. 

Sec.  5  (for  New  Jersey  and  Nevada).  At  each  meeting  of  the  stockholders 
a  full,  true,  and  complete  list,  in  ali)habetical  order,  of  all  the  stockholders  entitled 
to  vote  at  such  meeting,  with  the  number  of  shares  held  by  each,  certified  by  the 
secretary  or  the  treasurer,  shall  be  furnished.  At  least  ten  days  before  each  annual 
meeting^  a  like  list,  containing  also  the  residences  of  the  stockholders,  shall  be  filed 
in  the  registered  office  as  required  by  statute. 

Sec.  Q  (all  States  except  New  "York).  At  all  elections  of  directors  the  polls 
shall  be  opened  and  closed,  the  proxies  shall  be  received  and  taken  in  charge,  all 
questions  touching  the  qualification  of  voters  and  the  validity  of  proxies,  and  the 
acceptance  or  rejection  of  votes  shall  be  decided  and  all  ballots  shall  be  received 
and  counted  by  two  inspectors.  Such  inspectors  sh;ill  be  appointed  by  the  presiding 
officer  of  the  meeting,  shall  be  sworn  to  faithfully  perform  their  duties,  and  shall,  in 
writing,  certify  to  the  returns.  No  candidate  for  election  as  director  shall  be 
appointed  or  act  as  inspector. 

Sec.  7  (for  New  York  only).  Two  inspectors  of  election  shall  be  elected  at 
each  annual  meeting  of  the  stockholders  to  conduct  the  election  of  directors  for  the 
ensuing  year.  Such  inspectors  shall  be  sworn  to  the  faithful  discharge  of  their  duty, 
and  in  event  of  the  absence,  inability,  or  refusal  of  either  to  serve,  the  meeting  may 
appoint  an  inspector  in  his  place. 

Sec.  8.  At  the  annual  meetings  of  stockholders  the  following  sbaU  be  the 
order  of  business  :  1.  Calling  of  roll;  2.  Proof  of  notice  of  meeting  ;  3.  Report  of 
president;  4.  Report  of  treasurer;  5.  Report  of  secretary;  6.  Report  of  com- 
mittees; 7.  Appointment  of  inspectors  of  election  of  directors;  8.  Election  of 
directors;  9.  Miscellaneous  business. 

Sec.  9.  At  all  meetings  of  stockholders  all  questions,  except  tlie  question  of 
an  amendment  to  the  by-laws  and  the  election  of  directors,  and  all  such  other  ques- 
tions the  manner  of  deciding  which  is  especially  regulated  by  statute,  sliall  be  deter- 
mined by  a  majority  vote  of  the  stockholders  present  in  person  or  by  proxy  ;  provided, 
however,  that  any  qualified  voter  may  demand  a  stock  vote,  and  in  that  case  such 
stock  vote  shall  immediately  be  taken,  and  each  stockholder  present  in  person  or  by 
proxy,  shall  be  entitled  to  one  vote  for  each  siiare  of  stock  owned  by  liiui  as  provided 
in  section  4.  All  voting  shall  be  vim  voce,  except  that  a  stock  vote  shall  be  by 
ballot,  each  of  which  shall  .state  the  name  of  the  stockholder  voting  and  the  number 
of  shares  owned  by  him,  and  in  addition  if  such  ballot  be  cast  by  a  proxy,  it  shall 
also  state  the  name  of  such  proxy. 

Akticle  III.    Directors. 

Sec.  1.  The  directors  of  this  corporation,  of  whom  at  least  (A)  shall  be  a 
resident  of  ,  shall  be  elected  by  ballot,  for  the  term  of  one  year,  at  the 

annual  meeting  of  stockholders,  except  as  hereinafter  provided  for  filling  vacancies. 

520 


FORMS   AND   PRECEDENTS. 

The  directors  shall  oc  choseu  by  a  plurality  vote  of  the  stockholders,  voting  eitlicr 
iu  person  or  by  proxy  at  each  auuual  election.  The  directors  shall  eacli  hold  at 
least  (B)  sliares  of  stock. 

Note  A.  In  Now  York,  New  Jersey,  and  Delaware  at  least  one  director 
shall  be  a  resident  of  the  State  ;  in  District  of  Columbia,  a  majority  of  trustees 
shall  be  citizens;  in  Arizona,  Nevada,  and  South  Dakota  omit  provision  as  to  resi- 
dence; iu  West  Virginia  directors  need  not  be  residents  of  the  State  if  by-laws  so 
provide.     In  West  Virginia  number  of  directors  must  be  set  out  in  by-laws. 

Note  B.  In  New  York,  New  Jersey,  Arizona,  West  Virginia,  District  of 
Columbia,  Soulli  Dakota,  and  Nevada  each  director  should  ordinarily  hold  at  least 
one  share  ;  in  Delaware  three  sliares. 

Sec.  2.  Vacancies  in  the  board  of  directors  occurring  during  the  year  shall 
be  filled  for  the  unexpired  term  by  a  majority  vote  of  iLe  remaining  directors  at  any 
special  meeting  called  for  that  purpose  or  any  regular  meeting  of  the  board. 

Sec.  3.  In  case  the  entire  board  of  directors  shall  die  or  resign,  any  stock- 
holder may  call  a  special  meeting  of  stockholders  in  the  same  manner  that  the 
president  may  call  such  meeting,  and  directors  for  tlie  unexpired  term  may  be 
elected  at  such  special  meeting  iu  the  manner  provided  for  their  election  at  annual 
meetings. 

Sec.  4.  The  board  of  directors  may  adopt  such  rules  and  regulations  for  the 
conduct  of  their  meetings  and  management  of  the  affairs  of  the  corporation  as  they 
deem  proper,  not  inconsistent  with  the  laws  of  the  State  of  or  these 

by-laws. 

Sec.  5.    The  board  of  directors  shall  meet  on  the  day  of  every  month 

or  whenever  called  together  by  the  president  upon  due  notice  given  to  each  director. 
On  the  written  request  of  any  director  the  secretary  shall  call  a  special  meeting  of 
the  board.  At  such  mectiug  a  majority  shall  constitute  a  quorum  for  the  transactiou 
of  business. 

Sec.  6.  Meetings  of  the  board  of  directors  of  this  company  or  of  the 
executive  committee  appointed  thereby,  may  be  held  either  at  the  })rincipal  office 
of  the  company  at  ,  county  of  and  State  of  , 

or  at  the  business  office  of  the  company  to  be  opened  and  mainlaiucd  l)y  it  at  the 
city  of  ,  State  of 

Article  IV.    Executive  Committee  and  other  Comsiittees. 

Sec.  1.    The  board  of  directors  may  appoint  of  their  own  number 

to  act  as  au  executive  coinmittee  to  serve  during  the  life  of  the  board  that  aj)- 
pointed  it. 

Sec.  2.  The  executive  committee  shall  have  entire  control  and  supervision  of 
all  of  the  property  and  business  allairs  of  the  corporation,  and  shall  have  and  exercise 
all  the  powers  and  |trivileges  which  arc  possessed  and  exercised  by  the  l)oard  of 
directors. 

Sec.  3.  All  action  by  the  executive  committee  shall  Ik;  renorted  to  the  board 
at  its  meeting  next  succeeding,  and  sucli  action  shall  be  suliieet  to  revision  or 
alteration  by  the  board  jirovided  that  no  rights  of  I  bird  parties  shall  be  alfecl^jd  by 
any  such  revision  or  alteration. 

Sec.  4.  From  time  to  time  the  board  may  ammint  any  other  committee  or 
committees  for  any  j)nr|tose  or  pur|)oses  who  shall  have  such  powers  us  shall  be 
speeidcd  in  the  resolution  of  aj)pointineiit. 

(The  powers  of  the  executive  committee  depend  upon  the  statutes,  and  therefore 
the  above  will  vary  with  reference  to  particular  powers  that  may  be  delegated  by 
the  board  to  committees.) 

Article  V.    OKnfKH.H. 

Sec.  I.  The  board  of  directors  immediately  after  the  annual  nieeling  Hiinll 
choose  one  of  their  number  by  a  majority  vote  to  be  president,  and  it  shall  apjwiut 

521 


INCOlll'OUATION    AND    OUGANIZATION    OF   CORPORATIONS. 

n  vioo-pivsidont,  st'crotan',  and  tivasurcr  ami  suoh  suljurdinate  ollicors  as  it  sliall 
doeiu  iKTOssarv.  Each  of  such  olliccrs  shall  serve  lor  the  term  of  one  year  or  until 
the  next  annual  election.  Vacancies  occuning  among  the  ollieers  may  be  filled  by 
the  board  of  directors  for  the  unexpired  term. 

Sec.  '2.  Tlie  prexidciit  shall  j)reside  at  all  meetings  of  the  board  of  direc- 
tors, and  shall  act  as  chairman  at,  and  call  toorderall  meetings  of  the  stockholders. 
He  shall  sign  all  certilicatcs  of  stock  (and  countersign  all  eliecks,  bills,  and  notes 
drawn  by  the  treasurer).  He  sliall  submit  a  com|)lete  report  of  the  operations  and 
couditious  of  the  company  for  the  year  to  the  directors  at  their  regular  meeting  iu 
and  to  the  stockholders  at  their  regular  meeting  iu  of  each  year, 

and  from  time  to  time  shall  rcj)ort  to  the  directors  all  matters  within  liis  knowledge 
which  the  interests  of  the  company  may  retjuire  to  l)o  brought  to  their  notice  ;  he 
shall  be  au  c.v  officio  member  of  all  standing  committees,  and  shall  have  the  general 
powers  and  duties  of  supervision  and  management  usually  vested  in  the  office  of  a 
president  of  a  eor[)oratiou. 

Sec.  3.  The  first,  second,  and  third  vice-presidents  shall,  iu  the  al)seuee  or  in- 
capacity of  the  jjresideut,  perform  the  duties  of  that  officer  iu  succession  according 
to  their  rank  unless  the  board  shall  otherwise  determine. 

Sec.  4.  The  treasurer  shall  have  the  custody  of  all  the  funds  and  securities  of 
the  corporation,  and  deposit  the  same  in  the  name  of  the  corporation  in  such  bank 
or  banks  as  the  directors  may  elect;  he  shall  sign  all  checks,  drafts,  notes,  and 
orders  for  the  payment  of  money  (which  shall  be  countersigned  by  the  j)resident) 
and  he  shall  pay  out  ami  dispose  of  the  same  under  the  direction  of  the  ])resident. 
He  shall  at  all  reasonable  times  exhibit  his  books  and  accounts  to  any  director  or 
stockholder  of  the  company  upon  applicatiou  at  the  office  of  the  company  during 
business  hours.  (He  shall  sign  all  certificates  of  stock  signed  by  the  president, 
Note  A)  ;  he  shall  give  such  bond  for  the  faithful  performance  of  his  duties  as  the 
board  of  directors  may  require. 

Note  A.  The  president  and  secretary  must  sign  in  South  Dakota.  In  New 
York,  Arizona,  Nevada,  West  Virginia,  and  District  of  Columbia,  ordinarily  the 
president  and  secretary  or  treasurer.  In  New  Jersey  and  Delaware,  the  president 
and  treasurer. 

Sec.  5.  The  secretary  shall  keep  the  minutes  of  proceedings  of  the  board  of 
directors  and  the  minutes  of  the  meetings  of  stockholders ;  he  shall  attend  to  the 
giving  and  serving  of  all  notices  of  the  company ;  he  shall  affix  the  seal  of  the  com- 
])any  to  all  certilicatcs  of  stock  ;  he  shall  have  charge  of  the  certificate  book  and 
such  other  books  and  papers  as  the  board  may  dinict;  he  shall  attend  to  such  cor- 
respondence as  may  be  assigned  to  liiin,  and  perform  all  the  duties  incidental  to  his 
office.  He  shall  also  keej)  a  stock  book  containing  the  names,  alphabetically  arranged, 
of  all  persons  who  are  stockholders  of  the  corporation,  showing  their  places  of  resi- 
dence, the  number  of  shares  held  by  them  respectively,  the  time  when  they  respec- 
tively became  owners  thereof,  and  the  amount  paid  thereon,  and  such  book  shall  be 
open  for  inspection  of  stockholders  during  tiie  usual  business  hours  (in  New  York 
at  least  three  hours)  at  the  office  of  the  company.  ("  He  shall  be  sworn  to  the 
faithful  discharge  of  his  duties,"  Note  A.)  ("  He  shall  sign  all  certificates  of  stock 
signed  by  the  [)resideut."     See  section  4,  Note  A.) 

Note  A.  Necessary  in  Delaware,  Nevada,  and  New  Jersey,  and  usually 
provided. 

(In  the  District  of  Columbia  the  following  should  be  added  to  the  powers  of  the 
secretary :) 

If  at  any  time  he  shall  not  reside  within  the  District  of  Columbia  he  shall  see 
that  all  proper  transfers  shall  be  made  in  the  stock  bof)k  of  the  company  kept  at  the 
registered  ofiBce  of  the  company  in  the  District  of  Columbia. 

(The  following  section  should  be  inserted  where  counsel  is  provided  for :) 

Sec.  6.  The  counsel  of  the  company  shall  prepare  all  such  contracts  and  agree- 
ments required  in  the  business  of  the  com])any  as  may  be  referred  to  him  by  its 
officials;  he  shall  inspect  and  pass  upon  all  such  instruments  as  may  be  prcscuted 
to  the  company  and  be  of  sufficient  importance  to  justify  such  examination.     He 

522 


FORMS   AND    PRECEDENTS. 

shall  also  advise  -n-ith  the  officers  of  the  company  iu  such  legal  matters  pcrtaiuing  to 
the  affairs  of  the  company  as  may  require  his  cousideratiou. 

Akticle  VI.     Capital  Stock. 

Sec.  1.  Subscriptions  to  the  capital  stock  must  be  paid  to  the  treasurer  at 
such  times  and  in  such  instalments  as  the  board  of  directors  may  by  resolution  re- 
quire. Any  failure  to  pay  any  instalment  when  required  to  be  paid  by  the  board  of 
directors  shall  work  a  forfeiture  of  sucii  share  of  stock  iu  arrears. 

Note.  If  preferred  stock  is  provided  for,  the  provisions  and  conditions  of  its 
issue  should  be  set  fortli  here. 

If  stock  is  to  be  made  full-paid  iu  the  begiuoing,  in  consideration  of  the  transfer 
of  property,  etc.,  section  1  may  be  omitted. 

Sec.  2.  Certificates  of  stock  shall  be  numbered  and  registered  in  the  order 
they  are  issued,  and  shall  be  signed  by  the  president  and  by  the  treasurer  ("  Secre- 
tary," see  Art.  V.  sec.  4,  Note  A),  and  the  seal  of  the  corporation  shall  be  affi\ed 
thereto.  All  certificates  shall  be  bound  in  a  book,  and  shall  be  issued  in  consecutive 
order  therefrom,  and  iu  the  nuirgin  thereof  shall  be  entered  the  name  and  address  of 
the  person  owning  the  shares  therein  represented,  the  number  of  shares  and  the  date 
of  issuing  thereof.  All  certificates  exchanged  or  returned  to  the  corporation  shall 
be  marked  cancelled,  with  the  date  of  cancellation  by  the  secretary,  and  shall  be 
immediately  pasted  in  the  certificate  book  opposite  the  memorandum  of  its  issue. 

Sec.  3.  Transfers  of  shares  shall  only  be  made  upon  the  books  of  the  corpora- 
tion by  the  holder  in  person  or  by  power  of  attorney  duly  executed  and  acknowledged 
and  filed  with  the  secretary  of  the  corporation,  and  on  the  surrender  of  the  certificate 
or  certificates  of  such  shares. 

Sec.  4.  The  board  may  appoint  a  transfer  agent  and  a  registrar  of  transfers, 
and  may  require  all  stock  certificates  to  bear  the  signature  of  either  or  both. 

Sec.  5.  W'henever  the  capital  stock  of  the  company  is  increased,  eaeli  bona 
fide  owner  of  its  stock  shall  be  entitled  to  purciiase,  at  the  par  value  thereof, 
an  amount  of  stock  in  proportion  to  the  number  of  shares  of  stock  he  owns  iu  the 
corporation  at  the  time  of  such  increase. 

Article  VII.    Dividends. 

Sec.  1.  Dividends  shall  be  declared  and  paid  out  of  the  sur|)liis  profits  of  the 
corporation  as  often  and  at  such  times  as  the  hoard  may  determine.  No  dividend 
shall  be  declared  or  paid  that  tends  to  curtail  the  elfeclive  operation  of  the  business. 

Article  VIII.     Seal. 

Sec.  1.  The  seal  of  the  corporation  shall  be  iu  the  form  of  a  circle,  and  shall 
bear  the  name  of  the  cor|)oration  and  the  year  of  its  incorporation,  and  the  words 
"corporate  seal"  (name  of  Strife). 

Article  IX.     Amendments. 

Sec.  I.  The  board  of  directors  shall  have  power  to  make,  amend,  or  repeal  the 
by-laws  of  the  company  by  the  vote  of  a  maiorily  of  all  of  \\w.  direolnr.s  at  any  rcgidnr 
or  special  meeting  of  the  board  provided  that  notice  of  intention  to  ("make,)  amend, 
or  re])eal  the  by-laws  in  whole  or  in  part  at  such  meeting  .shall  liavc  l)rcn  pre- 
viously given  to  each  member  of  the  board,  or  witliout  any  such  notice  by  a  vote  of 
two-thirds  of  all  of  the  directors  (Note  A). 

Sec.  2.  All  of  the  by-laws  shall  be  subject  to  amendment,  alteration,  and  repeal 
at  any  annual  meeting  of  stockholders  or  at  any  special  iiii-eling  calhrd  for  that 
purpose  by  the  affirmative  vote  of  a  majoritv  of  stock  (Note  \\). 

Sec.  .'i.  In  all  cases,  whether  amended  by  the  board  of  directors  or  by  flic 
stockholders,  a  copy  of  such  amended  liy-Iaw  shall  be  sent  to  each  stockliolder 
within  ten  davs  aft«r  the  adoption  of  the  sanu;. 

Note  A.   In  West  Virginia,  board  of  directors  may  not  be  given  such  juiwer 

523 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

to  "make,  cic."  by-laws.      Certificate  of  incorporatinu  slioulil  generally  provide 
for  anieiulmeiit   l)y  directors  where  this  power  is  desired. 

NoTt  r>.    Wiiat  cuiistitutes  a  valid  vote  deiieuds   upon  the  statutes  of  each 
State. 

MISCELLANEOUS   FORMS   AND   PRECEDENTS. 


SUBSCRIPTION  AGREEMENT  BEFORE  ORGANIZATION. 

iritereas,  the  organization  is  conteniiilated  of  a  corporation  under  the  laws  of 
the  State  of  ,  to  be  known  as  the 

or  by  such  other  name  as  may  be  selected,  with  a  capital  stock  of  not  less  than 
^  for  the  purpose  of 

and  it  is  desired  by  the  undersigned  to  become  stockholders  in  said  corporation. 

Now,  therefore, 

the  undersigned, 
do  licreby  promise  and  agree  to  and  with  each  other  all  in  consideration  of 

the  mutual  promises  and  agreements  herein  contained,  that  they  will  pay  to  the 
Treasurer  of  said  corporation  as  soon  as  he  shall  have  been  elected  to  that  office,  on 
demand,  the  sum  of  dollars,  being  the  subscription  price  of 

shares  of  the  capital  stock  of  the  said  corporation,  or  sueh  ])art 
thereof  as  may  be  called  for.  The  stock  thus  paid  for  to  be  delivered  at  the  earliest 
possible  mouient  after  the  organization  of  the  company,  and  meanwhile  proper 
receipts  to  be  issued  to  the  undersigned. 

We  hereby  further  agree  in  consideration  as  aforesaid,  that  our  several  sub- 
scriptions to  the  capital  stock  of  said  Company  to  be  formed,  are 
hereby  made  for  the  use  and  benefit  of  said  Company,  and  that 
•when  said  is  duly  formed  and  organized,  tliat  the  said  subscrip- 
tions hereby  made  may  be  enforced  by  it  either  at  law  or  otherwise  as  the  Board 
of  Directors  of  said  company  may  hereafter  determiue. 

Names.  Residences. 

PROXY 
For  Meeting  of  Incorporators  and  Subscribers. 

,  one  of  the  incorporators  of  the  Comy)any,  and  a  subscriber 

to  shares  of  the  stock  thereof,  hereby  appoints 

as  proxy  with  full  power  of  substitution  and  revocation  to  vote  for  and  on  behalf  of 
the  undersigned  at  the  organization  meeting  of  the  corporation  to  be  held  at 
on  the  day  of  ,  190     ,  or  at  any  adjournment  thereof. 

Witness,  my  hand   and   seal   this  day  of  ,  190 


In  the  presence  of : 

PROXY  AND  WAIVER  OF  NOTICE  (Combined). 


(L.  s.) 


K710W   all   Men    by    these    Presents,    That    I,    the    undersigned,    being    the 
owner  of  shares  of  the  capital  stock  of  the  Company, 

a  corporation  organized  and  existing  under  the  laws  of  the  State  of  , 

do  hereby  constitute  and  appoint  my  true  and  lawful  attorney, 

for  me  and  in  my  name  and  stead,  to  vote  upon  the  stock  owned  by  me  or  standing 
in  my  name,  as  my  proxy  at  a  special  (or  annual)  meeting  of  the  stockholders  of 
said  company,  to  be  held  at  the  office  of  the  company  in  tiie  City  of  , 

State  of  ,  on  the  day  of  ,190    (hereby  waiving 

all  statutory  requirements  as  to  notice  of  said  meeting  and  ])ublication  thereof), 
and  on  such  other  day  or  days  as  the  meeting  may  be  thereafter  held  by  adjourn- 

524 


FORMS   AND   PRECEDENTS. 

meut  or  otherwise,  accordiug  to  tlie  number  of  votes  I  am  now  or  may  then  be 
entitled  to  cast,  hereby  granting  the  said  attorney  full  power  and  authority  to  act 
for  nie  and  in  my  name  at  said  meeting  or  meetings  in  voting  for  tiie  election 
of  directors  of  the  company,  or  in  the  trausactiou  of  such  other  business  as 
may  properly  come  beiore  the  meeting,  as  fully  as  I  could  do  if  personally  present, 
hereby  granting  the  said  attorney  full  power  of  substitution  and  revocation,  and 
hereby  ratifying  and  confirming  all  that  my  said  attorney  or  substitute  may  do  in 
my  name,  place,  and  stead. 

In  Wiliiess  Whereof,  I  have  hereunto  set  my  hand  and  seal  this  day 

of  ,  190  . 

Witness : 

TRANSFER  OF  SUBSCRIPTION. 

For  value  received,  the  undersigned  does  hereby  sell,  assign,  transfer,  and  set 
over  unto  all  liis  right,  title,  and  interest  as  an  incorporator  of 

and  as  a  subscriber  to  the  capital  st(jck  of  the  Company  to  the 

extent  of  shares  of  the  capital  stock  thereto. 

I  hereby  request  and  direct  the  proper  officers  of  said  Company  to  issue  a 
certiQcate  for  said  shares  to  the  aforesaid  assignee  or  his  assigns. 

In  Witness  Whereof,  I  have  hereunto  set  my  hand  and  seal  this  day  of 

,  190    . 

Dated 

.      (L,S.) 

Witness : 

FORM  OF  LETTER  ADDRESSED  TO  CORPORATION  OFFERING  TO 
TRANSFER  PROPERTY  IN  EXCHANGE  FOR  CAPITAL  STOCK  OF 
A  CORPORATION. 

To  tlie  Stockholders  of  the  Company  : 

I  am  the  owner  in  fee  of  the  following  described  real  estate  (or,  in  case  of  personal 
property,  tlie  clause  should  read,  "  the  owner  of  the  following  described  jicrsonal 
property),  to  wit :  (here  insert  description  of  property). 

I  licn;by  offer  to  transfer  to  you  the  property  above  described  within 
days  from  date  hereof,  in  consideration  of  the  assignment  to  me  within  the  said  period 
of  time,  of  shares  of  the  capital  stock  of  your  Company.     The  offer 

herein  contained  is  made  subject  to  acceptance  by  your  C(jri)orati(m  within 
days  from  the  date  hereof.     If  the  offer  is  not  accepted  within  said  time,  the  same 
shall  forthwith  become  null  and  void. 

Respectfully  Submitted. 

AGREEMENT  FOR  THE  SALE  OF  REAL  OR  PERSONAL  PROPERTY 
TO  A  CORPORATION  IN  EXCHANGE   FOR  ITS  CAPITAL  STOCK. 

This  agreement  made  this            day  of               ,  190  ,  by  and  between 

of  the  City  of  ,  County  of                 ,  State  of                 ,  party 

of  the  first  part,  and  the  Company,  a  corporation  organized  and  cxislinff 

under  and  by  virtue  of  the  laws  of  the  Stj\t^  of                      ,  parly  of  the  second 

part.  r     •  I 

Witness,  For  and  in  consideration  of  the  sum  of  SI. 00  imid  by  carh  of  jiaid  parties 
of  the  first  and  second  parts  to  each,  the  rec<ipt  whercot  is  hercliy  ncknowlcdged, 
and  in  further  consideration  of  the  mutual  covenants  and  agreenieiit.s  herein  con- 
tained, it  ia  hereby  agreed  by  and  between  the  said  parties  of  this  agreement  as 
follows: 

First.    The  said  parly  of  the  first  pari  hereby  agrees,  within  days  from 

the  date  of  this  agreement,  io  sell,  convey,  assign,  transfer,  and  deliver  1<»  the  said 
party  of  the  second  part  the  following  described  real  estate  (or  personal  proiMjrty), 
to  wit: 

525 


INCOKPORATION    AND   ORGANIZATION   OP   CORPORATIONS. 

(TToro  insert  iloscription  of  tlio  property  to  bo  sold,  conveyed,  transferred,  as- 
signed, and  delivrrod.) 

Second.  Saiil  party  of  the  first  ])art  licreby  warrants  that  it  is  the  owner  in  fee  of 
said  real  estate  above  "described  (or,  in  case  of  jHTsonal  jtroperty,  that  it  is  the  owner 
of  tlie  personal  i)roperty  above  descrii)e(l)  all  of  which  is  hereby  warranted  to  be  free 
and  clear  fnun  all  liens,  charj^es,  incnuii)rances,  taxes,  and  assessments  wliatsoever. 

'T/iin/.    Tlie  said  party  of  tlic  second  part  hereby  agrees  that  fortiiwith,  \ipon  due 
conveyance  to  it  (in  case  of  personal  projterty  npon  the  due  transfer,  assignnicnt, 
or  dciivery)  of  said  real  estate  by  said  party  of  the  first  part,  it  will,  in  considera- 
tion therefor,  assign,  transfer,  and  deliver  to  said  Jiarty  of  the  first  part 
shares  of  the  conunon  stock  of  the  Company  (party  of  the  second  part 

liercto)  of  the  par  value  of  dollars  per   share,  aggregating  |  in 

amount. 

Ill  Witiipus  Whereof,  the  said  parties  of  the  first  and  second  parts  have  hereunto 
set  their  hands  and  seals  this  day  of  ,  190  . 

[seal.] 
Co.  [seal.] 
By  ,  Fres. 

Attest :  Sec'y. 

State  of 
County  of 

On  this  day  of  ,  in  the  year  ,  before  me  personally  came 

,  to  me  known  and  known  to  me  to  be  the  individual  described  in, 
and  who  executed  the  foregoing  instrument,  and  who  acknowledged  to  me  that  he 
executed  the  same. 

,  Notary  Public, 

Co. 
State  of 


>  ss. 


V- 


state  of 
County  of 

On  the  day  in  the  year  before  me  personally  came  _     ,  to 

me  known,  who  being  by  me  duly  sworn  did  depose  and  say  that  he  resided  in 
;  that  he  is  the  President  of  Company,  the  corporation 

described  in  and  which  executed  the  above  instrument ;  that  he  knew  tiie  seal  of  said 
corporation;  that  the  seal  affixed  to  said  instrument  was  such  corporate  seal; 
that  it  was  so  affixed  by  order  of  the  Board  of  Directors  of  said  corporation,  and 
that  he  signed  his  name  thereto  by  like  order. 

,  Notary  Public, 

County, 
state  of 


FORM  OF  TRUST  AGREEMENT. 

(This  agreement  will  be  found  very  convenient  where  it  is  desired  to  get  stock  back 
into  the  treasury  as  full-paid  and  non-assessable  stock,  subject  to  sale  below  par  if  desired.) 

This  Agreement,  entered  into  this  day  of  >  190  ,  by  and 

between  of  the  City  of  ,  State  of  , 

party  of  the  first  part,  and  the  Company,  a  corporation  organized 

and  existing  under  the  laws  of  the  State  of  ,  party  of  the  second  part, 

witnesseth  as  follows : 

First.  That  in  consideration  of  the  mutual  covenants  and  agreements  herein 
contained,  said  party  of  the  first  part  does  hereby  assign,  transfer,  and  set  over 
unto  said  party  of  the  second  part  shares  ot  the  capital  stock  of  the 

Company,  of  the  par  value  of  dollars  per  share   to  be 

held  by  said  party  of  the  second  part  in  trust,  and  to  be  disposed  of  under  the 
direction  of  the  Board  of  Directors  of  said  party  of  the  second  part  for  the  benefit 

526 


FORMS    AND    PRECEDENTS. 

of  the  stockholders  of  said  party  of  tlie  second  part  with  a  view  to  securing  the 
necessary  funds  willi  wliich  to  carry  on  the  business  of  said 
Company,  and  to  provide  a  working  capital  therefor. 

Second.  The  said  party  of  the  second  part  hereby  accepts  the  assignment  and 
transfer  of  said  shares  of  the  capital  stock  of  said 

Conijiany  to  be  lield  by  and  disposed  of  by  it  for  the  purposes  above  stated. 

T/iird.  Said  party  of  the  second  part  further  covenants  and  agrees  that  it  will 
at  all  times  iiold  and  dispose  of,  at  such  prices  and  under  such  terms  and  conditions 
as  its  Board   of  Directors   may  prescribe,  said  shares   of  said   capital 

stock  of  said  Company,  with  a  view  to  securing  adequate  and  suf- 

ficient capital  with  which  to  carry  out  the  purposes  for  which  said 
Company  was  formed. 

In  jrUiiess  Whereof,  said  parties  of  the  first  and  second  parts  have  hereunto  set 
their  hands  and  seals  this  day  of  ,  190  . 

,  Parti/  of  the  first  part. 

Company. 

By  ,  President, 

,  Parti/  of  the  second  part. 

State  of  } 

County  of  ^ 

On  this  day  of  ,  190  ,  before  me  personally  came  , 

to  me  known  and  known  to  me  to  be  the  person  described  in  and  who  executed  the 
foregoing  instrument,  and  duly  acknowledged  to  me  that  he  executed  the  same. 

,  Notary  Public. 

County. 
State  of  7 

County  of  \     ' 

On  this  day  of  ,  190     ,  before  me  personally  came  , 

who  being  by  me  duly  sworn  did  depose  and  say :  tluit  he  resided  in  the  City  of 
;  that  he  was  the  President  of  the  Company,  the 

corporation  described  in  and  which  executed  the  foregoing  instrument;  that  he 
knew  the  seal  of  said  corporation;  that  the  seal  affixed  to  sueli  instrument  was 
such  corporate  seal;  that  it  was  so  affixed  by  order  of  the  Board  of  Directors,  and 
that  be  signed  his  name  thereto  by  like  order. 

,  Notary  Public, 

County. 

CERTIFICATE  OF  COMMON  STOCK. 

(Number.)  (Shares.) 

Incorporated  under  the  laws  of 


Name  of  Corporation. 

Capital  Slock,  ij 

Thin  certifies  iWdi  is  the  owner  of  shares  of  the  capi- 

tal stock  of  the  Company,  trnnsfei-ahic  only  on  the  books  of  tbo 

corporation  in  person  or  by  attorney  upon  .surrender  of  tlii«  eertifiratc. 

In  Witness  Whereof,  \\\c  duly  authorized  officers  of  this  ron>om- 
(coiiPORATE  tion  have  hereunto  subscribi-d   their  names  and  cauBeil  the 

SEAL.)  corpornte  seal  to  be  hereto  affixed,  this  day  of  , 

A.  D.  190  . 

Sliarcs  each. 

627 


INCORrORATION    AND    ORGANIZATION    OF   CORPORATIONS. 


CERTIFICATE  OF  PREFERRED  STOCK. 

(Number.)  (Shares.) 

Incorporated  under  the  laws  of 


Name  of  Corporation. 


Capital  Stock,  | 
Common  Stock,  $  ;  Preferred  Stock,  $ 

Thix  is  to  certify  that  is  entitled  to  fully  paid  and  non- 

assessable sliarcs  of  tlie  par  value  of  %  each  of  the  preferred  eajjital  stock  of 

the  Company,  transferable  only  on  the  books  of  the  corporation  iu 

person  or  by  proxy,  or  by  attorney  upon  the  surrender  of  this  certificate. 

The  liolders  of  preferred  stock  arc  entitled  to  receive,  and  the  Company  is  bound 
to  pay  out  of  any  and  all  surplus  protits  wlienevcr  ascertained,  (non)  cumulative 
dividends  thereon'  at  the  rate  of  and  not  exceeding  per  cent  per  annum, 

payable  in  quarterly,  yearly,  or  half-yearly  instalments  as  the  Board  of  Directors 
may  direct,  before  any"  dividends  shall  be  declared  or  paid  on  the  common  stock. 

The  preferred  stock  is  subject  to  redemption  at  par  on  the  day  of  , 

190  ,  or  at  any  other  period  thereafter  that  the  Board  of  Directors  may  select.  (The 
holders  of  preferred  stock  shall  not  be  entitled  to  any  voting  powers  in  the 
corporation.) 

In  Witness  Whereof,  the  duly  authorized  officers  of  the  corporation  have  hereto 
subscribed  their  names  and  caused  the  corporate  seal  to  be  hereto  aSixed  this 
day  of  ,  190  .  

(seal.) 


CERTIFICATE  OF  INSPECTOR  OF  ELECTION. 

The  undersigned,  having  been  duly  appointed  Inspector  of  Election  of  directors 
of  the  Company,  pursuant  to  the  statute  in  such  ease  made  and 

provided  at  the  annual  meeting  of  the  stockholders  of  said  corporation  held  for  tliat 
purpose  on  the  day  of  ,190   ,  at  the  office  of  the  company  in  the  City 

of  ,  do  hereby  certify  that  at  such  election  tliere  were  present  and  voting 

shares  of  the  stock  of  said  corporation  with  tiic  following  result,  to  wit: 

The  said  persons  above  named  having  received  a  majority  of  all  the  votes  cast 
at  such  election  are  hereby  declared  by  us  to  have  been  elected  directors  by  a 
majority  of  the  whole  number  of  shares  outstanding  in  said  company. 


RESOLUTION  OF  DIRECTORS   AUTHORIZING  THE 
CONTRACTION   OF   A   SPECIFIC   DEBT. 

Whereas,  it  appears  to  this  board  that  dollars  are  necessary  with 

which  to  enable  the  company  to  meet  its  obligations  now  due  and  owing;  and 

Whereas,  there  is  no  money  iu  tlie  treasury  of  tlie  company  at  the  present  time 
with  which  to  meet  said  obligations,  Now,  tliereforc, 

Be  it  resolved,  that  the  proper  officers  of  tliis  corporation  be  and  they  hereby 
are  authorized  to  contract  a  loan  for  tliis  comjjany  to  the  amount  of 

528 


FORMS    AND    PRECEDENTS. 

dollars,  aud  to  give  therefor  a  promissory  note  of  this  company  for  said  amount, 
same  to  bear  interest  at  the  rate  of  per  cent  per  annum  until  paid,  and  to 

become  due  mouths  after  date  thereof,  and  the  said  officers  are  hereby 

authorized  to  secure  payment  of  said  note  by  jjiviug  a  mortgage  ou  such  real  estate 
of  the  compauy  as  may  be  required  or  as  may  be  expedieut. 

I,  ,  Secretary  of  the  i  Company,  a  corpo- 

ration organized  and  existing  under  the  laws  of  the  State  of  , 

do  luMcby  certify  that  the  foregoing  is  a  true  aud  correct  copy  of  the  resolution  of 
the  Board  of  Directors  of  said  corporation,  duly  adopted  at  the  regular  meeting 
of  said  Board  of  Directors  held  at  the  office  of  said  compauy  on  the  day  of 

,  190  ,  aud  that  the  same  is  entered  as  such  in  the  minute  book  of  said 
Board  of  Directors. 

Witness  my  hand  and  the  seal  of  said  corporation  the         day  of  ,  190     . 

,  Secretary. 
(seal.) 

WAIVER  OF  NOTICE  OF  ASSESSMENT. 

Wc,  the  undersigned,  hereby  waive  notice  of  the  time  aud  place  of  the  payment 
of  o\ir  respective  subscriptions  to  the  capital  stock  of  the  Company, 

aud  also  waive  all  requirements  of  law  as  to  notice  of  assessment  aud  payment 
thereof. 

Aud  we  hereby  agree  to  pay  the  same  to  the  Treasurer  of  said  Compauy  in  such 
amounts  and  iu  such  time  or  times  as  the  Board  of  Directors  may  require. 


CERTIFICATE   OF  THE  SECRETARY  OF  A  CORPORATION  TO  THE 
PASSAGE  OF  A  RESOLUTION. 

I,  ,  Secretary  of  the  Company,  hereby  certify  that  the 

Resolution  above  set  forth  is  a  full  and  true  copy  of  the  same  as  passed  by  the 
Board  of  Directors  (or  by  the  stockholders)  of  said  Company  at  nieefiug 

of  said  Board  (<ir  of  the  stockholders)  iicld  on  the  day  of  ,  190  , 

as  taken  from  and  compared  with  the  original  resolution  as  recorded  in  the  minute 
book  of  the  Company. 

Witness  my  hand  aud  the  seal  of  the  Ccunpauy  this  day  of  , 

190  . 


(corporate 

SEAL.) 


Secretarif. 


APPOINTMENT  OF  AGENT. 

Arizona  Form. 
Tiic Company. 

Know  all  Men  by  tiie.se  1'resent.s:  That  t lie  Company,  a  cor- 

poration organized  under  tlio  laws  of  Arizona,  has,  at  a  rrgularly  held  meet in^' of  the 
of  the  said  Corpomlion,  by  resolution  properly  e;irricd  aiul  .spn-ad  upon 
the  minutes  of  said  meeting,  authorized  and  cinpowrrcd  and  do.s  by  tlic.s<!  lurscnls 
authorize  and  empower  of  I'lurnix,  Ariz(nia.  for  and  in  l)ehall  of  said 

Com|)any,  to  accept  and  acknowh'd<,'e  servife  of,  and  u|)on  whom  may  be  served  all 
notices  or  processes  or  summons  in  any  action,  suit,  or-proeenlinsf  that  niny  bi'  had 
or  brouglit  against  the  said  Company  m  any  of  the  courts  of  Arizona,  sueh  srrvicc 
of  process  or  notice,  or  the  acceptaiicu  thereof  by  said  agent  cnd(jrscd  thereon,  to 
34  529 


INCORrORATION    AND   ORGANIZATION    OF   CORPORATIONS. 

Iiavo  tlio  same  force  as  if  served  personally  upon  flic  Corporation  or  the  President 
and  Seeretary  tiiereof,  tiie  said  Corporation  hereby  revoking  any  power  of  attorney 
or  appointment  of  Ai::ent  heretofore  made  by  it  for  the  i)nrpose  dcsi!i:nated  above. 
Jf'if/irss  the  siijnature  of  the  President  and  Secretary  of  said  Company  this 
day  of         ^       ,  190  . 

,  President. 
,  Secretary. 


APPOINTMENT  OF  AGENT. 

West  Virginia  Form. 

Kxo"vr  ALL  Men  by  these  Presents  : 

That  ,  a  corporation  incorporated  and  organized  under  the  laws 

of  the  State  of  West  Virginia,  and  in  conformity  tlierewith,  liatli  made,  constituted, 
and  appointed,  and  by  tiiese  presents  doth  make,  constitute,  and  appoint  , 

of  ,  in  the'County  of  ,  State  of  ,  its  true;  and  lawful 

attorney,  for  it  and  in  its  name,  i)lace,  and  stead  to  accept  service  on  behalf  of  said 
corporation,  and  upon  whom  service  may  be  had  of  any  process  or  notice,  and  make 
such  return  for  and  on  behalf  of  sucli  corporation  of  its  property  for  taxation  to  the 
assessor  of  the  county  or  district  wherein  its  business  is  carried  on  as  is  required  by 
tlie  forty-first  section  of  the  twenty-ninth  chapter  of  the  Code  of  West  Virginia,  and 
to  list  the  property  of  said  corporation  for  taxation  in  any  other  manner  required  by 
the  laws  of  said  State,  giving  the  said  attorney  full  power  to  do  everything  whatso- 
ever requisite  and  necessary  to  be  done  in  tiie  premises  as  fully  as  such  corporation 
could  do  itself,  and  hereby  ratifying  and  confirming  all  that  the  said  attorney  shall 
lawfully  do  or  cause  to  be  done  by  virtue  hereof. 

[>i  JFitiiess  Whereof,  the  said  hath  signed  these  presents  by  its 

President  and  caused  the  corporate  seal  of  said  corporation  to  be  hereunto  affixed, 
this  day  of  ,  190  . 

(seal  of 

corporation.)  

By  ,  President. 

State  of  , 

County  of  ,  to  wit : 

I,  ,  a  Notary  Public  in  and  for  the  County  and  State  aforesaid,  do 

certify  that  personally  appeared  before  me  in  my  said  county,  and 


being  by  me  duly  swoni,  did  depose  and  say  that  he  is  the  President  of  the  Cor- 
poration described  in  writing  above,  bearing  date  the  day  of  '  ??^  ' 
autliorized  by  said  Corporation  to  execute  and  acknowledge  deeds  and  other  writings 
of  said  Corporation,  and  that  the  seal  affixed  to  said  writing  is  the  corporate  seal  of 
said  Corporation,  and  that  said  writing  was  signed  and  sealed  by  him,  in  beiialf  of 
said  Corporation,  by  its  authority  duly  given.  And  the  said  acknowl- 
edged the  said  writing  to  be  the  act  and  deed  of  said  Corporation. 

Given  under  my  hand  and  official  seal,  this  day  of  ,  190  . 

,  Notary  Public. 
(seal.) 


State  of  West  Virginia,  K^^j^^ 
County  ot  ,  > 


I,  ,  Clerk  of  the  County  Court  of  said  County,  do  hereby  certify  that 

the  foregoing  Power  of  Attorney  was  this  day  presented  to  me  inniy  said  office, 
and  together  with  the  certificate  thereunto  annexed  was  duly  admitted  to  record 
therein. 

Given  under  my  hand,  this  day  of  ,  190  . 

Clerk  of  said  County  Court. 

530 


FORMS   AND   PRECEDENTS. 

CERTIFICATE  OF  FOREIGN  CORPORATION. 
NAMING  AN  AGENT  UPON   WHOM   SUMMONS  MAY  BE  SERVED. 

Kxow  ALL  Men  by  these  Presents  : 

That  the  ,  a  corporation  duly  organized,  created,  and  existing  under 

and  by  virtue  of  the  laws  of  the  State  of  ,  and  having  its  princiixd  office 

or  pUice  of  business  in  the  City  of  ,  in  said  State,  does  hereby  designate 

and  appoint  ,  residing  in  the  City  of  ,  in  the  State  of  , 

he  being  a  citizen  of  said  State,  as  its  agent  for  the  -'lid  State  of  ,  upon 

whom  service  of  summons  and  all  other  legal  process  may  be  had  and  made  in  all 
actions  or  proceedings  against  said  Corporation  m  any  of  the  courts  of  said  Slate  of 
,  according  to  the  statutes  in  such  case  made  and  provided. 

The  said  Corporation  hereby  designates  the  City  of  ,  in  the  said  State 

of  ,  as  its  principal  place  of  business  in  said  State. 

Li  Testimony  Whereof,  the  said  Corporation  has,  by  its  President,  caused  these 
presents  to  be  signed  and  sealed  with  its  corporate  seal  at  the  City  of  ,  iu 

the  State  of  ,  on  this  day  of  ,  190  .  , 

By 


President. 


(Corporation  Acknowledgment.) 


FORM   OF  TRUST   DEED  TO    BE  EXECUTED   BY  A  CORPORATION 
IN  CONNECTION   WITH  A  BOND   ISSUE. 

This  Indenture  made  this  day  of  ,  190  ,  by  and  between 

the  Company,    a    stock   corporation   duly   organized   and   existing 

under  the  laws  of  the  State  of  ,  party  of  the  lirst  part  hereinafter 

called  the  Company  and  the  Trust  Company,  a  cori)oration  organ- 

ized and  existing  ilnder  the  laws  of  tlie  State  of  ,  as  Trustee  for  the 

purposes  hereinafter  set  forth,  party  of  the  second  part: 

Ifitnesseth,  Whereas,  the  said  p'^arty  of  the  first  part  is  a  corporation  duly  or- 
ganized and  existing  under  the  laws  of  the  State  of  ,  and  has  acquired 
several  plants  and  projjerties  hereinafter  described,  and 

Whereas,  tlie  Company  in  the  exercise  of  the  nowers  in  that  behalf  possessed 
by  it  and  in  accordance  with  the  resolutions  duly  adopted  by  its  Board  of  Directors 
and  by  its  stockholders  at  a  meeting  duly  and  regularly  called  and  hekl,  has  deter- 
mined to  make  and  issue  its  coupon  bonds  in  tlie  aggregate  amount  of 
dollars  (S  )  payable  in  gold  coin  of  the  United  Stales  of  the  present  standard 

of  weight  and  fineness,  said  bonds  to  be  coupon  bonds  of  the  par  value  of 
dollars  (-S  )  each,  each  of  which  bonds  is  to  bear  a  distiiielive  number, 

running   consecutively  from   one  (1)  to  hundred  (  )  and    Ix-aring   in- 

terest at  the  rate  of  per  cent  iier  annum  from  the  first  day  of 

190  ,  payable  semi-annually  in  like  gold  coin  on  the  first  day  of  and 

in  each  year,  and 

Whereas,  the  said  party  of  the  first  part  under  and  pursuant  to  the  power  and 
authority  aforesaid  has  determined  to  secure  the  nromiit  payment  of  the  principal 
and  interest  of  all  of  said  bonds  by  exreuting  and  delivering  to  the  Truste<'  a  mort- 
gage or  deed  of  trust  in  the  terms'of  this  indenture,  roiiveyiuK  I  lie  plants  and  prop- 
erties hereinafter  described  and  set  forth,  and  to  that  end  a  mortifage  or  deed  of 
trust  securing  said  bunds  in  the  form  of  this  indenture  wa.s  submitted  to  and  ap- 
proved by  the  Hoard  of  Directors  nnd  by  the  holders  of  the  entire  ranital  stock  of 
the  said  Companv,  at  a  meetiiiK  of  said  direnlors  and  of  said  si ock Ik ilders  respec- 
tively, dulv.  and' regularly  ealled  and  liehl  for  said  pur|M)»e8,  nnd  the  Presich'iil  «ir 
Vice-President  and  the  Secretary  or  Assistant  SecreUry  nf  the  Com|)Hiiy  were  duly 
authorized  at  said  meetinf,'  on  behalf  of  said  Company  as  its  art  nnd  deed  and  under 
its  corporate  seal  to  execute  and  deliver  the  same  t*j  the  Trustee ;  nnd 

5:U 


INCORPORATION    AND   ORGANIZATION   OF   CORPORATIONS. 

H7i('rras,  tlie  form  of  bonds  and  the  cou)ions  to  be  attaclicd  thcM-cto,  niul  of 
the  cortitioatc  to  hv  siirned  l)y  t!io  Trnstoo  for  the  autlienticatiou  of  said  bonds  were 
at  said  nioetini;  severally  and  respeetivclv  snbniitied  and  approved  by  said  resoln- 
tions  of  tlie  lioard  of  Directors  and  of  all  the  stockholders  of  the  Coinpauy,  and  are 
substantially  of  the  following  tenor,  to  wit : 

(FORM   OF  BOND.) 
United  States  of  America. 

No.  $ 

Company. 

First  Mortgage  per  cent  Sinking  Fund  Gold  Coupon  Bonds. 

Know  all  Men  by  these  Presents  :  That  the  Company 

(a  corporation  organized  and  existing  under  the  laws  of  the  State  of  ) 

is  indei)ted  and  for  value  received,  hereby  promises  to  pay  to  the  bearer  or 
liohler  hereof,  at  its  agency  or  office  in  the  City  of  New  York,  dollars 

($  ),  in  gold  coin  of  the  United  States  of  the  i)resent  standard  of  weight  and 

fiueness  on  the  day  of  ,  190    (unless  before  that  tin)e  this  bond 

shall  have  been  retired)  with  interest  thereon  from  ,  190  ,  until  the  pay- 

ment or  redemption  of  this  bond,  at  the  rate  of  per  cent  per  annum,  pay- 

able semi-annually,  at  said  office  in  like  gold  coin  on  the  first  day  of  and 

the  first  day  of  of  each  year  thereafter  npon  presentation  and  surrender  of 

the  annexed  coupons  therefor  as  they  respectively  mature.  Both  the  princi|)al  and 
interest  of  this  bond  are  payable  without  reduction  for  any  tax  or  taxes  which  the 
Company  may  be  required  to  pay  thereon  or  to  retain  therefrom 
under  or  by  reason  of  any  present  or  future  law  of  the  United  States  or  of  any 
State,  county,  or  municipality  therein. 

This  bond  is  one  of  a  series  of  coupon  bonds  of  the  Company, 

known  as  its  First  Mortgage  per  cent  Sinking  Fund  Gold  Coupon  Bonds 

issued  or  to  be  issued  to  an  amount  not  to  exceed  in  the  aggregate  the  })rincipal 
sum  of  dollars  ($  ),  all  of  which  said  bonds  are  issued  or  to  be 

issued  under  and  secured  by  a  mortgage  or  deed  of  trust  dated  1,  190  , 

executed  by  the  Company  to  the  Trust   Company 

(of  the  City  of  ,  )  as  Trustee,  to  which  mortgage  or  deed  of 

trust  reference  is  here  made  for  a  description  of  the  property  so  deeded  or  mort- 
gaged, tlie  nature  and  extent  of  the  security,  the  rights  of  holders  of  bonds  under 
tiie  same,  and  the  terms  and  conditions  upon  which  said  bonds  are  issued  and 
secured. 

This  bond  is  subject  to  redemption  on  the  day  of  ,  190  ,  and 

on  the  first  day  of  of  each  year  tiiereafter  until  its  maturity  at  par  with 

the  interest  then  accrued  thereon  under  the  operation  of  a  sinking  fund  which  per- 
mits the  Company  to  redeem  at  least  one-tenth  of  the  entire  issue  of  said  bonds 
annually,  and  is  subject  to  redemption  on  the  terms  and  in  the  manner  provided  in 
said  deed  of  trust. 

This  bond  shall  y)ass  by  delivery.  This  bond  shall  not  be  issued  or  become 
obhgatory  for  any  purjxise  until  it  shall  have  been  authenticated  by  the  certificate 
hereon  endorsed  of  said  Trustee  under  said  mortgage  or  deed  of  trust. 

This  bond  may  be  registered  in  the  owner's  name  on  the  Company's  books  in 
the  City  of  ,  ,  or  at  any  other  place  which  the  Com])any  may 

determine,  such  registry  being  noted  on  the  bond  by  the  Company's  transfer  agent, 
after  M-liich  no  transfer  shall  be  valid  unless  made  on  the  Company's  books  by  the 
registered  owner  and  similarly  endorsed  on  the  bond,  but  the  same  may  be  dis- 
charged from  registry  by  being  transferred  to  bearer  attiir  which  it  shall  be  trans- 
ferable by  delivery,  but  it  may  again  be  registered  as  before. 

Registry  of  this  bond  as  above  shall  not  restrain  the  negotiability  of  the  coupons 
by  delivery  merely,  but  the  coupons  may  be  surrendered  and  the  interest  made 

532 


FORMS    AND    PRECEDENTS. 

payable  oulj  to  the  registered  owner  of  tlie  boud.  such  surrcuder  to  be  certified  as 
follows : 

"This  is  to  certify  that  the  coupons  represeutiug  the  several  instalments  of 
interest   to   become   due  on  the  witliin  bonds  have  been  surrendered  to  the 
Company  and  cancelled,  and  interest  on  tiiis  bond  when  here- 
after due  will  be  payable  to  the  registered  owner  hereof,  as  certified  hereon,  or 
to  his  order. 
Dated 

,  Transfer  Agent." 

In  Witness  Whereof,  the  Company  lias  caused  this  instrument 

to  be  signed  by  its  President,  and  its  corporate  seal  to  be  hereunto  affixed  and  to 
be  attested  by  its  Secretary,  and  coupons  for  said  interest  with  the  engraved  signa- 
ture of  its  Treasurer,  to  be  attached  thereto  this  first  day  of  ,  190 

CoilPAXY, 

By  ,  President. 

Attest :  ,  Secretary. 

Trustee's  Certificate. 

This  is  to  certify  that  this  bond  is  one  of  the  bonds  described  in  the  above 
mentioned  indenture  of  mortgage  or  deed  of  trust  dated  1,  190 

Trust  Company,  Trustee, 
By  ,  Trust  Officer. 


FORM  OF  COUPON. 

On  the  first  day  of  ,  190  ,  the  Company  will  pay  the 

bearer  at  its  office  in  the  City  of  ,  dollars  (.^         )  in' gold 

coin,  free  from  all  taxes,  being  six  months'  interest  then  due  on  its  First  Mortgage 
per  cent  Sinking  Fund  Gold  Coupon  Bonds  No. 

,  Treasurer. 
and 

Whereas,  in  pursuance  of  the  resolution  of  the  Board  of  Directors  and  also  of 
the  holders  of  the  capital  stock  of  the  Company  duly  adopted  at  a  meeting  of  said 
Board  of  Directors,  and  of  the  stockholders,  separately  and  severally  called  and 
held,  and  in  pursuance  of  all  and  every  legal  power  and  authority  in  it  vested, 
the  Company  pro|)oses  to  make  and  execute  and  from  time  to  time  hereafter  issue 
and  deliver  bonds  secured  as  hereinabove  and  hereinafter  more  particularly  set 
forth: 

No'o  this  Indenture  Witnesseth  :  That  to  secure  the  ])ayment  of  the  prineipal 
and  interest  of  such  bonds  as  may  at  any  time  be  issued  and  outstanding  under 
this  indenture,  according  to  their  tenor  and  ellect,  and  to  declare  the  terms  and 
conditions  u[)on  which  said  l)onds  are  to  be  so  issued,  the  Company,  jiarty  of  the 
first  part,  in  consideration  of  the  premises  and  of  the  purchase  and  acecjitanee  of 
such  Ijonds  by  the  holders  thereof,  and  of  the  .sum  of  one;  dollar  (SI. 00)  lawful 
money  of  the  United  Statr-s  of  America  to  it  didy  paid  by  the  Trustee  at  av  iu'lorc 
the  ensealing  and  di-livery  of  these  presents,  the  receijit  whereof  is  henby  acknowl- 
edged, has  executeil  and  delivered  these  presenl.s,  and  has  granted,  bargaincMi,  sold, 
alicnc.l,  remisf;(l,  released,  conveyed,  confirmed,  a.ssigned,  Irnnsferred,  ph-dged,  and 
set  over,  and  by  these  presents  do'-s  grant,  bargain,  .sell,  alien,  remise,  release,  con- 
vey, confirm,  assign,  transfer,  pledge,  and  set  fiver  upon  the  party  of  the  seeond 
|)art,  and  to  its  successor  or  suceessors  in  the  trust  hereby  created,  all  nnd  singular 
the  following  real  estate,  plants,  factories,  goods,  elialt-<ls,  mnchinery.  rights,  jirivi- 
leges,  franchises,  and  other  property,  to  wit  : 

The  plant  and  property  now  belonging  to  the  Company,  situated  in  the  County 
of  ,  and  State  of  ,  and  more  i)arlicularly  deseriijcd  as  fol- 

lows, to  wit: 


INCOUPOUATION    AND    ORCANTZATION    OF    CORPORATIONS. 

Together  witli  tlio  buildings  and  strnoturcs,  erections  and  ennstructions  no'w 
or  horoaltcr  ])laofd  tlicreon,  and  in  addition  tliercto  all  niacliincry,  lixlurcs,  appli- 
ances, implenionts,  and  a|)pnrtenances  of  every  kind  and  cliaractcr  wliicli  arc  now 
or  may  he  hereafter  at  any  time  situated  lying  and  being  in,  on,  or  about  the  said 
plants,  premises,  and  property  described  herein,  and  used  or  provided  for  use  in 
and  about  tlie  operation  of  said  })lants  and  property,  and  the  carrying  on  of  the 
business  of  the  Company  in  the  same,  wliethcr  the  same  arc  now  owned  by  the  said 
party  of  the  lirst  ])art,  or  shall  hereafter  be  acquired  by  it,  it  being  the  intention 
hereof  that  said  ])lants,  ]i remises,  and  property  shall  be  and  arc  hereby  conveyed 
as  an  active-going,  operating  plant. 

To  Race  and  to  Hold  the  said  above  described  premises,  property,  rights, 
franchises,  and  appurtenances,  \into  the  said  party  of  the  second  part  and  its  lawful 
successors  or  assigns  forever. 

But  in  Trust  Nevertheless,  for  the  benefit,  security,  and  protection  of  the  per- 
sons and  corporations,  firms  and  partnerships,  who  may  be  or  become  holders  of 
the  aforesaid  bonds  and  interest  cou])ons,  or  any  or  cither  of  them,  and  for  enforc- 
ing the  payment  thereof  when  payable,  according  to  the  true  intent  and  meaning 
of  the  stipulation  of  this  mortgage  or  deed  of  trust  and  of  said  bonds  and  of  said 
interest  coupons,  and  without  ])reference,  priority,  or  distinction  as  to  lien  or  other- 
wise of  any  of  said  bonds  over  any  of  the  others  by  reason  of  ]n-iority  in  the  time 
of  the  issue  of  negotiation  thereof  or  otherwise,  provided,  however,  and  these 
presents  are  upon  the  express  condition  that  if  the  party  of  the  first  jiart,  its  suc- 
cessors or  assigns,  shall  well  and  truly  pay  or  cause  to  be  paid  unto  the  iiolders  of 
the  bonds  to  be  issued  hereunder,  the  principal  and  interest  to  become  due  thereon, 
to  said  holders  at  the  time  and  in  the  manner  stipulated  in  said  bonds  and  in  said 
interest  coupons  according  to  the  true  intent  and  meaning  thereof,  and  shall  well 
and  truly  keep,  observe,  and  perform  all  and  singular  the  covenants,  ])romises,  and 
conditions  in  the  said  bonds  hereby  secured  and  in  this  indenture  expressed  to  be 
kept,  observed,  and  performed  by  or  on  the  part  of  said  party  thereby  granted, 
shall  cease,  determine,  and  be  void,  otherwise  to  remain  in  full  force.  And  it  is 
expressly  covenanted  and  agreed  by  and  between  the  parties  hereto  that  the  specific 
trusts,  uses,  and  i)ur]ioses,  conditions  and  covenants  upon  which  said  property  and 
franchises  hereby  mortgaged  and  conveyed  are  to  be  held  by  the  Trustee  and  sub- 
ject to  which  the  said  bonds  secured  hereby  are  to  be  issued  and  to  be  held  by  each 
and  every  holder  thereof,  are  as  follows,  that  is  to  say : 

First.  This  mortgage  or  deed  of  trust  is  to  be  a  continuing  lien  to  secure  the 
full  and  final  payment  of  the  principal  and  interest  of  all  bonds  which  may  be  from 
time  to  time  issued  and  negotiated  under  the  same,  but  so  that  the  total  aggregate 
amount  of  said  bonds  so  issued  and  negotiated  shall  not  exceed  dollars 

(S  ),  and  to  be  issued  u])on  the  terms  and  of  the  denominations,  and  to 

mature  and  become  payable  in  tiie  manner  and  at  the  place  and  time  or  times 
hereinbefore  stated,  with  interest  payable  as  so  stated. 

Second.  The  coupon  bonds  intended  to  be  secured  hereby  shall  from  time  to 
time  be  executed  by  the  Company  and  delivered  to  the  Trustee, 

'  and  the  Trustee  shall  authenticate  and  deliver  the  same  pursuant  to  any  directions 
that  may  be  contained  in  a  resolution  or  resolutions  of  the  Board  of  Directors  of 
the  Company,  a  certified  copy  of  which  shall  first  be  lodged  with 

the  Trustee,  and  the  Trustee  shall  not  be  under  any  duty  to  look  behind  the  same, 
and  shall  not  be  in  any  way  responsiljle  for  the  issue  and  negotiation  of  any  of  such 
bonds  or  the  application  of  tiieir  proceeds.  Only  such  of  said  bonds  as  shall  be  so 
authenticated  by  the  Trustee  by  signing  the  certificate  endorsed  thereon,  shall  be 
secured  by  this  mortgage  or  deed  of  trust,  or  be  entitled  to  any  lien  or  benefit  here- 
under, and  such  certificate  of  the  Trustee  shall  be  conclusive  evidence  that  the 
bond  so  certified  has  been  duly  issued  hereunder  and  is  entitled  to  the  benefit  of  the 
trust  hereby  created. 

Third.    The  Company  covenants  and  agrees  that  it  will  fully 

and  entirely  pay  off  and  satisfy  the  whole  of  tlie  said  bonds  to  be  issued  lu^reunder, 
principal  and  interest,  according  to  the  terms  hereof,  without  delay  and  without  de- 
duction from  either  said  principal  or  interest  for  any  assessments,  taxes,  govern- 
534 


FORMS   AND   PRECEDENTS. 

nieutal  aud  other  charges  now  or  hereafter  imposed  upou  said  bonds  or  auy  interest 
thereon,  either  by  the  United  States  or  by  any  State,  country,  or  municipal  author- 
ity which  tlie  Company  may  be  required  to  deduct  tlicrcfrom. 

Fourth.  Until  default  shall  be  made  in  the  payment  of  the  principal  or  interest 
of  any  of  the  bonds  hereby  secured  or  any  part  thereof,  as  and  when  the  same  shall 
become  due  and  payable,  or  in  the  performance  or  observance  of  auy  condition, 
covenant,  or  requirement  of  said  bunds  or  of  this  mortgage  or  deed  of  trust,  the 
Trustee  shall  permit  and   suffer  the  Company,  its  successors  aud 

assigns,  to  possess,  operate,  aud  enjoy  the  real  and  personal  properly  hereby  mort- 
gaged with  the  appurtenances  thereto  belonging,  in  any  manner  not  inconsistent 
with  tliese  presents,  aud  to  receive  aud  use  the  total  incomes,  rents,  issues,  aud 
inufits  thereof. 

Fifth.  "When  and  as  the  interest  coupons  attached  to  the  bonds  hereby  secured 
mature  and  are  paid  by  the  Company  or  by  any  person  or  corpora- 

tion for  it  or  on  its  behalf,  they  shall  be  cancelled.  All  coupons  maturing  before 
the  delivery  of  the  bonds  by  the  party  of  the  second  part  shall  be  cut  oii"  aud  can- 
celled by  tile  party  of  the  second  part  before  delivery  of  such  lionds. 

Upon  the  payment  at  maturity  or  retiracy  prior  to  the  maturity  by  the  payment 
of  auy  bonds  hereinbefore  provided  for,  the  same  shall  be  cancelled  and  delivered 
forthwith  to  the  Trustees. 

Sixth.    The  Company  covenants  and  agrees  that  it  shall  aud 

will  from  time  to  time  pay  and  discharge  before  the  same  shall  fall  into  arrears,  all 
taxes,  water  rates,  assessments,  and  governmental  charges  lawfully  imposed  upon 
the  franchises  and  lands  and  otiier  hereby  mortgaged  premises,  or  any  ])art  thereof, 
the  lien  of  which  might  or  could  be  held  to  be  superior  to  the  lien  hereof,  and  will 
pay  and  discliarge  all  claims  of  every  kind  and  nature  which  may  hereafter  become 
a  lien  upon  the  hereby  mortgaged  premises  or  any  part  thereof,  prior  to  the  lien 
hereof,  so  that  the  priority  of  this  mortgage  may  be  duly  preserved  and  will  keep 
said  mortgaged  premises  or  any  part  thereof  in  good  order  and  repair,  and  shall  not 
or  will  not  create  or  suffer  to  be  created  any  mechanic's,  laborer's,  or  other  lien  or 
charge  whatsoever  upon  the  mortgaged  premises  or  any  part  thereof  which  might 
or  could  be  impaired  prior  to  the  lien  of  these  presents  until  the  bonds  hereby 
secured  with  all  interest  accrued  tliercon  shall  be  fully  paid  and  satisfied. 

Seventh.    The  Company  covenants  and  agrees  that  it  shall  and 

will  at  all  times,  until  said  bonds  hereby  secured  with  all  interest  accrued  thereon 
shall  be  fully  paid  and  satisfied,  keep' such  parts  of  said  mortgaged  premises  or 
property  as  are  liable  to  be  destroyed  or  injured  by  fire,  insured  against  loss  by 
fire  in  some  solvent  insurance  company  or  companies  authorized  to  transact  busi- 
ness in  the  State  of  and  approved  by  the  Trustee,  to  an  amount  equal  to 
the  insurable  value  of  said  property  payable  in  case  of  loss  to  the  Trustee;  and  all 
moneys  collected  from  such  insurance  shall  be  held  by  the  Trustee  for  the  further 
security  of  the  bondh-ilders  hereunder  until  the  Company  shall, 
after  the  fire,  have  applied  an  equal  sum  of  money  to  the  reconstruction  or  repair  of 
the  part  of  the  pn-inises  destroyed  or  injured,  or  to  the  crertion  of  other  permanent 
improvements  upon  such  mortgaged  nrcmiscs  wiu-reupon  from  sucii  insurance 
moneys  held  b^y  flic  Trustee  there  shall  be  jtaid  to  the  said  Company, 
from  time  to  time,  an  amount  equal  to  the  amount  so  ap|)licd  liy  it  nffir  the  tire  to 
such  reconstruction,  repair,  or  erection. 

A  resolution  of  the  IJoard  of  Directors  of  the  Company,  sfatiiig 

the  amount  apjilied  by  it  to  the  reconstruction  or  repair  of  the  premises  so  (it- 
stroyed  or  injured,  or  to  the  erection  of  other  permanent  improvements  upon  such 
moi^tgaged  premises,  U)getlier  willi  an  afTidavit  of  the  President,  Viee-lVesident, 
Secretary,  or  Treasurer  of  the  Company  that  such  sum  of  money  has 

been  .so  applied,  .shall  be  full  and  complete  authority  and  protection  to  the  Trustee 
for  the  payment  to  the  Conqjany,  or  upon  its  ordrr.  of  the  nmoiint  slated 

in  such  resolution  and  alRdavit,  and  flu;  Trustee  shall  be  under  no  duty  or  olilign- 
tion  to  look  behind  such  resolution  and  airnlavit,  and  shall  not  Im  ui  any  wise  re- 
sponsible for  the  an|)lieation  of  any  moneys  so  paid  over  by  it 

Eighth.    It  is  further  covciiauicd  aud  agreed  tlial  the  said  Com- 

535 


INCORrORATION    AND    ORGANIZATION  OF   CORPORATIONS. 

pany  shall  well  ami  truly  pay  or  cause  to  be  paid  all  prior  liens  ami  indebtedness 
of  whatsoever  nature  and  description  tiiat  now  exist  against  the  pro])erly  covered 
by  this  mortgage  or  deed  oi"  trust  prior  to  tlie  maturity  of  the  prineii)al  sum  due  on 
said  bonds,  and  the  said  Company  does  lierel)y  agree  to  jirocure  a  release 

tliereot'  from  the  holders  of  said  lien  or  said  indcl)ledn('ss,  but  no  duty  to  sec  to 
such  payment  or  the  procuring  of  such  release  is  iiereby  imposed  on  the  Trustee. 

Niiifh.  The  Company  shall  and  will  from  time  to  time  during  the  continu- 
ance of  this  trust  and  mortgage  make,  execute,  and  deliver  all  sueli  I'urtlier  instru- 
ments and  conveyances  as  may  be  necessary  to  vest  in  said  Trustee  and  its 
successors  the  within  described  and  all  subsetiuently  acquired  property  and  rights 
of  property  to  facilitate  the  execution  of  said  trust. 

Tenth.  It  is  further  covenanted  and  agreed  that  the  ])crsonal  i^roperty  hennn- 
bcforc  described  and  hereby  conveyed,  or  intended  so  to  be,  shall  be  held  and  be 
taken  to  be  iixtures  and  ap])urtenances  of  the  premises,  and  as  part  thereof,  and  are 
to  be  used  and  sold  therewith  and  not  separate,  except  as  herein  expressly 
provided. 

Eleventh.  The  Company  shall  be  permitted,  without  reference  to  the  Trustee, 
to  alter,  remove,  sell,  or  dispose  of  any  buildings,  fixtures,  machinery,  or  other 
personal  property  herein  described  as  covered  by  or  located  upon  the  mortgaged 
premises  hereinafter  described  which  cannot  be  advantageously  used  in  the  judicious 
operation  and  management  of  the  business  of  said  Company,  provided  always  tliat 
said  Company  sliall  and  it  hereby  agrees  in  such  case  that  it  will  replace  any 
buildings,  fixtures,  machinery,  or  other  personal  property  so  altered,  removed, 
sold,  or  disposed  of  by  acquiring  subject  to  this  mortgage,  other  buildings,  fixtures, 
macliinery,  or  other  personal  property  equal  in  value  to  the  property  so  altered, 
removed,  sold,  or  disposed  of,  the  same  being  erected  at  the  option  of  said  Com- 
pany ujwn  real  estate  that  may  now  or  hereafter  be  owned,  leased,  or  otherwise 
acquired  by  said  Company,  or  which  may  hereafter  be  owned,  leased,  or  otherwise 
acquired  by  said  Company,  or  in  lieu  of  the  foregoing  the  said  Company  shall  be 
permitted,  without  reference  to  the  Trustee,  to  alter,  remove,  sell,  or  dispose  of  any 
Duildings,  fixtures,  machinery,  or  other  personal  property  erected  upon  the  mort- 
gaged premises  above  described  which  cannot  be  advantageously  used  in  the  judi- 
cious operation  and  management  of  the  business  of  said  Company  by  paying  to 
said  Trustee  the  ajipraised  value  of  such  property,  and  any  such  sums  so  received 
by  said  Trustee  shall  upon  request  of  said  Company  be  invested  in  bonds  secured 
by  this  mortgage,  or  in  bonds,  mortgages,  or  secuiities  authorized  by  law  for 
the  investment  of  funds  of  savings  banks  in  the  City  of  New  York,  which  bonds, 
mortgages,  or  securities  shall  be  held  for  further  security  of  the  bonds  secured 
by  this  mortgage;  but  until  default  in  the  payment  of  the  principal  or  interest 
of  the  bond  secured  hereby  or  some  part  thereof,  the  interest  and  income  of  said 
bonds,  mortgages,  or  securities  shall  be  paid  to  the  Company.  No  duty  or  re- 
sponsibility is  imposed  upon  the  Trustee  by  the  provisions  of  this  article,  except 
to  receive  such  funds  as  may  be  paid  to  it  by  the  Company,  and  invest  the  same  as 
herein  provided. 

Twlfth.  For  the  purpose  of  providing  against  any  depreciation  of  tiie  security 
reserved  herein  by  reason  of  any  cause,  and  for  tiie  further  purpose  of  providing  the 
necessary  funds  with  which  to  make  payments  of  said  bonds  eitlier  as  they  mature 
or  as  they  may  be  retired  under  the  conditions  herein  set  forth,  said  Company  shall 
set  aside  and  reserve  from  and  after  the  first  day  of  ,  from  its  earnings, 

an  amount  equal  in  value  to  one-tenth  in  amount  of  the  principal  due  upon  all 
bonds  issued  and  outstanding  on  that  dav,  and  sliall  set  aside  and  reserve  for  the 
same  purpose  after  the  first  day  of  '       ,  I'JO  ,  190  ,  190  ,  190  ,  190  ,  19     , 

19  ,19  ,19  ,  a  similar  proportion  of  the  principal  due  upon  all  bonds  out- 
standing on  those  days  respectively,  such  reservation  to  be  for  the  purpose  of  j)ro- 
viding  a  sinking  fund  under  the  conditions  hereinafter  set  forth. 

On  or  before  the  first  day  of  of   (;ach  year,  commencing  in  190  , 

while   the  lien  of  these   presents  shall   continue,  the  Company  shall  pay  over  to 

the  Trustee  all  moneys  reserved  as  aforesaid  for  the  purpose  of  a  sinking  fund. 

Immediately  upon  receipt  of  monevs  by  the  said  Trustee  from  said  Company  for  the 

536 


FORMS   AND   PRECEDENTS. 

sinking  fund  as  provided  Lerein,  tlie  Trustee  shall  forthwitli  on  receipt  of  said 
monevs  draw  by  lot  from  the  entire  number  of  bonds  ■wliicli  shall  be  outstanding  on 
the  first  day  of  ,  190  ,  and  in  each  year  thereafter  until  the  year 

19  ,  such  a  number  of  bonds  for  redemption  as  it  shall  have  funds  to  redeem  at 
par,  the  same  not  to  exceed  in  any  case  the  sum  of  oue-tenth  of  the  amount  of 
bonds  outstanding  on  the  day  when  such  payment  to  the  Trustee  becomes  due  and 
payable,  and  the  holders  of  said  bonds  so  drawn  sliall  be  forthwith  notified  by  tiie 
Company  in  writing  that  tiieir  bonds  will  be  redeemed  at  par  with  accrued  interest 
thereon  to  the  first  day  of  September  of  the  year  in  which  the  said  redemption 
occurs,  and  such  bonds  shall  thereupon  cease  to  draw  interest  from  the  date  fixed 
for  redemption,  and  shall  be  redeemed  by  the  said  Trustee  on  and  after  tliat  day 
and  at  tiie  price  aforesaid  out  of  the  money  placed  iu  its  hands  ou  account  of  said 
sinking  fund. 

All  bonds  which  shall  have  been  from  time  to  time  purchased  or  redeemed 

througli  the  sinking  fund  hereby  created  shall  be  forthwith  destroyed  by  the  said 

Trustee  in  the  presence  of  some  officer  or  other  person  to  be  designated  by  said 

Company,  who  shall  certify  to  said  Company  iu  writing  the  fact 

of  said  destruction  and  the  number  of  bonds  so  destroyed. 

T/drtfenth.  These  presents  and  the  trust  conditions  and  powers  hereby  imposed 
or  granted  may  be  altered,  curtailed,  eidarged,  or  added  to  in  any  manner  that  shall 
be  agreed  upon  between  the  said  Company  and  the  said  Trustee  provided  that  such 
alterations,  curtailments,  enlargements,  or  conditions  shall  have  been  first  approved 
by  the  holders  of  two-thirds  in  amount  of  all  of  the  then  outstanding  bonds  secured 
Ijy  these  presents  at  a  meeting  of  the  mortgaged  bondholders  to  be  summoned  by 
said  Trustee  at  the  request  of  the  Board  of  Directors  of  said  Company  and  upon 
two  weeks'  written  notice  of  the  time  and  place  and  purpose  of  said  meeting  to 
be  sent  by  mail  to  all  of  the  said  bondholders  whose  places  of  residence  can  be 
ascertained. 

The  approval  by  the  requisite  number  of  bondholders  of  such  alterations,  curtail- 
ments, enlargements,  or  additions  siiall  be  evidenced  by  some  instrument  in  writing 
duly  executed  by  them  under  their  hands  and  seals  iu  person  or  by  attorney  duly 
authorized,  which  instrument  shall  be  lodged  with  the  said  Trustee  as  its  authority 
for  assenting  thereto. 

The  alterations,  curtailments,  enlargements,  or  additions,  when  so  approved, 
shall  be  embodied  in  an  indenture  under  seal  duly  executed  by  and  bctwet-n  the 
said  Company  and  the  said  Trustee  in  sucli  manner  as  to  entitle  the  same  to  be  re- 
corded in  County,  in  the  Stale  of  .  When  said  indenture  shall 
have  been  so  executed  and  delivered  t(j  the  said  Trustee,  these  presents  shall  forth- 
with be  deen\ed  to  have  been  altered,  curtailed,  enlarged,  or  added  to,  in  accord- 
ance therewith,  and  the  Trustee  shall  cause  said  indenture  to  be  recorded  in  said 
County,  but  tiie  said  Trustee  shall  have  the  power  to  refuse  to  agree  to  such  altera- 
tions, curt^iilnients,  enlargements,  or  additions,  in  case  it  shall  think  that  the  same 
shall  unreasonably  impair  or  prejudice  the  rights  of  the  bondholders  who  do  not 
assent  thereto. 

Fourtnrnlh.  In  case  default  shall  he  made  in  the  payment  of  any  interest  on 
any  of  said  bonds  secured  hereby,  as  and  when  such  interest  .shall  bcc(jmc  due,  and 
if  default  shall  continue  fur  one;  month,  r)r  in  case  default  shall  be  made  in  the  |)ay- 
mcnl  of  the  principal  of  any  of  liie  said  bonds  when  the  same  shall  become  due  or 
otherwise  become  payable,  then,  and  in  every  such  case  the  Trustee  may  at  its 
option  and  in  its  discrelion  witli  or  williout  entry  sell  nil  the  premises,  eslaU-,  prop- 
erty, rights,  and  franchises  lierel)y  conveyed,  or  so  intended  to  l)c  at  jtublic  auction 
at  the  f7ont  door  of  the  C'ourt  House  or  IjIImt  »uilal)le  jilnec  in  the  City  of 
State  of  ,  after  giving  nr)lire  of  sneh  side  ns  required  l)y  the  sinlutes  of  the 

Stale  of  in  such  case  made  and  orovided.  and  from  time  to  lime  to  adionrn 

such  sale  or  sales,  in  its  discretion  and  wilhoul  further  notice  to  hold  sueli  ad- 
journed sale  or  sales  hereunder,  to  make  and  deliver  to  the  purciinscr  and  piirehnscrs 
of  the  pn-mises,  estate,  iirojierty,  rights,  and  franehises  so  sold  n  e«iod  niid  sulfieient 
deed  or  deeds  for  the  same,  which  sale  shall  be  a  perprlual  bar  Ix.lli  in  law  and  in 
equity  against  the  said  Company,  and  all  persons  nml  enrpora- 

537 


INCOUrOUATION    AND   ORGANIZATION    OF   CORPORATIONS. 

tions  lawfiillv  claimiiii;;  c^r  to  claim  ]\v,  ilirniifi;l»,  or  undor  it.  and  u]Mm  tlir  iiiakiiiff 
of  said  sale  tlir  priiicijial  of  all  tiu-  bonds  liorcby  secured  and  tlien  oiitstaiuliiii^  ^liall 
fortliwitli  heconic  due  and  payable,  auYtliing  in  said  bonds  to  the  contrary  not.vvitli- 
standiuij,  and  upon  the  niakin<T  of  any  such  sale  the  said  Trustee  shall  apply  the 
proceeds  tliercolas  follows,  to  wit:  — 

1st.  The  iiaynient  of  the  costs  and  expenses  of  such  sale  or  sales,  including  a 
reasonable  compensation  to  said  Trustee,  its  agents,  attorney,  and  counsel,  and  all 
expenses,  liabilities,  and  advances  made  and  incurred  by  said  Trustee  in  nianaf^ing 
and  maintaining  the  property  hereby  conveyed  or  intended  to  be  conveyed  and  all 
taxes  and  assessments  superior  to  the  lieu  of  these  presents. 

2ju1.  The  payment  of  the  whole  amount  of  principal  and  interest  which  shall 
then  be  owing  or  unpaid  upon  the  bonds  secured  luu-eby  without  preference  or 
priority  whatever,  whether  the  said  principal  by  the  tenor  of  said  bonds  be  then  due 
or  yet'  to  become  due,  and  in  case  of  the  insutliciency  of  such  proceeds  to  pay  iu 
full  the  whole  amount  of  such  principal  and  interest  owing  and  unpaid  upon  said 
bonds,  then  to  the  payment  of  such  principal  and  interest /iro  ra/a  without  prefer- 
ence or  priority,  but  ratably  to  the  aggregate  amount  of  such  principal  and  accrued 
and  unpaid  interest. 

3rd.  To  ])ay  over  the  surplus,  if  any,  to  whomsoever  may  be  lawfully  entitled 
to  receive  the  same. 

Fifteenth.  It  is  further  declared  and  agreed  that  the  receipt  of  the  Trustee 
who  shall  make  the  sale  hereinbefore  authorized  shall  be  a  sufficient  discharge  to  the 
purchaser  or  ])urehasers,  his  or  their  heirs,  or  assigns,  or  personal  representatives, 
and  such  purchaser  or  purchasers  shall  not,  after  paying  such  purchase  money  and 
receivuig  such  receipt  of  the  Trustee  therefor,  be  obliged  to  see  to  the  application 
of  such  purchase  money  upon  or  for  the  trusts  or  purposes  of  these  presents,  or  to 
be  in  any  wise  answerable  for  any  loss,  misapi)lication,  or  non-ap])lication  of  such 
purchase  money  by  the  Trustee. 

Sixteenth.  In  case  default  shall  be  made  in  the  payment  of  the  principal  or 
interest  of  said  bonds,  when  same  shall  become  due  and  payable,  or  in  the  obser- 
vance or  performance  of  any  covenant  or  condition  in  said  bonds,  or  herein  con- 
tained on  the  ])art  of  the  party  of  the  first  part,  and  such  default  shall  continue  for 
six  months,  it  shall  be  the  duty  of,  and  it  is  hereby  made  obligatory  upon  the  Trustee, 
upon  the  request  in  writing  of  a  majority  in  interest  of  said  bonds  secured  and  then 
outstanding,  executed  and  acknowledged  by  the  holders  thereof,  or  their  attorneys 
thereunto  duly  authorized  in  writing,  and  upon  proper  indemnification  to  proceed 
forthwith  to  enforce  the  rights  of  said  Trustee  and  of  the  bondholders,  hereunder, 
by  sale  or  entry,  or  both,  according  to  such  requisition,  or  by  judicial  proccedmgs 
for  such  purpose,  as  the  Trustee,  being  advised  by  counsel,  learned  in  the  law, 
shall  deem  most  expedient  in  the  interest  of  the  holders  of  the  bonds  secured 
thereby ;  the  choice  between  such  remedies  being  left  to  the  discretion  of  the 
Trustee. 

Seventeenth.  The  several  remedies  granted  hereunder  shall  be  cumulative  and 
non-exclusive  one  of  the  other,  and  shall  be  in  addition  to  all  other  remedies  to  en- 
force the  lien  of  these  presents. 

Eitjhteenth.  Upon  the  filing  of  a  bill  in  equity  or  other  commencement  of 
judicial  proceedings  to  enforce  the  rights  of  the  Trustee  or  of  the  bondholders  under 
these  presents,  the  said  Trustee  shall  be  entitled,  as  a  matter  of  right,  to  the  appoint- 
ment of  a  receiver  or  receivers  of  the  property  hereby  mortgaged,  and  of  the  earn- 
ings, income,  rents,  issue,  and  profits  thereof,  pending  such  proceedings. 

Nineteenth.  Ui)on  payment,  w-hen  due,  of  both  principal  and  interest  of  all 
the  bonds  which  shall  have  been  issued  thereunder,  the  Trustee  shall,  upon  the 
•written   request   of  the  Company,   enter   satisfaction    of   this 

mortgage  ui)on  the  records,  and  shall  do,  make,  execute,  and  deliver  such  deeds, 
acts,  instruments,  or  assurances  as  may  be  necessary  to  vest  all  the  mortgaged  prem- 
ises and  property  of  the  said  Company,  its  successors,  and  assigns, 
free  and  discharged  from  the  lien  of  these  presents. 

Twentieth.  Upon  the  terms  and  conditions  stated  in  this  article,  and  not  other- 
wise, the  Trust  Company  hereby  accepts  the  trust  of  this  instrument, 
r,oo 


FORMS   AND   PRECEDENTS. 

and  the  Company  and  all  present  and  future  holders  of  bonds  and 

coupons  secured  hereby  expressly  assent  and  agree  to,  and  acknowledge  themselves 
bound  by,  said  terms  and  conditions.  The  Trustee  shall  not  be  answerable  to  any- 
body for  the  default  or  misconduct  of  any  agent  or  attorney  appointed  by  it  in  pur- 
suance hereof,  if  sucli  agent  or  attorney  shall  have  been  selected  with  reasonable 
care,  or  for  anything  whatever  in  connection  with  this  trust,  except  wdful  miscon- 
duct or  gross  negligence  after  personal  notice  and  distinct  specincatiou  in  writing 
from  some  person  interested  in  the  trust.  The  Trustee  shall  uicur  no  liability  to  any- 
body in  acting  upon  any  notice,  request,  consent,  certificate,  bond,  document,  or 
paper  believed  by  it  to  be  genuine  and  to  have  been  signed  by  the  proper  person. 
It.  shall  be  no  part  of  the  duty  of  the  Trustee  to  see  to  the  insurance  of  any  part  of 
the  property  liereby  conveyed  in  trust,  or  itself  to  etlect  such  insurance.  The 
Trustee  may  become  the  owner  of  bonds  and  coupons  secured  hereby  with  the  same 
rights  which  it  would  have  if  it  were  not  Trustee. 

The  Trustee  shall  not  be  personally  liable  for  any  debts  contracted  by  it,  or 
for  any  damage  to  person  or  property,  or  arising  out  of  non-payment  of  salaries, 
uon-fulfilment  of  contracts,  or  for  any  "other  tort  obligation  and  liability  arising  dur- 
ing any  period  wherein  the  Trustee  shall  manage  the  trust  properties  hereunder. 
The  trust  estate  is  hereby  made  primarily  liable  to  such  persons  for  every  such 
liability  and  for  every  liabUity  of  any  kind  which  the  Trustee  may  incur  thereunder; 
and  for  compensation  for  services  and  reimbursements  of  all  the  expenses  hereunder 
with  interest,  the  Trustee  shall  have  a  first  lien  upon  the  property  hereby  conveyed. 
The  Trustee  shall  not  be  under  any  obligation  or  duty  to  perform  any  act  here- 
under, to  take  any  action  towards  tlie  execution  or  enforcement  of  the  trust  hereby 
created,  or  to  defend  any  suit  in  respect  hereof,  except  upon  request  in  writing 
of  some  person  or  persons  interested  in  the  trust,  nor  unless  first  satisfactorily  in- 
demnified, nor  unless  satisfactory  provisions  be  made  to  furnish  the  Trustee  with 
additional  indemnity  against  liability  from  time  to  time  as  in  tlie  judgment  u(  the 
Trustee  may  be  required  for  its  prott;ction ;  nor  shall  the  Trustee  be  required  to  take 
notice  of  any  default  hereunder,  or  to  take  any  action  in  respect  of  any  defaults, 
unless  requested  to  take  notice  in  respect  thereof  by  a  writing  si-'ned  by  the  holders 
of  at  least  a  majority  in  interest  of  the  bonds  hereby  secured  and  then  outstanding, 
and  tendered  reasonable  indemnity  as  aforesaid,  anything  herein  contained  to  be  con- 
trary notwithstanding,  but  neither  any  such  request  nor  this  provision  therefor 
shall  alFeet  any  discretion  herein  or  elsewhere  especially  given  to  the  Trustee. 

Any  money  received  by  the  Trustee  under  any  provision  of  this  indenture  may 
be  treated  by  "it,  until  it  is  renuircd  to  pay  out  the  same  conformably  herewith,  as  a 
general  deposit,  without  any  liability  for  interest  save  such  as,  during  that  time,  it 
allows  to  its  general  depos'itors.  the  Trustee  shall  not  be  responsible  for  the  re- 
cording, registration,  or  filing  of  this  instrument  or  any  instrument  of  further  assur- 
ance, or  for  the  affixing  or  cancellation  of  any  revenue  stamps  or  for  the  estiuialiou 
or  payment  of  any  taxes,  or  for  not  comi)lying  with  the  laws  of  ,  with  n-spcct 

to  sucli  subjects  or  with  respect  to  any  other  subject;  nor  shall  it  be  bound  to  sec 
that  notice  of  the  lien  and  provisions  (lereof  is  given  to  any  person  whomsoever,  all 
of  which  matter  the  said  Company  covenants  and  agrees  to  sec  and 

perform.  i    i   i       i 

Tlie  Trustee  mav,  in  its  discretion,  advise  with  legal  counsel  to  be  selected  and 
employed  bv  it  at  tile  expense  of  llic  Company,  and  anything  done  or 

suffere'd  in  "good  faith  by  the  Trustee  in  accordance  with  the  opinion  of  couumI  sIimII 
be  conclusive  in  fav<,r'  of  the  Trustee  on  the  Cumj.any  and  on   all 

holders  of  bonds  and  coupons  secured  hereby.  ,     ,    , ,         » 

The  duties  of  the  Truster  to  the  Company,  and  to  the  holders  of 

bonds  and  coupon.3  secured  hereby,  shall  be  determiucd  solely  by  the  provisions  of 
this  instrument  and  bv  the  laws  of  the  State  of  .•         ,    ,  . 

'f he  Company  agrees,  from  lime  to  time,  on  demand,  to  pay  to 

the  Trustee  reasonable  compensation  for  its  services  hereunder;  nKo  to  make  rnm- 
bursements  to  the  Trustee;  for  all  counv-l  fees,  compensation  of  attorneys  and  ngenlH. 
and  other  expenditures  mmle  by  the  'IVuslec  hereunder,  with  inlenM  thereon  ;  also 
to  indemnify  and  save  the  Trustee  harmless  against  any  and  all  liahilili.s  ol  any 


INCORPORATION    AND   ORGANIZATION    OF    CORPORATIONS. 

kind  wliicli  the  Trustee  may  incur  in  the  exercise  and  performance  of  its  powers 
and  duties  liereundor,  incUulini^  any  penalty  or  liability  sulfered  by  tiio  Trustee 
under  this  instrument,  or  because  of  any  action  taken  by  it  thereunder  for  non- 
com|>liauee  with  the  laws  of  ,  or  ,  concerning  foreign  corporations 

or  otherwise  ;  and  for  such  indemnificatiou,  reimburseaieut,and  payment  of  Trustee's 
compensaiion  a  tirst  lien  is  hereby  imposed  in  favor  of  the  Trustee  upon  all  the 
properly  and  funds  liereby  conveyed  in  trust. 

The  recitals  and  statements  herein,  and  in  said  bonds  and  cotipons  contained, 
save  only  the  certilicate  of  authentication  by  tlio  Trustee,  shall  be  taken  as  state- 
ments t)y  the  party  of  the  lirsl  part,  and  shall  not  be  considered  as  made  by  or  as 
imposing  any  obligation  or  liability  upon  the  Trustee,  nor  shall  the  Trustee  be  held 
responsible  for  the  legality  or  validity  of  said  bonds  or  coupons  under  any  pro- 
visions of  the  laws  of  ,  ,  or  otherwise. 

And  it  is  further  covenanted  and  agreed  that  the  Trustee  may  resign  and  dis- 
charge itself  of  the  trust  hereby  created  by  notice  in  writing  to  the 
Company  to  be  given  at  least  three  montlis  before  such  resignation  is  so  given. 
If  a  vacancy  in  the  office  of  Trustee  hereunder  shall  occur,  a  new  Trustee  shall  be 
appointed  as  follows : 

Ten  days'  notice  shall  be  given  to  each  holder  of  the  bonds  hereby  secured,  ap- 
prising t  hem  of  the  fact  that  a  change  of  Trustee  hereunder  is  necessary,  and  that 
unless  objection  is  made  within  ten  days  from  the  date  of  such  notice  by  a  majority 
of  the  bondholders,  a  new  Trustee,  to  be  designated  in  said  notice,  will  be  ap- 
pointed. If  the  majority  of  tiie  bondholders  disapprove  of  the  choice  designated  for 
such  new  Trustee,  tiic  matter  shall  be  left  to  the  present  Trustee,  the  said 
Trust  Company. 

In  executing  this  indenture  the  Trustee  makes  no  covenant  or  representation  as 
to  the  title  or  interest  of  the  Company  in,  or  to,  the  property  de- 

scribed therein,  and  it  shall  be  no  part  of  the  duty  of  the  Trustee  to  see  that  any  of 
the  pro])erty  intended  to  be  conveyed  in  trust  liereunder  is  properly  and  legally 
subjected  to  the  lien  hereof. 

It  is  expressly  understood  that  the  Trustee  shall  be  under  no  duty  or  liability 
in  respect  to  any  tax  which  may  be  assessed  against  the  property  or  against  the 
owners  of  the  bonds  hereby  secured,  in  respect  to  the  property  hereby  conveyed, 
nor  shall  the  Trustee  be  under  any  duty  to  pay,  or  see  to  the  payment  of,  such  tax, 
or  take  any  notice  thereof  to  the  holders  of  the  bonds  secured  hereby,  or  any  other 
person,  and  for  any  expense  or  liability  which  the  Trustee  may  incur  by  reason  of, 
or  growing  out  of,  any  such  tax,  the  Trustee  shall  have  a  lien  on  the  property 
hereby  secured  prior  to  the  lien  of  the  bonds  hereby  secured. 

The  Trustee  shall  have  the  right  to  require  proof  of  the  ownership  of  any  bond 
by  the  production  of  the  bond.  The  holding  and  date  of  holding  of  bonds  by  any 
bondiiolder  executing  any  paper  or  histrumcnt  provided  for  herein,  and  the  amounts 
and  issue  number  of  the  bonds  held  by  such  person  may  be  ])roved  by  a  certificate 
in  writing  executed  by  any  depository  approved  by  the  Trustee  showing  that  such 
person  had  on  deposit  with  such  depository  the  bonds  described  in  such  certificate 
at  the  date  therein  mentioned. 

In  case  any  bond  secured  hereby  shall  become  mutilated  or  lost,  then  upon  the 
surrender  of  s\ich  mutilated  bond  to  the  Trustee,  or  upon  fding  with  the  Trustee 
evidence  of  such  loss,  and  giving  indemnity  which  the  Trustee  shall  consider  satis- 
factory, the  Comj)any  in  its  discretion  may  issue,  and  the  Trustee 
may  certify  a  new  bond  bearing  the  same  serial  number  and  in  identical  form  in 
substitution  or  exchange  for  the  bond  so  mutilated  or  lost. 

Whenever  in  this  deed  of  trust  the  existence  of  any  situation,  matter,  conclu- 
sion, or  fact  of  any  character,  or  the  sufficiency  or  validity  of  any  instrument,  paper, 
or  proceeding,  or  of  any  proof  or  evidence  of  any  fact*  of  any  ciiaracter,  shall  be 
prescribed  as  a  condition  of,  or  in  any  manner  witji  respect  to,  any  action  or  pro- 
ceeding on  the  part  of  the  Trustee,  or  shall  be  deemed  necessary  to  be  ascertained 
by  the  Trustee  as  the  basis  of  an  opinion  by  the  Trustee,  a  certified  copy  of  a  reso- 
lution of  the  Company,  together  with  a  certificate  of  the  President 
and  Vice-President,  Treasurer,  Secretary  of  the  Company,  verified 
040 


FORMS   AND   PRECEDENTS. 

under  oath,  shall  in  the  discretion  of  the  Trustee  be  sufficient  evidence  of  any  sueli 
fact,  situation,  matter  or  conclusion  stated  therein,  and  shall  be  complete  protection 
on  Its  part  upon  the  faith  thereof;  but  the  Trustee  may,  in  its  reasonable  discretiou, 
require  other  evidence. 

The  Company  covenants  and  agrees  that  it  will  pay  the  Trustee 

hereunder  its  necessary  fees  and  expenses  in  the  execution  of  the  trust  hereby 
created. 

In  Witness  Whereof,  the  party  of  the  first  part  has  caused  these  presents  to  be 
signed  by  its  President,  and  its  corporate  seal  to  be  iiereunto  affixed,  and  attested 
by  Its  Secretary  and  the  party  of  the  second  part,  in  token  of  its  acceptance  of  the 
trusts  and  the  obligations  hereby  imposed  upon  it,  has  caused  these  presents  to  be 
signed  by  its  second  Vice-President,  and  attested  by  its  Secretary,  and  its  seal  to 
be  hereunto  affixed,  the  day  and  year  tirst  herein  written. 

COMP.\NY. 

By  ,  President. 

Attest :  ,  Secretary. 

Trust  Company,  Trustee. 
By  ,  Vice-President. 

State  of  > 

County  of  I  ^^• 

Before  me,  ,  a  Notary  Public,  in  and  for  the  County  of  , 

State  of  ,  on  this  day  personally  appeared  ,  known  to  me  to  be 

the  person  whose  name  is  subscribed  to  the  foregoing  iustrumcut,  and  known  to  me 
to  be  the  President  of  the  Company,  a  corporation,  and  acknowledged 

to  me  that  he  executed  said  instrument  for  the  purposes  and  consideration  therciu 
expressed  and  as  the  act  of  said  corporation. 

,  Notary  Public, 
Co. 

State  of 
County  of 

Before  me,  ,  a  Notary  Public,  in  and  for  the  County  of  , 

State  of  ,  on  this  day  personally  apjiearcd  ,  known  to  mc  to  be 

the  |)ersou  whose  name  is  subscribed  to  the  foregoing  instrument,  and  known  to  me 
to  be  the  of  the  Trust  Company,  a  corporation,  and  acknowl- 

edged to  mc  that  he  executed  said  instrument  f(jr  the  purposes  and  consideration 
therein  expressed,  and  as  the  act  of  said  corporation. 

,  Notary  Public, 
Co. 

AFFIDAVIT  OF  MAILING  NOTICE  OF  STOCKHOLDERS'   MEETING. 

Slate  of  ? 

County  of  \    ^' 

having  first  hern  duly  sworn  on  ontli  says:  that 
he  is  llic  Sccrctiry  of  (he  Company,  a  eorjtorution  organizid  and  oxist- 

ii'g  under  the  laws  of  the  State  of  ;  that  on  liic  day  of  , 

I'j  ,  he  cau.sc(l  a  notice  of  the  annual  (or  special)  meeting  of  the  .stockholders  of 
said  Coin[)any,  a  true  copy  of  which  is  hereto  annexed  and  is  hereby  made  a  part  of 
this  affidavit,  to  be  mailed  in  a  sealed  cnvelopt!,  postage  prepaid,  uddressed  to  each 
stockholder  of  record  of  said  Coiripany  at  his  last  known  address  a.s  tlie  same 
a[)pears  on  the  books  of  the  Company. 

Sworn  and  subscribed  to  before  mc  this  day  of  ,  l.i     . 

,  Notary  Public, 
County 

r.  II 


INCOUrORATIOX    AND    ORGANIZATION   OF   CORPORATIONS. 


FORM  FOR  CERTIFICATE   OF  AUTHORIZATION  TO  COUNTERSIGN 
CERTIFICATES  OF  STOCK. 

TuK Company, 

,  Registrar. 

Tins  IS  TO  Certify,  That  at  a  meeting  of  the  Directors  of  the 
Company,  duly  conveued  aud  held  ou  the  day  of  ,  IDO  ,  the  following 

resolutions  wore  adopted : 

ResoU-ed,  That  tiie  Company  be  and   is   hereby   appointed  the 

Registrar  of  the  siiarcs  of  the  stock  of  this  Comj)any. 

Further  Rcsulved,  That  said  Company  is  authorized  to  countersign, 

■wlieii  signed  by  the  rrcsidcut  and  Secretary  of  this  Company,  an  original  issue   of 
certilieatcs  of'^sliarcs  of  this  Company  to  the   number  of  shares  of 

Common  Slock  and  shares  of  Preferred   Stock,  and   to   enter   the 

particulars  of  the  holdings  of  said  shares  in  the  register  from  time  to  time. 

Vurthcr  Resolved,  That  the  Company  may  apply  and   act   under 

instructions  of  ,  Counsel  of  this  Company,  in  respect  to  any  legal 

question  arising  in  connection  with  said  Agency. 

Further  Resolved,  That  the  Secretary  be  and  is  hereby  authorized  to  sign,  and 
seal  with  the  Company's  Seal,  a  Certiticate  of  Authorization  to  said 
Company  in  the  form  submitted  at  this  meeting. 

That  "the  total  authorized  capital  stock  of  said  Company  is  $  ,  divided 

iuto  §  of  Common  Stock  and  $  of  Preferred  Stock. 

Tliat  said  shares  are  the  par  value  of  $  each. 

That  certificates  of  stock  are  now  outstanding. 

Tlial  the  pro})erty  for  which  the  above-mentioned  shares  are  issued  has  beea 
actually  conveyed  or  transferred  and  delivered  to  the  Com])any._ 

Tiiat  the  Officers  authorized  by  the  foregoing  resolutions  to  sign  certificates  of 
stock  will  sign  as  follows  : 

The  President  will  sign 

The  Secretary  will  sign 

Names  of  Officers.  Addresses. 

President, 

Vice-President,  r 

Treasurer, 
Secretary, 
Attornei/, 

Names  of  Directors.  Addresses. 


Business  address  of  tlic  Company, 

Date  of  Annual  Meeting, 

Notice  f(jr  calling  Annual  Meeting  as  required  by  the  By-Laws. 

Signed  and  sealed  in  behalf  of  the  Company  by  authority  of  the  Board  of 
Directors,  this  day  of  ,  190  . 

For  the  Company, 

,  Secretary. 

State  of  ?  g 

County  of  \ 

On  the  day  of  in  the  year  ,  before  me  personally 

came  '  >  to  me  known,  who,  being  by  me  didy  sworn,  did 

depose  and  say  that  he  resided  in  ;  that  he  is  the  of  the 

'Company,  the  corporation  described  in  and  which  executed  tiic  above 

instrument ;  that  he  knew  the  seal  of  said  corporation  ;  that  the  seal  affixed  to  said 

542 


FORMS   AND   PRECEDENTS, 

iustrumeufc  was  sucli  corporate  seal ;  that  it  was  affixed  by  order  of  the  Board  of 
Directors  of  said  Corporatiou,  aud  that  he  sigued  his  uame  tlicreto  by  like  order. 

,  Notary  Public. 

Couuty. 

UNDERWRITING  AGREEMENT. 

COilPANY. 

Covering  Year,  First  Mortgage,         per  cent,     Sinking  Fund,  Coupon 

Gold  Bonds  ;  redeemable  at        and  interest. 

Dated  ,  190  .  Due  ,  19     . 

Interest  Payable  aud  at  the  office  of  the  Trust  Company, 

Trustee. 

This  Agreemext,  made  and   entered  into  this  day  of  ,  190  ,  by 

and  between  of  the  city  of  ,  State  of  ,  parties  of  tlie 

first  jiart  (hereinafter  called  "  the  Managers"),  and  the  several  subscribers  to  this 
syndicate  agreement,  parties  of  the  second  part : 

Whereas,  the  parties  of  the  first  part  have  organized  a  corporation  known  as  the 

Company,"  under  the  laws  of  the  State  of  ,  with  a  capital  of 

divided  into  shares  of  the  par  value  of  $         each,  which  will  issue 

of  first  mortgage,  six  per  cent,        year,  siukiug  fund,  coupon  gold  bonds, 

subject  to  call  at         aiid  accrued  interest,  of  which  will  be  used  as  part 

payment  of  the  property  purchased  and  _      will  be  left  iu  the  treasury  for  its 

use,  leaviii^T  wbicli  arc  hereby  underwritten. 

Aii'l  tFhereas,  the  subscribers  hereto  are  desirous  of  underwriting  a  portion  of 
tlie  proposed  issue  of  bonds,  as  provided  by  this  ajjreeinent,  and  tlierel)y  participat- 
ing in  tbe  profits  to  be  derived  from  the  sale  of  said  bonds  or  becoming  the  owners 
thereof.     Now,  this  agreement  witnessetli : 

Tliat  in  consideration  of  tlie  premises,  and  the  mutual  promises  hereinafter  con- 
tained, tlie  subscribers  severally,  but  not  jointly,  agree  with  the  Managers  and  with 
each  other  as  follows  : 

I.   The  subscribers  severally  subscribe  for  said  first  mortgage,        ]icr  cent, 
year,  sinking  fund,  coupon  gold  bonds,  to  the  amounts  (par  value)  set  opposite 
their  names  res|)ectively,  and  a^ree  to  take  and  pay  for  said  bonds,  or  any  part 
thereof  allotted  to  them,  in  cash,  at  per  cent  of  par,  together  with  accrued 

interest ;  payment  therefor  to  be  made  to  the  Trust  Comiiaiiy,  iiereiiiafter  called 

"  the  Trustee,"  in  the  City  of  ,  upon  demand  of  the  managers  when  bonds 

or  interim  certificates  representing  the  same  shall  be  ready  for  delivery,  but  |)ayiiicnt 
shall   not  be   required   before  ,  190  .     Upon  such  iiaynient,  the  subscriber 

shall  receive  an  interim  ceriifieatc  of  the  Trust  Company  in  lieu  of  said 

bonds,  which  certificate  shall  also  provide  for  the  delivery  of  the  bonds  and  all  cou- 
])r)ns  attached  on  ,190  ,  or  before,  in  the  discretion  of  the  Managers.     Each 

subscriber  upon  the  payment  of  each  exclusive  of  interest  shall  receive 

])ar  value  of  bonds  aforesaid  and  par  value  of  the  said  stock. 

If.  It  is  further  agreed  that  all  bonds  allotted  and  taken  hereunder  shall  be 
hf;l(l  by  the  parties  of  the  second  part,  sntiject  to  the  demand  and  cmitrol  of  the 
Managers  except  as   hereinafter  provideil,   until  ,  l'.>0  ,  who   shall,    during 

such  t]iue,  have  fnll  power  and  discretion  to  sell  the  said  bonds  w  any  part  thereof 
for  the  joint  benefit  of  the  parties  of  the  second  part  at  not  less  than  niul  accrued 
interest,  by  either  public  or  private  sale,  and  that  upon  notice  by  the  Managers  to 
anv  subscriber  hereto,  the  bonds  allotted  to  him  or  the  part  d.'signated  by  the 
Managers,  shall  be  delivered  tf)  the  Trustee,  except  such  as  sliall  have  l)een  previ- 
ously "withdrawn  from  sale,  as  hereinafter  provided,  and  said  Managers  shall,  withiil 
thirty  days  after  such  delivery,  i)ay  to  the  Trustee,  to  bo  rcmiltrd  t<i  the  owners  of 
th(!  bonds  so  deposited,  per  cent  of  their  par  value,  together  with  accrued  interest. 
The  managers  shall,  so  far  as  practicable,  call  from  the  subscribers  lieivto,  bonds 

^'^  III.   It  is  mutually  agreed  by  the  subscribers  hereto  that  this  syiidicalc  shall 


o 


43 


INCOnrOUATIOX    and    OUCANIZATION    of    CORrORATIONS. 

hold  all  of  the  saiJ  bonds  siihscril)0(l  for  as  a  joint  liokling  for  a  poriod  of  six  months 
from  tlio        dav  of  ,  190  ,  unless  said  l)onds  arc  sooner  sold,  and  tiiat  the  time 

for  tlie  joint  holdiuii;  of  any  remaining  unsold  bonds  mav  be  furtiier  exfench-d  for  a 
period  to  be  deternniunl  by  a  vote  of  two  i birds  in  interest  of  the  sul)seribers.  Any 
member  of  tliis  syndicate  authorized  ijy  the  Managers  may  otVer  and  sell  the  bonds, 
as  opportunity  oeenrs,  at  a  price  to  be  fixed  from  time  to  time  by  tiie  Managers: 
said  price,  however,  not  to  be  less  than  and  accrued  interest,  to  the  syndicate, 
except  by  written  consent  of  two-thirds  in  interest  of  the  sul)scribers  hereto. 

IV.  Any  subscriber  duly  authorized  to  sell  boiuls,  shall  be  paid  a  commission 
of  one  per  centum  of  the  par  value  of  the  bonds  sold  by  him,  said  commission  to  be 
paid  bv  the  Managers  and  charged  to  the  syndicate  at  the  time  of  sucli  sale  and  de- 
liverv  ;  any  syndicate  member  selling  any  i)ouds  shall  at  the  time  notify  the  Mana- 
gers'and  shall  receive  instructions  from  said  Managers  as  to  whether  said  bonds  so 
sold  shall  be  delivered  from  his  holding,  or  be  drawn  by  him  from  the  Managers. 

In  the  event  of  his  being  instructed  to  deliver  his  own  bonds,  he  shall  immedi- 
ately remit  to  the  said  Trustee,  to  the  credit  of  the  Managers,  the  dilference  between 
the  cost,  viz.:  aud  interest,  and  the  selling  price  of  the  bonds;  and  in  the  event 
of  drawing  them  from  the  Managers,  he  shall  i)ay  the  Trustee,  for  tiie  credit  of  the 
Managers,  for  the  bonds,  at  the  full  authorizecl  selling  price,  together  with  accrued 
interest  to  date  of  delivery. 

V.  Any  subscriljcr  hereto  may  withdraw  his  bonds  from  this  underwriting 
agreement,  provithxl  such  subscriber  notifies,  in  writing,  the  Managers,  at  the  time 
of  signing  the  underwriiing  agreement,  of  his  or  their  intentions  so  to  do;  such 
party  so  withdrawing  bonds  agrees,  during  the  life  of  the  underwriting  agreement 
and  any  extension  thereof,  not  to  offer  for  sale  or  sell  any  of  such  bonds,  and  waives 
profits,  except  stock  hereunder. 

VI.  The  right  and  power  to  enforce  this  agreement,  when  the  same  shall  be- 
come binding,  operative  and  effective,  is  hereby  vested  exclusively  in  the  Managers, 
•who  alone  shall  have  the  right  to  enforce  payment  of  aU  obligations  assumed  by  the 
subscribers  hereto. 

VII.  In  case  for  any  reason,  whether  before  or  after  this  agreement  has  other- 
wise become  binding,  operative,  and  effective,  the  Managers  shall  determine  to  aban- 
don this  underwriting  plan,  and  the  organization  of  the  corporation,  and  shall  so 
declare,  then  this  agreement  in  all  its  parts,  including  the  obligation  to  dc^liver  said 
bonds  or  any  of  the  stock,  shall  be  and  become  forthwith  null  and  void,  and  the  sub- 
scribers hereto  shall  be  notified  accordingly  by  the  Managers,  and  all  moneys  paid 
hereunder  shall  be  returned. 

VI II.  The  Trustee  shall  be  the  depository  of  the  INIanagers  and  shall  hold  the 
joint  t'unds  and  profits  arising  hereunder,  and  shall  distribute  the  same  from  time  to 
time  in  accordance  with  the  directions  of  the  Managers,  pro  rata  among  the  sub- 
scribers hereto,  except  that  it  shall  pay  therefrom  the  commissions  and  expenses 
arising  hereunder. 

IX.  The  managers  shall  receive  no  compensation  for  their  services  as  Mana- 
gers and  sliall  not  be  liable  under  any  of  the  provisions  of  tiiis  agreement,  or  in  or 
for  any  matter  therewith  connected,  provided  reasonable  care  and  discretion  shall 
have  been  exercised  by  them  in  the  discharge  of  their  duties. 

X.  This  agreement  shall  be  binding  upon  the  parties  of  the  second  part  only 
when  subscriptions  hereto  shall  have  been  made  to  the  extent  of  at  least 

Right  is  reserved  to  reject  any  subscription  or  to  allot  a  less  amount  than  that 
subscribed  for. 

Ill  Witness  Whereof,  the  parties  of  the  first  part  have  signed  an  original  hereof, 
and  the  subscribers,  parties  of  the  second  part,  have  signed  said  original  or  a  coun- 
terpart thereof,  all  of  which  shall  be  taken  aud  deemed  as  one  ( riginal  instrument. 

Managers  \ 

Subscribers.  Address. 

544 


FORMS   AND    PRECEDENTS. 


VOTING  TRUST  AGREEMENT. 


This  Agrkemext  made  this  day  of  ,  190  ,  by  and  between 

the  undersigned,  stockliolders  of  the  Company,  parties  of  tlie  tirst 

part,  and  Trust  Company,  party  of  the  second  part : 

Witnesseth,  That  in  consideration  of  the  mutual  covenants  and  agreements  here- 
inafter set  forth,  and  in  further  consideration  of  the  sum  of  one  dollar  by  each  of 
the  parties  paid  to  tlie  others,  tiie  receipt  of  which  is  hereby  acknowledged,  the  said 
parties  to  this  agreement  hereby  agree  by  and  with  eacli  other  as  follows,  to  wit : 

First.  The  said  parties  of  the  first  part  do  hereby  assign  and  transfer  and  agree 
to  deliver  unto  the  said  party  of  the  second  part,  the  number  of  shares  of  stock  of 
the  Company  (a  corporation  organized  and  existing  under  the  laws  of 

the  State  of  )  set  opposite  their  respective  names,  to  be  held  by  said 

party  of  the  second  part  until  the  day  of  .^y^^    ;  in  trust,  how- 

ever, for  said  parties  of  the  first  part,  their  executors,  administrators,  and  assigns, 
at  all  times  subject  to  the  terms  and  conditions  hereinafter  set  forth. 

Second.  Said  parties  of  the  first  part  do  hereby  covenant  and  agree  that  said 
party  of  the  second  part  as  voting  trustee  for  said  parties  of  the  first  part,  shall, 
for  a  period  of  years  from  date  hereof,  possess  and  be  entitled  to  exercise, 

without  restriction  or  restraint  other  than  is  lierein  contained,  the  right  to  vote  said 
shares  of  stock  in  said  Company  hereby  conveyed  by  said  parties  of 

the  first  part  to  said  party  of  the  second  j)art. 

Third.  The  said  party  of  the  second  part  does  hereby  promise  and  agree  with 
said  parties  of  tlie  first  part,  that  every  holder  of  voting  trust  certificates  issued  as 
hereinafter  provided,  shall,  immediately' upon  the  execution  of  this  agreement  and 
upon  the  delivery  by  him  to  said  party  of  the  second  part  of  the  stock  certificates 
hereby  assigned,'receive  from  said  party  of  the  second  part  voting  trust  certificates 
to  an 'aggregate  amount  equal  to  the  amount  of  stock  so  delivered,  which  certificate 
shall  be  in  the  following  form,  to  wit : 


VOTING  TRUST  CERTIFICATE. 

ISSCED   BY   THE  TuUST   CoMPAXY. 

Tnis  IS  TO  Certify,  that  [insert  name  of  stockholder^  will 

within  years  from  date  hereof  be  entitled  to  receive,  and  the   undersigned 

does  hereby  covenant  and  agree  that  lie  sliall  receive,  a  certificate  for 
full  paid  shares  of  dollars  each  of  the  common  stock  of  tlie 

Comjiany,  and  a  certificate  for  full  paid  shares  of  dollars  each  of 

the  preferred  stock  of  the  Company,  and  that  in  the  meantime  he  shall 

receive  payments  equal  to  the  dividends,  if  any,  collected  by  the  undersigned  as 
voting  trustee  upon  a  like  number  of  shares  of  common  stock  and  preferred  .stock 
heretofore  assigned  by  said  Uj  the  undersigned  in  trust ;  and  until  the 

day  of  ,  190  ,   the  undersigned,    as   such    voting   trustee,   shall 

possess  and  be  entitled  to  exercise  the  right  to  vot<-  in  respect  to  any  of  such  stock  ; 
It  being  expressly  stipulated  and  agreed  that  no  voting  rights  shall  pass  to  the 
liold(T''hereof  by  virtue  of  his  ownership  of  this  cerlilieate.  This  certificate  has 
been  issued  pursuant  to  the  terms  of  an  agreement  in  writing  dated  ,  190  , 

made  and   entered   by   the  above-iiaiiu'd  and  others,  as  stock- 

holders of  said  '  Company,  parties  of  the  first  part  named  in  said  agree- 

ment, and  the  undersigned  as  the  parly  of  the  second  part  named  in  said  agreement, 
which  agreement  is  now  on  file  with  ihe  undcTsigned,  and  is  open  to  ins|)cetion 
at  any  time  bv  the  said  .  or  his  assigns.  ,,,,•, 

Tills  certificate  is  transferable  only  on  the  voting  trust  certificate  book  (which 
it  is  hereby  covenanted  and  agreed  shall  be  kept  for  that  purpose  by  the  under- 
signed) either  in  person  or   by  power  of  attorney  duly  authorized,  according  to 

35  '  545 


IXCOnrORATION    AND  ORGANIZATION   OF   CORPORATIONS. 

nilcs  M-hicli  liavo  boon  ost.-iblislioil  for  tli.it  purpose  by  tho  umlorsii^iicil  and  upon 
surrondor  lioroot";  and  until  so  transforrod  ilio  uudcrsiijnod  may  treat,  tlic  roi^i.storod 
holder  as  tlio  owner  liereot'  for  all  purposes  whatsoever,  exco|)t  that  delivery  of  such 
certilicates  heroin  shall  not  be  made  without  the  surrender  hereof. 

In   Witness   Whereof,   the  said  Trust   Company   has   caused   those 

presents  to  be  signed  by  its  President  and  its  Ct)rnorate  Seal  to  be  hereunto  affixed, 
and  to  be  attested  by  its  Secretary  this  aay  of  ,  190  . 

Trust  Company, 
Attest  :  ,  President. 

,  Secretary. 

Fourth.  Tliat  each  and  all  of  tlie  covenants  and  agreements  contained  in  the 
foregoing  form  of  voting  trust  certificate  are  hereby  made  part  and  parcel  of  this 
agreement,  and  sliall  be  and  are  hereby  made  binding  upon  the  several  parties  to 
tins  agreement,  their  executors,  administrators,  successors,  and  assigns. 

Fifth.  At  any  time  until  the  expiration  of  this  agreement  as  hereinbefore  pro- 
vided, the  said  party  of  the  second  part  may  receive  any  additional  full  paid  shares 
of  the  capital   stock  of  the  Company,  either  common  or  preferred, 

upon  the  terms  and  conditions  of  this  agreement,  and  it  shall  deliver  in  exchange 
therefor  voting  trust  certificates  as  hereinbefore  provided. 

Si.rth.  In  voting  stock  held  by  it,  the  said  party  of  the  second  part  sliall  exer- 
cise its  best  judgment  aud  discretion  at  all  times  in  voting  for  the  election  of  suitable 
directors  for  said  Company,  to  the  end  that  the  affairs  of  the  Company 

shall  be  carefully  and  intelligently  managed,  and  in  voting  on  all  other  matters 
■which  may  come  before  it  at  any  stockholders'  meeting  of  said  Company,  shall 
exercise  like  judgment  and  discretion. 

Seventh.  It  is  hereby  covenanted  and  agreed  that  the  said  party  of  the  second 
part  shall  not  be  liable  or  incur  any  responsibility  by  reason  of  its  acts  of  omission 
or  commission  in  the  premises,  except  for  wilful  misconduct  or  gross  negligence  in 
the  execution  of  the  trust  hereby  created,  and  which  is  hereby  accepted  by  said 
party  of  the  second  part. 

In  Witness  Whereof,  the  several  parties  to  this  agreement  have  hereunto  set  their 
hands  and  seals  this  day  of  ,  19     . 


CERTIFICATE  OF  INCORPORATION 


UxiTED  States  Steel  Corporation  (as  Amended)  (New  Jersey  Charter). 

We,  the  undersigned,  in  order  to  form  a  corporation  for  the  purposes  herein- 
after stated,  under  and  pursuant  to  the  provisions  of  the  Act  of  the  Legislature  of 
the  State  of  New  Jersey,  entitled  "An  Act  concerning  Corporations  (Revision  of 
1896),"  and  tiie  acts  amendatory  thereof  and  supplemental  thereto,  do  hereby 
certify  as  follows  : 

I.  The  name  of  the  corporation  is  United  States  Steel  Corporation. 

II.  (Clause  designating  office  and  agent  in  New  Jersey.) 

III.  The  objects  for  which  the  corporation  is  formed  are  : 

To  manufacture  iron,  steel,  manganese,  coke,  copper,  lumber,  and  other  materials, 
and  all  or  any  articles  consisting,  or  partly  consisting,  of  iron,  steel,  copper,  wood, 
or  other  materials,  and  all  or  any  products  thereof. 

To  acquire,  own,  lease,  occupy,  use,  or  develop  any  lands  containing  coal  or 
iron, manganese,  stone,  or  other  ores,  or  oil,  and  any  wood  lands,  or  other  lands  for 
any  purf)ose  of  the  Company. 

To  mine,  or  otherwise  to  extract  or  remove,  coal,  ores,  stone  and  other  minerals 
and  timber  from  any  lands  owned,  acquired,  leased,  or  occupied  by  the  Company, 
or  from  any  other  lands. 

546 


FORMS   AND   PRECEDENTS. 

To  buy  and  sell,  or  otlicrwise  to  deal  or  to  traffic  in  iron,  steel,  manganese, 
copper,  stone,  ores,  coal,  coke,  wood,  luniher,  and  other  materials,  and  any'of  the 
products  thereof,  and  any  articles  consisting  or  partly  consisting  thereof. 

To  construct  bridges,  buildings,  machinery,  ships.'boats,  engines,  cars,  and  other 
equipment,  railroads,  docks,  slips,  elevators,'  water  works,  gas"  works,  and  electric 
works,  viaducts,  aqueducts,  canals,  and  other  water-ways,  and  any  other  means  of 
transportation,  and  to  sell  the  same,  or  otherwise  to  dispose  thereof,  or  to  maintain 
and  operate  tlie  same,  except  that  tlie  Company  shall  not  maintain  or  operate  any 
railroad  or  canal  in  the  State  of  New  Jersey. 

To  apply  for,  obtain,  register,  purchase,' lease,  or  otherwise  to  acquire,  and  to 
hold,  use,  own,  operate,  and  introduce,  and  to  sell,  assign,  or  otherwise  to  dispose 
of,  any  trade  marks,  trade  names,  natents,  inventions,  improvements,  ami  processes 
used  in  connection  with  or  secured  under  letters  patent  of  the  United  States,  or 
elsewhere  or  otherwise,  and  to  use,  exercise,  develop,  grant  licenses  in  respect  of, 
or  otherwise  to  turn  to  account  any  such  trade  marks,  patents,  licenses,  processes, 
and  the  like,  or  any  such  property  or  rights. 

To  engage  in  any  other  manufacturing,  mining,  construction,  or  transportation 
business  of  any  kind  or  character  wliatsoevcr,  and  to  that  end  to  acquire,  hold,  own. 
and  dispose  of  any  and  all  property,  assets,  stocks,  bonds,  and  riglits  of  any  and 
every  kind,  but  not  to  engage  in  any  business  hereunder  which  shall  require  the  ex- 
ercise of  the  right  of  eminent  domain  within  the  State  of  New  Jersey. 

To  acquire  by  purchase,  subscription,  or  otherwise,  and  to  hold  or  to  dispose  of, 
stocks,  bonds,  or  any  other  obligations  of  any  corporation  formed  for,  or  then  or 
heretofore  engaged  in  or  pursuing,  any  one  or  more  of  the  kinds  of  business,  pur- 
poses, objects  or  operations  al)ove  indicated,  or  owning  or  holding  any  jjroperty  of 
any  kind  herein  mentioned,  or  of  any  corporation  owning  or  holding  the  stocks 
or  the  obligations  of  any  such  corjjoration. 

To  hold  for  investment,  or  otherwise  to  use,  sell,  or  dispose  of,  any  stock,  bonds, 
or  other  obligations  of  any  such  other  corporation ;  to  aid  in  any  manner  any  cor- 
poration whose  stock,  bonds,  or  other  obligations  are  held  or  iu  any  manner  guaran- 
teed by  the  Company,  and  to  do  any  other  acts  or  things  for  the  preservation, 
protection,  improvement,  or  enhancement  of  the  value  of  any  such  stock,  bonds,  or 
other  obligations,  or  to  do  any  acts  or  things  designed  for  any  such  purpose  ;  and, 
while  owner  of  any  such  stock,  bonds,  or  other  obligations,  to  exercise  all  tlu;  rights, 
powers,  and  privileges  of  ownership  thereof,  and  to  exercise  any  and  all  voting 
power  thereon. 

The  business  or  purpose  of  the  Company  is  from  lime  to  time  to  do  any  one  or 
more  of  the  acts  and  things  herein  set  forth  ;  and  it  may  coiuluct  its  business  in 
other  States,  and  in  the  Territories,  and  in  foreign  countries,  and  may  have  one 
office,  or  more  than  one  office,  and  kc<'p  the  books  of  the  Company  outside  of  the 
State  of  New  Jersey,  except  as  otiierwise  may  be  jirovidcd  by  law;  and  may  hold, 
purchase,  mortgage,  and  convey  real  and  personal  projierty,  cither  iu  or  out  of  the 
State  of  N(;w  Jersey. 

Without  iu  any  particular  limiting  any  of  the  objects  and  powers  of  the  cnr- 

r)oration,  it  is  hereby  expressly  declared  and  ])n)vidcd  that  the  corporation  sliall 
lave  power  to  issue  bonds  and  oilier  obligations  in  payment  for  ]iropcrly  |)urclias(»l 
or  acquired  by  it,  or  for  any  other  object  in  or  about  its  business ;  to  mortgage  or 
pledge  any  stocks,  bonds,  or  other  obligations,  or  any  |)roiierty  which  may  lie  ae- 
quired  by  it,  to  secure  any  bonds  or  other  ol)ligations  by  it  issued  or  incurred;  to 
guarantee  any  dividc^nds,  or  bomis,  or  contracts,  or  other  obligations;  to  niake  and 
perform  contracts  of  any  kind  and  (leseri|»tion  and  in  carrying  on  its  busine.Hs,  or 
for  the  pur|)osc  of  atf^iining  «ir  furthering  any  c)f  its  objeels,  to  do  any  and  all  other 
acts  and  things,  and  to  exercise  any  and  all  other  powers  which  n  copartnershi|» 
or  natural  person  could  do  and  exercise,  and  which  now  or  hereafter  may  bo 
authorized   by  law. 

TV.  Tin;  tot;il  authorized  capital  stock  of  the  corporation  is  eleven  Inindred 
million  dollars  (51.100,000,00(1),  divided  info  eleven  million  shares  f)f  tlie  par  value  of 
one  hundred  dollars  each.  Of  such  total  authorized  capital  stoek,  five  million  five 
hundred  thousand  shares,  amountiuL'  lo  five  Imiidn-d  and  fifty  million  dollars,  •tlinll 


INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS. 

bo  preferred  stock,  and  five  million  five  hundred  tlionsand  shares,  amounting  to  five 
luuuircd  and  fil'lv  nnlliini  dollars,  shall  ho  common  stock. 

From  time  to' time,  the  preferred  stock  and  the  connnon  stock  may  be  increased 
according  to  law,  and  may  be  issued  in  such  amounts  and  proportions  as  shall  be 
deternnned  by  the  Board  of  Directors,  and  as  n\ay  be  permitted  by  law. 

The  holders  of  the  preferred  stock  shall  be  entitled  to  receive  when  and  as  de- 
clared, from  the  surplus  or  net  profits  of  the  corporation,  yearly  dividends  at  the 
rate  of  seven  per  centum  per  ainiuni,  and  no  more,  payable  quarterly  on  dates  to  be 
fixed  by  the  by-laws.  The  dividends  on  the  ])referred  stock  shall  be  cumulative,  and 
shall  be  payable  before  any  dividend  on  tiie  common  slock  shall  be  paid  or  set 
apart ;  so  that,  if  in  any  year  dividends  amounting  to  seven  per  cent  shall  not  have 
been  paid  thereon,  the  'deficiency  shall  be  payable  before  any  dividends  shall  be 
paid  upon  or  set  apart  for  the  common  stock. 

AVlienevcr  all  cumulative  dividends  on  the  preferred  stock  for  all  previous  years 
shall  have  been  declared  and  shall  have  become  payable,  and  the  accrued  quarterly 
instalments  for  the  current  year  shall  have  been  declared,  and  the  Company  shall 
have  i)aid  such  cumulative  dividends  for  previous  years,  and  such  accrued  quarterly 
instalments,  or  shall  have  set  aside  from  its  surplus  or  net  ))rolits  a  sum  sufficient 
for  the  pavment  thereof,  the  Board  of  Directors  may  declare  dividends  on  the  com- 
mon stock,  payable  then  or  thereafter,  out  of  any  remaining  surplus  or  net  profits. 

In  the  event  of  any  liquidation  or  dissolution  or  winding  u])  (whether  voluntary 
or  involuntary)  of  the  corporation,  the  holders  of  the  preferred  stock  shall  be  en- 
titled to  be  paid  in  full  both  the  par  amount  of  their  shares,  and  the  unpaid  dividends 
accrued  thereon,  before  any  amount  shall  be  paid  to  the  holders  of  the  common 
stock ;  and  after  the  payment  to  the  holders  of  the  preferred  stock  of  its  par  value, 
and  the  unpaid  accrued  dividends  thereon,  the  remaining  assets  and  funds  shall  be 
divided  and  paid  to  the  holders  of  the  common  stock  according  to  their  respective 
shares. 

V.  The  names  and  post-office  addresses  of  the  incorporators,  and  the  number  ot 
shares  of  stock  for  which  severally  and  respectively  we  do  hereby  subscribe  (the 
airgregate  of  our  said  subscriptions  being  thousand  dollars,  is  the  aniount  of 
capital  stock  with  which  the  corporation  will  commence  business),  are  as  follows : 

(Here  follow  the  names  and  post-office  addresses  of  each  of  the  incorporators, 
and  the  number  of  shares  of  stock  subscribed  for  by  each.) 

VI.  The  duration  of  the  corporation  shall  be  perpetual. 

VII.  The  number  of  Directors  of  the  Company  shall  be  fixed  from  time  to  time 
by  the  by-laws;  but  the  number,  if  fixed  at  more  than  three,  shall  be  some  multiple 
of  three.'  Tlie  Directors  shall  be  classified  with  respect  to  the  time  for  which  they 
shall  severally  hold  office  by  dividing  them  into  three  classes,  each  consisting  of  one- 
third  of  the  'whole  numbe"r  of  the  Board  of  Directors.  The  Directors  of  the  first 
class  shall  be  elected  for  a  term  of  one  year ;  the  Directors  of  the  second  class  for  a 
term  of  two  years  ;  and  the  Directors  of  the  third  class  for  a  term  of  three  years ; 
and  at  each  annual  election  the  successors  to  the  class  of  Directors  whose  terms  shall 
expire  in  that  year  shall  be  elected  to  hold  ogice  for  the  term  of  three  years,  so  that 
the  term  of  o'ffice  of  one  class  of  Directors  shall  expire  in  each  year. 

The  number  of  the  Directors  may  be  increased  as  may  be  provided  in  the  by-laws. 
In  case  of  any  increase  of  the  number  of  the  Directors  the  additional  Directors 
shall  be  elected  as  may  be  provided  in  the  by-laws  by  the  Directors  or  by  the 
stockholders  at  an  annual  or  special  meeting  ;  and  one-third  of  their  number  shall 
be  elected  for  the  then  unexpired  portion  of  the  term  of  the  Directors  of  the  first 
class,  one-third  of  their  number  for  the  unexpired  portion  of  the  term  of  the  Direc- 
tors of  the  second  class,  and  one-third  of  their  number  for  the  unexpired  portion  of 
the  term  of  the  Directors  of  the  third  class,  so  that  each  class  of  Directors  shall  be 
increased  equally. 

In  case  of  any  vacancy  in  any  class  of  Directors  through  death,  resignation,  dis- 
qualification or  other  cause,  the  remaining  Directors,  by  afiirmativc  vote  of  a 
majority  of  the  Board  of  Directors,  may  elect  a  successor  to  hold  ofiice  for  the 
unexpired  portion  of  the  term  of  the  Director  whose  place  shall  be  vacant,  and  until 
the  election  of  a  successor. 
548 


FORMS   AND   PRECEDENTS. 

The  Board  of  Directors  sliall  Lave  power  to  hold  their  meetings  outside  of  the 
State  of  New  Jersey  at  such  places  as  from  time  to  time  may  be  designated  by  the 
by-laws  or  by  resolution  of  the  Board.  The  by-laws  may  prescribe  the  number  of 
Directors  necessary  to  constitute  a  quorum  of  the  Board  of  Directors,  iohich  number 
may  be  less  than  a  majority  of  the  whole  number  of  the  Directors. 

Unless  authorized  by  votes  given  in  person  or  by  proxy  by  stockholders  holding 
at  least  two-thirds  of  the  capital  stock  of  the  corporatiou,  which  is  represented  and 
voted  upon  in  person  or  by  proxy  at  a  meeting  specially  called  for  that  purpose,  or 
at  an  annual  meetiug,  the  Board  of  Directors  shall  not  mortgage  or  pledge  any  of  its 
real  property,  or  any  shares  of  the  capital  stock  of  ai.y  other  corporation  ;  but  this 
prohibition  shall  not  be  construed  to  api)ly  to  the  exicuiiou  of  any  purchase-mouey 
mortgage  or  any  other  purchase-mouey  lien. 

As  authorized  by  the  Act  of  the  Legislature  of  the  State  of  New  Jersey,  passed 
March  22,  1901,  amending  the  seventeenth  section  of  the  Act  concerning  Corpora- 
tions (Revision  of  1896),  any  action  wliich  theretofore  required  the  consent  of  the 
holders  of  two-tliirds  of  the  stock  at  any  meeting,  after  notice  to  them  given,  or 
required  their  consent  in  writing  to  be  filed,  may  be  taken  uj)on  the  consent  of,  and 
the  consent  given  and  filed  by,  the  holders  of  two-thirds  of  the  stock  of  each  class 
represented  at  such  meeting  in  person  or  by  proxy. 

Any  officer  elected  or  appointed  by  the  Board  of  Directors  may  be  removed  at 
any  time  by  the  affirmative  vote  of  a  majority  of  the  whole  Board  of  Directors. 

Any  other  officer  or  employee  of  the  Company  may  be  removed  at  any  time  by 
vote  of  the  Board  of  Directors',  or  by  any  committee  or  superior  officer  upon  whom 
such  power  of  removal  may  be  conferred  by  the  by-laws  or  by  a  vote  of  the  Board 
of  Directors. 

The  Baard  of  Directors,  by  the  affirmative  vote  of  a  majority  of  the  whole 
board,  mav  appoint  from  the  Directors  an  executive  committee,  of  which  a  majority 
shall  constitute  a  quorum;  and,  to  such  extent  as  shall  be  |)rovided  in  the  by-laws, 
such  committee  shall  have  and  may  exercise  all  or  any  of  tlie  powers  of  the  Board 
of  Directors,  including  power  to  cause  the  seal  of  the  corporatiou  to  be  affixed  to 
all  papers  that  mav  require  it. 

The  Board  of  "Directors,  by  the  affirmative  vote  of  a  majority  of  the  ^yhole 
board,  mav  appoint  any  other  Standing  Committees,  and  such  Standing  Committees 
shall  have' and  may  exercise  such  powers  as  shall  be  conferred  or  authori/.cd  by  the 

by-laws.  ,    ,      o 

The  Board  of  Directors  may  appoint  not  only  other  officers  of  the  Lompnny, 
but  also  one  or  more  vice-presidents,  one  or  more  assistant  treasurers,  and  one  or 
more  assistant  secretaries;  and,  to  the  extent  provided  in  the  by-laws,  the  persons 
so  appointed  respectively  shall  have  and  may  exercise  all  the  powers  ol  the  presi- 
dent, of  tlie  treasurer,  and  of  the  secretary  respectively. 

The  Board  of  Directors  sluill  liavc  power  from  time  to  time  to  fix  and  to  deter- 
mine and  to  v«ry  the  amount  of  tlic  working  cajjital  of  tlic  Company;  and  to  direct 
and  determine  th;  use  and  disposition  of  any  surj.lus  or  net  jiiolits  over  and  above 
the  capital  stock  paid  in;  and  in  its  discretion  the  Board  of  Directors  nu.y  use  and 
apply  aiiv  such  surplus  or  accumnlatcd  prolils  in  puirhasing  or  neqniring  its  bonds 
or  otiieroliligations,  or  sliares  of  its  own  capit.d  sl<.ek.  to  such  extent  and  in  siirli 
manner  and  upon  such  terms  as  the  B..ard  of  Direclurs  shall  deem  expedient;  but 
shares  of  such  capital  stock  so  ])urchased  or  acquired  may  be  resold,  unless  such 
sliares  shall  have  been  retired  for  the  purpose  of  decreasing  the  Comi)any  »  Cfti>ital 

stock  as  provided  by  law.  ,    „    ,  .  i    .i  i  *    ...i    » 

The  Board  of  Directors  from  time  to  tunc  shall  d-trrniiiie  whetiier  niid  to  what 
extent  and  at  what  times  and  places,  and  under  what  ronditimis  and  regulations, 
the  accounts  and  books  of  the  cor|H)nition.  or  any  of  them,  sliall  be  <.p.-n  to  the  iii- 
speclion  of  the  stockholder.,  and  no  slwkholder  sliall  have  any  right  to  insiH-et  any 
account  or  book  or  dr,cumeiit  of  the  roriK.rati..ii.  except  a.,  conferr.d  bv  Mntutt-  or 
authorized  bv  the  Board  of  Directors  or  by  a  resolution  of  lie  Moekliol,  ers. 

Subiect  alwavs  to  bv-laws  ma<le  by  the  stockholders,  the  Brmrd  of  Din-ctoni 
mav  make  bv-laws.  and."  from  time  to  time,  may  alter,  amend,  or  re|K-«l  anv  •.v-l««;  ; 
but  any  by-laws  made  by  the  Boanl  of  Dircct.jrs  may  be  altered  or  rep«v.hd  by  the 


INCORPORATION  AND   ORGANIZATION    OF   CORPORATIONS. 

stockholders  at  any  annual  nieetiniij,  or  at  any  special   meeting,  provided  notice  of 
such  proposed  alteration  or  repeal  be  included  in  llie  notice  of  the  meeting. 

///  intiit'ss  H'bcreqf,  we  have  hereuuto  set  our  hands  and  seals  the  I23d  day  of 
February,  1901. 

(Sigi  atwres  of  Incorporators.) 


CERTIFICATE  OF  INCORPORATION 

OF 

Auditing  Company   (New  Jersey  Cuarter). 

Article  1.   The  corporate  name  is  : 

Article  2.   The  objects  of  the  corjioration  are  : 

To  open,  take  charge  of,  maintain,  keep,  institute,  examine,  audit,  certify  to,  and 
guarantee  the  correctness  of  the  books  and  accounts  of  all  ])ersons,  Gnus,  part- 
nerships, corporations,  banks,  trust  estates,  trust  companies,  Building  and  Loan 
Associations,  beneficial  associations,  and  all  other  natural  or  corporate  beings 
whatsoever. 

To  furnish  all  persons,  firms,  partnerships,  and  corporations  with  complete  and 
modern  system  or  systems  of  auditing  and  accounting,  and  to  act  as  controller  or 
auditor  thereof,  and  to  issue  certificates  of  etficiency  to  accountants. 

To  act  as  a  collecting  agency  for  its  patrons,  take  assignments  of  claims  against 
debtors  of  its  patrons  and  others,  and  sue  thereon  in  its  own  name,  if  uot  pro^ 
hibited,  to  act  as  mercantile  agency,  to  investigate  and  recommend  persons  desirous 
of  doing  business  with  its  patrons  and  others,  and  to  issue  certificates  as  to  the 
responsibility  of  jjersous,  firms,  partnerships,  and  corporations. 

To  make  and  keep,  by  means  of  photography  or  otherwise,  complete  and  accu- 
rate co])ies  or  records  of  the  books  and  accounts  of  all  persons,  firms,  parlnersliips, 
corporations,  trust  estates,  Building  and  Loan  Associations,  beneficial  associations, 
uiunicipalitics,  and  the  records  of  all  other  natural  or  corporate  beings  whatsoever. 

Said  coi'poration  shall  indemnify  and  save  harmless  its  patrons  from  any  and  all 
costs  or  expenses,  loss  or  damage,  arising  out  of  any  error  committed  by  said  cor- 
poration or  its  agents  in  the  duties  aforesaid,  and  said  corporation  hereby  expressly 
M'aives  all  rights  to  any  benefits  of  any  statute  of  limitation  now  in  force  or  herein- 
after to  be  enacted. 

As  subsidiary  objects  and  powers  the  corporation  may 

Manufacture,  purchase,  or  otherwise  acquire,  goods,  wares,  merchandise,  and 
personal  property  of  every  class  and  description,  and  hold,  own,  mortgage,  sell,  or 
otherwise  dispose  of,  trade,  deal  in,  and  deal  with  the  same. 

Acquire  and  undertake  the  good  will,  property,  I'ights,  franchises,  and  assets  of 
every  kind  and  the  liabilities  of  any  person,  firm,  j)artncrship,  or  corporation,  either 
partly  or  wholly,  and  pay  for  the  same  in  cash,  stock,  or  bonds  of  the  corporation 
or  otherwise. 

Enter  into,  make,  perform,  and  carry  out  contracts  of  every  kind  and  for  any 
lawful  purpose  with  any  person,  firm,  association,  or   cor])oration. 

Borrow  or  raise  money  without  limit  as  to  amount  by  the  issue  of,  or  upon  war- 
rants, bonds,  debentures,  and  other  negotiable  or  transferable  instruments  or 
otherwise. 

Hold,  purchase,  or  otherwise  acquire,  sell,  assign,  transfer,  mortgage,  pledge,  or 
otherwise  dispose  of  shares  of  the  capital  stock,  bonds,  debentures,  or  other  evi- 
dences of  indebtedness  created  by  any  other  corporation  or  corporations,  and  wiiile 
the  owner  thereof  exercise  all  the  rights  and  privileges  of  ownership,  including  the 
right  to  vote  thereon. 

To  apply  for,  purchase,  or  otherwise  acquire,  and  to  hold,  own,  use,  operate, 
and  to  sell,  assign,  or  to  otherwise  dispose  of;  to  grant  licenses  in  respect  of,  or  to 
otherwise  turn  to  account  any  and  all  inventions,  improvements,  ])rocesses,  and 
trade  marks  used  in  connection  witli,  or  secured  under,  letters  j)atent  or  copyright 
of  the  United  States  of  America,  or  elsewhere  or  otherwise,  and  witii  a  view  to  the 

550 


FORMS   AND   PRECEDENTS. 


working  and  development  of  the  same,  to  carry  on  any  business,  whether  manufac- 
turing or  otherwise,  which  the  corporation  may  think  calculated  directly  or  indi- 
rectly to  eft'ectuate  these  objects. 

Conduct  business  in  any  of  the  States,  Territories,  colonies,  or  dependencies  of 
the  United  States,  in  the  District  of  Columbia,  and  in  any  and  all  foreign  countries; 
to  have  one  or  more  offices  thereiu,  and  to  hold,  purchase,  and  convey  and  mortgage 
real  and  personal  property  without  limit  as  to  amount  thereiu,  but  always  subject  to 
the  laws  tliereof. 

Remunerate  any  person  or  corporation  for  services  rendered,  or  to  be  rendered 
in  placing  or  assisting  to  place  or  guaranteeing  the  placing  of  any  of  the  shares  of 
the  capital  stock  of  the  corporation,  or  any  debentures  or  other  securities  of  the 
corporation,  or  in,  or  about  the  formation  or  promotion  of  the  corporation,  or  iu 
the  conduct  of  its  bus  ness. 

Subject  to  the  provisions  of  law,  purchase,  hold,  and  reissue  the  shares  of  its 
capital  stock. 

Do  any  and  all  the  things  herein  set  forth  to  the  same  extent  as  natural  persons 
might  or  could  do,  and  in  any  part  of  the  world. 

In  general,  the  corporation  may  carry  on  any  otlier  business  in  connection  with 
the  foregoing,  whether  manufacturing  or  otherwise,  and  have  and  exercise  all  the 
powers  conferred  by  the  laws  of  New  Jersey  upon  corporations  formed  under  the 
act  hereinafter  referred  to ;  it  being  hereby  expressly  provided  that  the  foregoing 
enumeration  of  s[)ecific  powers  shall  not  be  held  to  limit  or  restrict  in  any  manner 
the  general  powers  of  the  corporation. 

AiiTiCLE  3.  The  corporation  sliall  be  authorized  to  issue  capital  stock  to  the 
extent  of  two  hundred  thousand  dollars  (S200JD00),  divided  into  two  thousand 
shares  of  tlie  jjar  value  of  one  hundred  dollars  ($100)  each. 

Article  4.  In  furtherance  and  not  in  linutation  of  the  powers  conferred  by 
statute,  the  Board  of  Directors  arc  expressly  authorized : 

To  hold  their  meetings,  to  have  one  or  more  offices,  and  to  keep  the  books  of 
the  Company  within  or  without  the  State  of  New  Jersey,  at  such  i.hicts  as  may  be 
from  time  to  time  designated  bv  them;  but  the  Company  siiall  always  keep  at  its 
principal  and  registered  office  in'New  Jersey,  a  transfer  book  in  wiiicii  the  transfers 
of  stock  can  be  made,  entered,  and  registered,  and  also  a  book  containnig  the  names 
and  addresses  of  the  stockholders,  and  tlie  number  of  shares  held  by  tliem  respec- 
tively, which  shall  be  at  all  times  during  the  business  hours  open  to  the  inspcclion 
of  the  stockholders  in  person. 

To  determine  from  time  to  time  whether,  and,  if  allowed,  under  wliat  conditions 
and  refulations  the  accounts  and  books  of  the  Company  (other  than  the  stock  and 
transfeT  books)  or  any  of  them  shall  be  open  to  the  inspection  of  the  stockholders, 
and  the  stockholders'  rights  in  this  respect  are,  and  shall  be  restricted  or  linuted 

accordingly.  ,    ,      ^  r    .i  i 

To  make,  alter,  amend,  rescind  the  by-laws  of  the  Company,  to  fix  llie  amount 
to  be  reserved  as  working  capital,  to  (Ix  the  times  for  the  declaration  and  payment 
of  dividends,  to  aulho.i/.c  and  cause  to  be  executed  mortgages  and  lu-ns  upon  the 
real  and  personal  projierty  of  the  Company,  provided  always  that  the  majority  of 
the  whole  Hoard  concur  therein.  ,    ,     „       ,         ,  •.  i , 

By  a  resolution  passed  bv  a  majority  vole  of  the  wh<ile  Bonnl,  under  suitable 
provision  of  the  bv-laws.  to  designate  two  or  more  of  their  number  to  eonstitute  an 
Executive  Committee,  which  Committee  shall  for  the  time  being.  a.s  provided  lu 
said  resolution,  or  in  the  bv-laws.  have  and  exerrisc  any  and  all  liie  powers  of  (lie 
Board  of  Dinetoi-s  which  niav  be  lawfully  delegated  in  the  immagemenl  ot  the  hiisi- 
ness  and  alfairs  of  the  Company,  and  shall  have  power  to  aullionze  the  seal  of  the 
Company  to  be  affixed  to  all  papers  whieh  may  require  it.  .       r  .i 

Willi  the  consent  in  writing  and  pursuant  also  to  the  nffirmalive  vote  of  the 
holders  of  the  majority  of  the  stock  issm'd  and  outslandii.i:.  at  a  stockliold.Ts 
mectine  duly  called  f..r  that  purpose,  to  s.-Il,  assign,  In.nsf.T.  or  otherwise  <lisp.|sc 
S  thM»r'M'"'v  ^'f  »»•••  C-mpaiiy  ns  an  entirety,  provided,  always,  that  the  majority 
of  the  wliole  Board  coiK-ur  tiierein.  .  i  .    i    .  c.  »„ 

The  Company  may  apply  and  use  its  surplus  earnings  or  accumulated  profits  to 

551 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 

the  purohasc  or  acquisition  of  property,  and  to  tlic  acquisition  and  purchase  of  its 
own  capital  stock  iVoni  time  to  time,  to  sucli  extent  and  in  such  manner,  and  upon 
such  terms  as  its  Board  of  Direetin-s  may  determine  ;  and  neither  the  propcrtj  nor 
capilal  stock,  so  purchased  or  accpiired  shall  he  retj'arded  as  profits  for  the  ])urpose 
of  deelaralion  or  payment  of  dividends,  unless  otherwise  determinctl  by  a  majority 
of  the  Hoard  of  Directors. 

Tlie  cor|Hiration  reserves  the  riglit  to  amend,  alter,  or  repeal  any  i)rovision  con- 
tained in  this  certificate  of  incorporation,  in  the  manner  now  or  hereafter  prescribed 
by  statute,  and  all  rights  conferred  to  stockholders  arc  granted  subject  to  this 
rescrvatit)!!. 

All  disputes  between  members  of  the  corporation,  or  between  it  and  its  patrons, 
shall  be  settled  by  !ubitration  ;  the  party  claimant  delivering  personally  or  by 
United  States  mail  to  the  party  defendant  at  his  home  or  ])lace  of  busmess,  the  claim 
veriiied  l)y  affiilavit,  to  which  claim  the  party  defendant  shall  have;  sixty  days  to 
reply.  The  parly  claimant  may  then  appoint  an  arbitrator,  giving  written  notice 
thereof  to  the  party  defendant,  who  shall  within  ten  days  ai)])oint  the  second  arbitra- 
tor, or  the  first  arbitrator  shall  then  make  such  appointment,  botii  of  said  arbitrators 
to  be  versed  in  the  sul)jeet  matter  of  dispute  ;  said  two  arbitrators  shall  then  appoint 
the  third  who  shall  be  learned  in  the  law  and  shall  preside  over  the  Board,  whose 
bearings  shall  be  held  at  such  time  and  place  as  may  be  fixed  by  the  Board.  Upon 
due  notice,  the  parties  shall  submit  in  writing  to  said  arbitrators  all  the  facts  verified 
by  affidavit,  and  may  be  heard  by  counsel.  The  decision  of  said  arbitrators,  or  a 
majority  of  them,  shall  be  final  and  conclusive  and  without  appeal.  If  the  award  is 
not  settled  or  complied  with  within  twenty  days,  the  successtul  party,  if  the  award 
is  for  money,  may  file  the  same  in  the  Court  having  jurisdiction  and  proceed  to  ex- 
ecution and  sale  in  the  usual  course  for  the  enforcement  of  said  award  ;  or,  in  case 
the  award  is  in  equity,  the  successful  party  may  file  a  bill  reciting  only  these  pro- 
ceedings and  the  award,  and  praying  for  the  aid  of  said  Court  to  enforce  compliance 
therewith. 

Article  5.    (Clause  designating  office  and  agent  in  New  Jersey.) 

In  accordance  with  an  Act  of  the  Legislature  of  the  State  of  New  Jersey  entitled 
"  An  Act  Concerning  Corporations"  (Revision  of  1896)  and  the  Acts  amendatory 
thereof  and  supplemental  thereto,  for  the  purpose  of  forming  a  corporation  of  un- 
limited duration  to  do  business  within  and  without  the  State  of  New  Jersey,  the 
undersigned  do  respectively  subscribe  for  the  capital  stock  with  which  the  corpora- 
tion will  begin  business,  and  do  agree  to  take  the  numl)er  of  sliares  set  opposite 
our  names,  and  have  accordingly  signed  this  certificate  and  affixed  our  seals  thereto. 

No.   of  Shares 
Name.  taken  by  each  Subscriber.  Amount 


CERTIFICATE  OF  INCORPORATION 

OF 

Brokerage  Company  (New  York  Charter). 

We,  the  undersigned,  being  all  persons  of  full  age,  all  being  citizens  of  the 
United  States  and  all  residents  of  the  State  of  N(!W  York,  desiring  to  form  a  Stock 
Corporation  pursuant  to  the  provisions  of  the  Business  Corporations  Law  of  the 
State  of  New  York,  do  hereby  make,  sign,  acknowledge,  and  file  this  certificate  for 
that  purpose  as  follows. 

Name. 

First.   The  name  of  the  proposed  corporation  is : 

Objects. 

Second.   The  purposes  for  which  it  is  formed  are  to  buy,  sell,  negotiate,  exchange 
pledge,  trade,  and  deal  in  and  with  shares,  stocks,  debentures,  scrip,  bonds,  and  se- 
552 


FORMS   AND   PRECEDENTS. 

curities  of  any  governmeut,  State,  or  public  or  private  corporation,  or  any  corporate 
body  ;  to  trade  and  deal  in  and  with  real  estate,  mines,  metals,  minerals,  and  oil, 
cotton,  grain,  produce,  or  other  commodities;  to  invest  in  any  or  either  of  the  fore- 
going, and  from  time  to  time  to  change  the  investments  of  the  Company;  to  mort- 
gage, pledge,  or  otherwise  charge  all  or  any  part  of  the  investments  of  the  Company 
or  its  property  and  rights  ;  lo  make  advances  on,  sell,  or  dispose  of  any  property  or 
investments ;  or  to  act  as  agent,  factor,  or  broker  for  any  or  either  of  the  corporate 
purposes ;  lo  purchase  or  otherwise  acquire  the  capital  stock,  shares,  debentures, 
scrip,  bonds,  or  other  evidences  of  indebtedness  of  any  other  corporation,  and  to  issue 
and  exchange  its  own  stock,  shares,  bonds,  debentures,  scrip,  or  other  evidences 
of  indebleaness  in  payment  therefor,  and  while  tlie  owner  thereof  to  exercise  all  the 
rights  of  ownership,  including  the  power  to  vote  upon  such  stock  or  shares  ;  to  pur- 
chase, receive,  hold,  and  own  mortgages,  debentures,  shares,  and  other  securities  or 
obligations  of  any  public,  private,  or  municipal  corporation,  or  bonds  or  other  securi- 
ties or  obligations  of  the  Guvcrnment  of  the  United  States,  or  of  any  State,  district, 
territory,  c.ilony,  or  dependency  of  the  United  States  or  of  any  foreign  country,  State, 
or  colony  ;  to  collect  and  receive,  disburse  and  dispose,  of  all  interest,  dividends,  ac- 
cumulations, earnings,  and  income  from,  upon,  or  on  account  of  any  bonds,  deben- 
tures, stocks,  shares,  securities,  contracts,  evidences  of  debt,  obligations,  or  other 
property  held  or  owned  by  the  corporation  thereto ;  to  do  any  ami  all  lawful  acts 
tending  to  increase  or  enhance  the  value  of  the  property  of  the  Company  ;  to  issue 
stock,  shares,  bonds,  debentures,  certificates,  scrip,  or  other  corporate  obligations,  and 
to  secure  the  payment  thereof  by  mortgage,  pledge,  or  deed  of  trust  of  or  upon  the 
whole  or  any  portion  of  the  corporate  property  or  funds  ;  to  sell,  pledge,  or  ot  herwise 
dispose  of  bonds,  debentures,  or  other  corporate  obligations  for  projier  and  lawful  cor- 
porate purposes,  as  and  when  the  Board  of  Direct(jrs  shall  deem  necessary,  advisable, 
or  expedient;  to  promote  the  corporate  business  of  investment  and  dealing  in  secur- 
ities in  all  lawful  ways  ;  and  to  receive,  collect,  transmit,  |iay  out,  and  disburse  funds 
in  the  course  of  its  business  ;  and  to  the  extent  authorized  by  law  to  lease,  ])ur- 
chase,  or  otherwise  acquire,  hold,  use,  sell,  trade,  and  deal  in  and  with,  assign,  pledge, 
mortgage,  transfer,  and  convey  real  and  personal  property  of  any  name  or  nature,  ex- 
cepting bills  of  exchange,  gold  or  silver  bullion  ;  to  deal  in  foreign  exchange,  to  issue 
and  acce])t  drafts  and  bills  of  exchange;  to  issue  promissory  notes,  scrip,  drafts, 
acceptances,  or  other  corporate  obligations,  and  negotiate  the  same. 

Generally  to  purchase,  take  on  lease  or  in  exchange,  hire,  or  otherwise  acquire 
any  real  or  personal  ))roperty,  and  any  rights  or  privileges  which  the  Company  may 
deem  useful,  necessary,  desirable,  pro])er,  or  convenient  for  the  purposes  of  its 
business  or  iu  the  development  or  extension  thereof. 

Amount  of  Caimtai-  Stock. 

Third.  The  amo\int  of  capital  slock   is  dollars  (?  ).    The  amount 

of  capiUd  with  which  tha  Company  will  begin  busiiu-ss  is  dollars. 

NuMnKR  OK  Sharks. 

Fourth.  The  number  of  shares  of  which  the  aforesaid  capital  shall  consist 
is  shares  of  the  par  value  of  8  each.  shares  thereof  shall  be 

preferred  stock,  and  shares  thereof  shall  be  common  stock,    'riu-  prefern-d 

stock  shall  be  entitled,  in  preference  to  the  common  stock,  t^)  cumulative  dividends 
at  the  rate  of  per  cent  jiayable  yearly,  half  yearly,  or  ciuarlcrly.     DividendH  on 

the  comii\on  slock  shall  not  be  paid  except  when  all  dividemls  lo  which  the  preferred 
stock  is  entitled  at  fidl  rai4!  to  dali-  are  paid  or  set  apart  for  payment,  and  ImiIIi 
classes  of  stock  shall   share  enually  in  any  addition  to  tin-  |ir<ilils  ol  any  fiM-al  year 


pf  the  Company  in  excess  of  tlie  dividend  reipiin-d  to  be  paid  on  llu-  prcfern-d  st4»ck 
and  *|)ercent  ujKtn  the  conmion  slnek.     Sueli  excess  dividi-nd  shall  nol  be 

offset  aijainst  any  subsequent  dividend  u|i«n  the  iireferred  slock  thereafter,  as    " 
dividends  shall  be  the  same  as  if  such  excess  dividends  had  nol  been  nuule.     A 


sail 


INCOnrORATION    AND    ORGANIZATION    OP    CORPORATIONS. 

distribution  of  assets  otiier  than  prolils  shall  bo  paid,  as  far  as  the  same  will  go, 
liist  ujion  tlio  pri'forrod  stick  to  the  aiuonat  thereof,  and  its  per  cent  cu- 

mulative dividends  that  are  unpaid  if  any,  less  the  amount  i)aid  tlicreon,  iu  any  previ- 
ous distribution  of  such  assets  ;  next  npon  the  conunon  stock,  to  the  amount  of  the 
par  liiereon,  less  the  amount,  if  any,  paid  tliereon  in  any  previous  distribution  of 
such  assets,  and  then  npon  the  two  classes  of  stock  equally  per  share. 

Principal  Office. 

Fiffh.  The  principal  oiTice  of  this  Corporation  is  to  be  located  in  the  Borough 
of  MauhaltaUj  iu  the  City,  County,  and  State  of  New  York. 

Duration. 
Sixth.    Its  duration  is  to  be  perpetual. 

Number  of  Directors. 

Seventh.    The  number  of  its  Directors  is  to  be 

DiRECTOUS   FOR   TUE   FlRST   YeAR. 

Eighth.  The  names  aud  post-office  addresses  of  its  Directors  for  the  first  year 
are  as  follows : 

Names.  Post-Office  Addresses. 

Subscribers  to  Capital  Stock. 

Ninth.  The  names  and  post-office  addresses  of  the  subscribers,  aud  the  number 
of  shares  which  each  agrees  to  take  in  the  corporation  are  as  follows  : 

Tenth.  The  Directors  need  not  be  stockholders  of  the  corporation.  A  majority 
of  the  stockholders  shall  be  necessary  to  constitute  a  quorum  for  the  transaction  of 
business  at  any  meeting  of  tiie  Board,  but  a  less  number  may  adjourn  sucii  meeting. 
All  Directors  shall  hold  office  until  the  election  of  their  successors,  and  Directors 
shall  not  be  subject  to  removal  during  their  respective  terms. 

Vacancies  iu  the  Board  of  Directors  may  be  filled  by  the  remaining  Directors, 
provided  there  is  present  at  the  meeting  at  which  such  vacancy  is  tilled  a  majority 
of  the  full  Board  of  Directors  as  authorized  by  the  certiticate  of  incorporation. 

The  Directors  may  hold  their  meetings,  have  an  office,  and  keep  the  books  of  the 
corporation,  except  the  slock  book,  outside  the  State  of  New  York. 

Tiie  Board  of  Directors  by  the  affirmative  vote  of  a  majority  of  the  whole  Board 
may  ap|)oint  an  Executive  Committee  of  three  members  of  the  Board,  of  whom  a 
majority  shall  constitute  a  quorum.  Such  Executive  Committee  shall  have  any  and 
all  powers  of  the  full  Board  of  Directors  which  may  be  lawfully  delegated.  The 
term  of  office  of  each  member  of  such  Committee  shall  continue  until  the  expiration 
of  his  term  as  Director  and  until  his  successor  shall  be  elected :  vacancies  in  this 
committee  shall  be  fdled  by  the  Board  of  Directors. 

By-laws  may  be  made  by  the  Board  of  Directors  except  as  otherwise  provided 
by  law,  and  may  be  altered  in  such  manner  as  may  be  therein  ])rovided. 

Stockholders  shall  have  no  right  cxce[)t  as  conferred  by  statute  or  by  the  by-laws 
of  the  corporation  to  ins[)ect  any  books,  papers,  or  accounts  of  the  corporation.  The 
transfer  books  of  the  corporation  may  l)e  closed  by  order  of  the  Board  of  Directors 
or  the  Executive  Connnittee  for  tliirty  days  or  any  shorter  time,  before  any  meeting 
of  the  stockholders  and  until  the  day  after  the  fhial  adjournment  of  such  meeting. 

In  IFitness  Whereof,  we  have  made,  signed,  acknowledged,  and  filed  this  certificate. 
Dated,  February    ,  190  . 


154 


FORMS   AND   PRECEDENTS. 

CERTIFICATE  OF  INCORPORATION. 

Trust  and  Investjiknx  Company  (Delaware  Charter). 

This  is  to  Certify,  that  the  undersigned  do  hereby  associate  themselves  to 
establish  a  corporation  under  and  by  virtue  of  the  provisions  of  an  Act  of  the 
General  Assembly  of  the  State  of  Delaware,  entitled  "  An  Act  Providing  a  General 
Corporation  Law,"  and  do  severally  agree  to  taJ;e  the  aumber  of  shares  of  capital 
stock  as  Uereiuafter  stated,  and  that 

First. 
The  name  of  the  corporation  is  Company. 

Second. 

The  principal  office  or  place  of  business  of  the  corporation  in  the  State  of  Dela- 
ware is  to  be  located  in  the  City  of  Wilmington,  New  Castle  County,  and  said 
office  is  to  be  registered  witli 

T/iird. 

The  nature  of  the  business  and  the  objects  and  purposes  proposed  to  be  trans- 
acted, promoted,  or  carried  on  by  the  corporation  are  as  follows  : 

To  carry  on  a  banking  and  trust  comnany  business,  and  in  connection  there- 
with to  discount  bills,  notes,  and  other  evidences  of  indebtedness  ;  to  receive  and  pay 
out,  with  or  without  interest,  or  receive  on  special  deposit  money,  bullion  or 
foreign  coin,  stocks,  bonds,  or  other  securities  ;  to  buy  and  sell  foreign  and  domes- 
tic exchange,  gold  and  silver  bullion,  foreign  coins,  bonds,  stock,  bills  of  exchange, 
notes,  and  other  negotiable  paper ;  and  to  lend  money  on  personal  security.  To 
act  as  trustee  for  individuals  and  corpf)rations. 

To  carry  on  and  undertake  any  business,  undertaking,  transaction,  or  operation 
commonly  carried  on  or  undertaken  by  capitalists,  ])romoters,  financiers,  contrac- 
tors, inereiiants,  commission  men  and  ai,'ciits,  and  in  the  cimrse  of  sueli  business  to 
draw,  accept,  endorse,  acquire,  and  sell  all  or  any  negotiable  or  transferahle  instru- 
ments and  securities,  including  debentures,  bonds,  notes,  and  bills  of  exchange. 
To  issue  on  commission,  subscribe  for,  acquire,  hold,  sell,  exchange,  and  deal  in 
shares,  stocks,  bonds,  obligations,  or  securities  of  any  public  or  private  corporation, 
government,  or  inunieiitality,  and  the  Company  shall  have  express  nower  to  hold, 
purchase,  or  otherwise  aeauire,  to  sell,  assign,  transfer,  mortgage,  pledge,  or  otber- 
wise  dispose  of  shares  of  tlie  capital  stock,  bonds,  debentures,  or  other  evidences  of 
indebtedness  created  by  any  other  corporation  or  corporations,  and  while  the 
owner  thereof  to  exercise  all'the  rights  and  privileges  of  ownership,  including  the 
right  to  vote  thereon. 

To  form,  |)roiiiote,  and  assist  financially  or  otherwise  companies,  syndicates, 
partnerships,  and  associations  of  all  kinds,  and  to  give  any  pmirantee  in  coniiretion 
therewith  or  otherwise  for  the  ]mymenl  of  money,  or  for  the  performance  of  any 
obligation  or  undertaking.  To  aefiuiic,  improve,  manage,  work,  develop,  exercise 
all  rights  in  respect  of,  lease,  mortgage,  sell,  dispose  of,  turn  to  aeeouiit  and  otlier- 
wise  d<!al  with  properly  of  all  kinds,  and  in  parlieulnr  business  eoneeriis  mid 
undertjikings.     To  act  a.s  liseal  agnit  for  itersons,  firms,  and  corporations. 

To  buv,  or  otherwise  acquire,  to  hold,  own,  mortgage,  jiledge.  .sell,  n.s.sign.  nnd 
transfer,  or  otherwise!  dispose  of,  and  to  invest,  trade  in,  and  dial  in  niiy  k'oods, 
wares,  and  merchandis.-  and  property  of  every  class  nnd  deseriplioii.  including 
patents  and  j)atcnt  rights,  invent i<ms  or  other  im|)rovcment.s,  trade  marks,  options, 
shares  or  rights  in  cor|iorationH,  real  pro|KTly  of  any  deseri|ilion.  inelmling  mines, 
railroads,  and  also  bond.s,  mortgagf^.s.  .securities  of  any  kind  or  drseription,  or  other 
evidences  of  indebtedness,  and  investment's  or  invest ment  wtrnritK-s  of  any  kind  or 
descri|)tion  whatsoever,  to  act  as  llie  aitent  for  the  sale  or  i)urrliaH,-  of  any  of  tlin 
same,  or  for  any  other  purpose  eonnceted  with  any  of  Ihr  said  Mlinve-descnbed 
powers;  to  promote  corporate  enterprises  of  any  kind,  nicludmg  induslrial  cuter- 

555 


INCORPORATION    AND  ORGANIZATION  OF   CORPORATIONS. 

prises,  railroails,  luiiics,  rciil  estate  companies,  bauking  institutions,  and  all  busi- 
nesses or  enterprises  of  any  character,  and  to  own  and  operate  or  iinance  the  same  ; 
to  aid  in  any  manner  any  corporation  or  enteri)rise  in  wliieli  the  Company  is 
interested;  to  endorse,  underwrite,  or  guarantee  stock,  securities,  or  undertaking 
of  any  corjioration  or  persons. 

To  raise  money  by  the  issue  of  shares  or  otherwise,  and  to  invest  the  moneys  so 
raised  in  the  purchase  of,  or  otherwise  to  acquire  and  hold  any  of  the  inveslnients 
following,  that  is  to  say,  any  stocks,  bonds,  debentures,  shares,  scrip,  or  securities 
issued,  or  liaving  any  guarantee  by  any  governnuMit,  municipality,  trust,  local 
authority,  or  other  body,  incorporated  or  unincorporated,  pid)lic  or  j)rivate,  of  the 
United  States,  or  in  any  country  or  State  under  the  ])rotection  uf  the  United  States, 
or  any  stock,  bonds,  debentures,  shares,  scrip,  or  securities  issued  or  having  any 
guarantee  by  any  corporation  or  company  incorporated,  constituted  or  carrying  ou 
business  in  the  United  States  or  elsewiierc. 

To  borrow  or  raise  money  by  the  issue  or  sale  of  any  bonds,  mortgages,  deben- 
tures, or  debenture  stock  of  the  Company,  and  to  invest  any  money  so  raised  in  any 
such  investments  as  aforesaid. 

To  acquire  any  s\ich  investments  as  aforesaid  by  original  subscription,  under- 
writing, participation  in  syndicates  or  otherwise,  and  wdiether  or  not  fully  paid  up, 
and  to  make  payments  thereon  as  called  for,  or  in  advance  of  calls  or  otherwise, 
and  to  underwrite  or  subscribe  for  the  same  conditionally  or  otherwise,  and  either 
with  a  view  to  investment  or  for  re-sale  or  otherwise,  and  to  vary  the  investments 
of  the  Company,  and  generally  to  sell,  exchange,  or  otherwise  dispose  of,  deal  with, 
and  turn  to  account  any  of  the  assets  of  the  Comjjany. 

To  negotiate  loans,  to  offer  for  public  sul)scri])tion,  or  otherwise  aid  or  assist  in 
placing  any  such  investments  as  aforesaid  ;  to  give  any  guarantee  in  relation  to  any 
such  investments  issued  by  or  acquired  through  the  Company  or  otherwise. 

To  otfer  for  imblie  subscription  any  shares  or  stock  in  the  capital  of,  or  deben- 
tures or  debenture  stock  or  other  securities  of,  or  otherwise  to  establish  or  promote, 
or  concur  in  establishing  or  promoting,  any  company,  association,  undertaking,  or 
public  or  private  body. 

To  guarantee  the  payment  of  dividends  or  interest  on  any  stock  shares,  deben- 
tures, or  other  securities  issued  by,  or  any  other  contract  or  obligation  of  any  such 
company,  association,  undertaking,  or  public  or  private  body. 

To  purcliase,  lease,  hire,  or  otherwise  acquire  real  and  personal  property,  im- 

{)roved  and  unimproved,  of  every  kind  and  description,  and  to  sell,  dispose  of, 
ease,  convey,  and  mortgage  said  property,  or  any  part  thereof ;  to  acquire,  hold, 
lease,  manage,  operate,  develop,  control,  build,  erect,  maintain  for  the  purposes  of 
said  Company,  construct,  reconstruct,  or  purchase  cither  directly  or  through 
ownersliip  of  stock  in  any  corporation,  any  lands,  buildings,  offices,  stores,  ware- 
houses, mills,  shops,  factories,  ])lants,  gas  houses,  machinery,  rights,  easements, 
permits,  privileges,  franchises,  and  licenses,  and  all  other  things  which  may  at  any 
time  be  necessary  or  convenient  in  the  judgment  of  the  Board  of  Directors  for  the 

Purposes  of  the  Company.     To  sell,  lease,  hire,  or  otherwise  dispose  of  the  lands, 
uildings,  or  other  property  of  the  Company  or  any  part  thereof. 

To  hold,  purchase,  or  otherwise  acquire,  to  sell,  assign,  transfer,  mortgage, 
pledge,  or  otherwise  dispose  of  shares  of  the  ca])ital  stock  and  bonds,  debentures,  or 
other  evidences  of  indebtedness  created  by  other  corporation  or  corporations,  and 
■while  the  holder  thereof,  to  exercise  alf  the  rights  and  privileges  of  ownership, 
including  the  right  to  vote  thereon. 

To  conduct  its  business,  and  have  one  or  more  offices,  and  unlimitedly  and 
without  restriction  to  hold,  purchase,  lease,  mortgage,  and  convey  real  and  personal 
proyjcrty  in  or  out  of  this  State,  and  in  such  ])lacc  and  places  in  the  several  States, 
Territories,  colonial  possessions,  or  territorial  acquisitions  of  the  United  States,  as 
shall  from  time  to  time  be  found  necessary  and  convenient  for  the  purposes  of  the 
Company's  business. 

///,   Qpiipral,  to  carry  on  any  other  business  in  connection  therewith,  whether 
manufactunng  or  otherwise,  and  with  all  the  powers  conferred  by  the  laws  of 
Delaware  under  the  act  hereinbefore  referred  to. 
55G 


FORMS    AND    PRECEDENTS. 

It  is  the  intention  that  the  objects  specified  in  the  third  paragraph  shall,  except 
where  otherwise  expressed  in  said  paragraph,  be  nowise  limited  or  restricted  by 
reference  to  or  inference  from  the  terms  of  any  other  clause  or  paragraph  in  this 
charter,  but  that  the  objects  specified  in  each  of  the  clauses  of  this  paragraph  shall 
be  regarded  as  independent  objects. 

Fourth. 

The  amount  of  the  total  authorized  capital  stock  of  the  corporation  is 
dollars  (S  ),  divided  into  shares  of  the  par  value  of  dollars 

each.     The  amount  of  capital  with  which  the  corporation  will  begin  business  is 
dollars. 

Fifth. 

The  names  and  places  of  residence  of  the  original  subscribers  to  the  capital  stock 
are : 

Names.  Residences.  No.  of  Shares. 

Sixth. 
The  corporation  shall  have  perpetual  existence. 

Seventh. 
The  private  property  of  the  stockholders  shall  not  be  subject  to  corporate  debts. 

Eighth. 

The  officers  and  persons  by  whom  the  afl'airs  of  the  corporation  are  to  be  con- 
ducted are  its  Directors,  who  may  act  through  a  President,  Vice-President,  Secre- 
tary, and  Treasurer,  and  such  assistants  to  them  and  subordinate  officers,  agents,  and 
emiployes  as  may  be  selected  pursuant  to  the  by-laws  of  the  corporation,  the  resolu- 
tion of  said  Directors,  or  authority  given  by  them. 

Directors  shall  be  elected  at  the  principal  office  or  place  of  business  of  the  Com- 
pany at  the  annual   election  to  be  held  by  the  stockholders   on   the  first 
in  in  each  year  between  the  hours  of        A.  M.  and         P.  M. 

Ninth. 

The  Board  of  Directors  shall  have  power  without  the  assent  or  vote  of  the 
stockholders  to  make,  alter,  amend,  and  repeal  the  by-laws  of  this  corporation, 
to  autiiorize  and  cause  to  be  executed  mortgages  and  liens  upon  the  real  and 
personal  property  of  this  corporation. 

The  Directors  shall,  from  time  to  time,  determine  whether  and  to  what  extent 
and  at  what  times  and  places  and  under  what  conditions  the  accounts  and  books  of 
the  corporation  or  any  of  them  shall  be  open  to  the  inspection  of  the  stockholders; 
and  no  stockholder  shall  have  any  right  to  inspect  any  account  or  book  of  the  cor- 
poration except  as  conferred  by"  statute  or  authorized  by  the  Directors,  or  by  a 
resolution  of  the  stockliolders. 

The  Directors  shall  have  power  to  hold  their  meetings,  and  to  keep  the  books  of 
the  corporation  (except  the  stf)rk  and  transfer  Iwoks)  outside  of  the  State,  at  such 
places  as  may  be  from  time  to  time  designated  by  them. 

The  cor])oration  may  conduct  its  business  in  the  Slate  of  Delaware,  in  other 
States,  the  District  of  Columl)ia,  the  Territories  and  Colonies  of  tlic  l'nil<'d  Slat«-9 
and  in  foreign  countries,  and  may  have  one  or  more  offices  out  of  this  Stale,  and 
may  hold,  piircliase,  mortgage,  lease,  aud  coavcy  real  and  personal  property  out  of 
the  State  of  Delaware. 

Wiltmrnxx  hands  and  seals  this  day  of         ,  I'JO  . 


In  presence  of : 

557 


INCOnrORATION    AND    ORC. ANIZATION    OF   CORPORATIONS. 
CERTIFICATE  OF  INCORPORATION 

OF 

Oil  Company  (South  Dakota  Charter). 

Know  all  Mkn  by  these  Presents  :  Tliat  wc,  the  undersigned, 

,  for  ourselves,  our  associates  and  successors,  have  associated 
ourselves  together  for  the  purpose  of  forming  a  corporation  under  and  by  virtue  of 
the  statutes  and  laws  of  the  State  of  South  Dakota,  and  we  do  hereby  certify  and 
declare  as  follows,  to  wit : 

Firsf. 
The  name  of  this  corporation  shall  be  : 

Second. 

The  purposes  for  which  and  for  each  of  which  the  corporation  is  formed  are  as 
follows : 

To  purchase  or  otherwise  acquire  in  the  State  of  and  other  parts  of 

the  world,  lands  containing  or  believed  to  contain  petroleum  and  other  oil  springs 
or  deposits. 

To  carry  on  the  business  of  producing,  refining,  storing,  supplying,  and  distribu- 
ting petroleum  ])roduets  in  all  its  branches  ;  also  to  refine,  store,  and  sell  vegetable 
oils  and  animal  oils.  To  construct,  purchase,  lease,  operate,  and  maiiitain  pipe- 
lines and  tanks  for  the  distribution  and  storage  of  oil. 

To  purchase,  sell,  exchange,  lease,  or  otherwise  acquire  real  or  personal  property 
of  all  kinds  in  tlie  United  States  of  America  or  elsewhere,  and  in  particular  lands, 
oil  wells,  refineries,  mines,  mining  rights,  minerals,  or  buildings,  machinery, 
plants,  stores,  licenses,  concessions,  rights  of  way,  light  or  water,  and  any  rights  or 
privileges  which  may  seem  to  the  Directors  convenient  with  reference  to  the  busi- 
ness of  the  Company,  and,  whether  for  the  purpose  of  re-sale,  realization,  or  other- 
wise, to  manage,  develop,  lease,  mortgage,  or  otherwise  deal  with  the  whole  or  any 
part  of  such  property  or  rights. 

To  prospect,  explore,  develop,  maintain,  and  carry  on  all  or  any  lands,  wells, 
mines,  or  miuiiig  rights,  minerals,  ores,  works,  or  other  properties  from  time  to 
time  in  the  possession  of  the  Company  in  any  manner  deemed  desirable ;  to  erect 
all  necessary  or  convenient  refineries,  mills,  works,  machinery,  laboratories,  work- 
shops, dwelling  houses  for  workmen  and  others,  and  other  buildings,  works,  and 
appliances,  and  to  aid  in  or  subscribe  towards  or  subsidize  any  such  objects. 

To  clear,  manage,  farm,  cultivate,  plant,  and  otherwise  explore,  work,  or  nnprove 
any  land  which  or  any  interest  in  which  may  belong  to  the  Company  ;  and  to  deal 
with  or  otherwise  turn  to  account  any  farm  or  other  products  of  any  such  land. 

To  construct,  maintain,  alter,  make,  acquire,  charter,  lease,  hire,  or  work  private 
railways,  tramways,  wagons,  private  telegraph  lines,  telephones,  steamers,  ships, 
pipe  lines,  docks,  reservoirs,  wells,  aqueducts,  works,  private  roads,  streets,  hotels, 
dwelling  houses,  factories,  shops,  stores,  gas  works,  pier  barges,  boats,  wharves, 
and  other  works,  plants,  or  machinery  of  every  description  ;  and  to  contribute  to 
the  cost  of  making,  providing,  carrying  on,  and  working  the  same ;  to  enter  into 
contracts  or  arrangements  with  any  municipal  or  other  body,  corporation,  company, 
or  person,  as  to  interchange  of  traffic,  running  powers,  joint  works,  or  otherwise 
that  may  seem  to  be  expedient. 

To  carry  on  business  as  merchants,  refiners,  warehousemen,  chemists,  store- 
keepers, carriers,  shipowners,  builders,  or  contractors  in  the  United  States  of 
America  or  elsewhere,  and  any  other  business  tliut  may  seem  directly  or  indirectly 
conducive  to  tiie  development  of  any  property  of  the  Company  or  any  property  iu 
which  it  is  interested,  or  to  benefit  the  Company ;  to  acquire  by  grant,  purchase,  or 
otherwise,  concessions  of  any  property  or  privileges  from  any  government  or  from 
any  authority,  supreme,  municipal,  or  otherwise,  and  to  perform  and  fulfil  the 
conditions  thereof. 
558 


FORMS   AND    PRECEDENTS. 

To  apply  for,  obtain,  purchase,  or  otherwise  acquire  any  patents,  brevets,  inven- 
tions, licenses,  concessions,  and  the  like  in  the  United  States  of  America  or  else- 
where, conferring  an  exclusive  or  non-exclusive  or  limited  right  to  use,  or  any- 
secret  or  other  information  as  to  any  invention  or  process,  secret  or  otherwise,  that 
may  seem  capable  of  being  used  for  any  of  the  purposes  of  the  Company,  or  the 
acquisition  of  which  may  seem  calculated  directly  or  indirectly  to  benetit'tlie  Com- 
pany, and  to  use,  exercise,  develop,  grant  licenses'iu  respect  of"  or  otherwise  turn  to 
account  the  property,  rights,  and  information  so  acquired,  with  a  view  to  the  work- 
ing and  development  of  the  same,  and  to  carry  on  such  business,  whether  manu- 
facturing or  otherwise,  as  may  seem  calculated'  directly  or  indirectly  to  etTcctuale 
these  objects,  provided  that  none  of  the  powers  enumerated  above  shall  be  construed 
as  authorizing  the  Company  to  engage  in  any  business  that  comes  within  the 
provisions  of  special  statutes  in  South  Dakota. 

To  hold,  purchase,  or  otherwise  acquire,  to  sell,  assign,  transfer,  mortgage, 
pledge,  or  otherwise  dispose  of  shares  of  the  capital  stock  and  bonds,  debentures  or 
other  evidences  of  indebtedness  created  by  any  corporation  or  corporations,  and 
while  the  holder  thereof  to  exercise  all  the  rights  and  privileges  of  ownership, 
including  the  right  to  vote  thereon. 

To  have  one  ofiBce,  to  carry  on  all  or  any  part  of  its  operations  and  business,  and 
unlimitedly  and  without  restriction,  except  as  limited  by  law,  to  iiold,  purcluisc, 
mortgage,  lease,  and  convey  real  and  personal  property,  and  to  conduct  its  busi- 
ness in  any  State  or  Territory  of  tlie  United  States  and  iu  any  foreign  country  or 
place,  but  subject  always  to  the  laws  thereof. 

Third. 

The  place  where  the  principal  business  of  this  corporation  shall  be  transacted  is 
in  the  City  of  ,  State  of  South   Dakota  ;  but   the  corporation  may  have  au 

office  without  this  State  at  the  City  of  ;  and   any  meetings  of  directors, 

incorporators,  or  stockholders  of  this  Company  may  be  held  at  eitiier  of  said  offices 
or  places  of  business  ;  and  the  books  of  tliis  corporation  may  l)e  kept  at  either  of 
said  offices  or  places  of  business;  and  any  incorporator  or  stockholder  entitled  to 
be  present  and  to  A'ote  at  any  organization  or  stockholders'  meeting,  may  be 
represented  and  vote  at  such  meeting  by  proxy  in   writing. 

The  domiciliary  office  of  this  corponition  shall  be  at  the  office  of  the 
iu  the  aforesaid  City  of  ,  South  Dakota. 

Fourth. 

The  term  for  which  tliis  cor|)oration  shall  exist  shall  be  twenty  years  with  such 
right  of  renewal  for  other  and  similar  periods  as  may  now  or  hereafter  be  permitted 
under  the  laws  of  South  Dakota. 

Fifth. 

The  number  of  Directors  of  this  corporation  shall  be  ,  and  encli  Director 

shall  hold  at  least  one  share  of  stock.  The  names  and  residences  of  the  Dircelors 
who  arc  to  serve  for  the  first  year  or  until  tluir  successors  arc  elected  are  as 
follows : 

Names.  Residences. 

Sirlh. 

The  amount  of  the  capital  .stock  of  this  corporation  shall  be  and  is 
(,5  ),  divided  into  shares  of  the  par  viiiuc  of  each. 

In  IVifiirxx  U'hrreof,  we  have  hereunto  set  our  hands  and  BeaU  this  day  of 

.  I'JO  . 


559 


INCOUrOUATION    AND    OUG ANIZATIUN    OF    COUrOllATIONS. 

ARTICLES  OF  INCORPORATION 

Mixing  Company  (Nevada  Ciiarteu). 

Know  ai,l  Mkn  ry  tiif.se  Presents  :  That  wc,  tlic  uiulersigned,  have  this 
dav  vohintarily  assdciatod  ourselves  t()p:etlier  for  the  purpose  of  forming  a  corpora- 
tion under  the  laws  of  the  State  of  Nevada.     And  we  hereby  certify  ; 

First. 
The  uame  of  this  corporation  is  Company. 

Second. 

The  location  of  the  principal  office  of  this  corporation  in  the  State  of  Nevada  is 
at  of  ,  in  the  City  of  ,  County  of  ,  State  of 

Nevada. 

Third. 

The  objects  for  which  this  corporation  is  formed  are: 

To  purchase,  locate,  take  on  lease,  or  otherwise  acquire  any  mines,  mining  rights, 
and  lands  in  any  l)art  of  the  United  States,  and  any  interest  tlierein,  and  to  oj)erate, 
work,  and  develop  the  same.  Also  to  mine,  mill,  reduce,  smelt,  and  prepare  for 
market  gold,  silver,  copper,  and  other  ores,  minerals,  and  metallic  compounds. 
Also  to  carry  on  quartz,  ])laccr,  and  lode  mining  of  all  kinds  and  descriptions. 

To  construct,  purchase,  or  otherwise  acquire,  maintain,  and  operate  flumes, 
water  works,  and  irrigation  ditches  for  mining  purposes.  Also  to  purchase,  con- 
struct, lease,  operate,  and  maintain  electric  light  and  power  plants,  buildings, 
constructions,  machinery,  appliances,  and  equipments;  to  purchase,  construct, 
lease,  operate,  and  maintain  private  tramways,  private  railways,  and  private 
roadways. 

To  buy,  sell,  and  generally  deal  in,  store,  carry,  and  transport  all  kinds  of  goods, 
wares,  and  merchandise,  provisions,  and  supplies. 

To  acquire  by  discovery,  lease,  license,  bond,  option,  purchase,  franchise,  gift, 
devise,  conveyance,  agreement,  or  otherwise,  and  to  hold,  possess,  enjoy,  develop, 
and  operate  placer,  quartz,  or  lode  gold,  silver,  or  other  mines,  and  tunnels  and 
tunnelling  and  mining  property,  and  any  right,  title,  or  interest  therein,  as  also  sucii 
lands,  mills,  mill  sites,  tunnel  sites,  buildings,  fixtures,  dump  and  dump  rights, 
flumes,  pipes,  and  pipe  lines,  as  may  be  deemed  by  the  Directors  for  the  time  being 
to  be  necessary  or  proper  for  the  proper  working,  development,  exploration,  or 
enjoyment  of  tlie  Company's  properties. 

Also  to  treat  or  reduce  ores  or  minerals,  to  receive,  ship,  or  transport  ores, 
minerals,  or  supplies  to  or  from  any  part  of  the  workings  upon  the  Company's 
property,  or  for  the  accomplishment  of  any  other  purpose  for  which  the  Company 
is  formed. 

To  hold,  purchase,  or  otherwise  acquire,  to  sell,  assign,  transfer,  mortgage, 
pledge,  or  otherwise  dispose  of  shares  of  the  capital  stock,  and  bonds,  debentures, 
or  other  evidences  of  indebtedness  created  by  otiier  corporation  or  corporations, 
and  while  the  holder  thereof  to  exercise  all  the  rights  and  privileges  of  ownership, 
including  the  right  to  vote  thereon. 

To  conduct  its  business  and  have  one  or  more  offices,  and  unlimitedly  and  with- 
out restriction  to  purchase,  hold,  lease,  mortgage,  and  convey  real  and  j)crsonal 
property  in  or  out  of  this  State,  and  in  such  place  or  places  in  the  several  States 
and  Territories  of  the  United  States,  colonial  possessions,  or  territorial  acquisitions 
of  the  United  States,  and  in  foreign  countries,  as  shall  from  time  to  time  be  found 
necessary  and  convenient  for  the  purposes  of  the  Company's  business. 

The  Directors  shall  have  the  power  to  apj)oint  tliree  of  their  nund)er  as  au 
Executive  Committee.  Such  Executive  Committee  when  so  ajipointed  shall  have 
and  exercise  all  tlie  powers  of  the  full  Board  of  Directors.     The  Directors  shall 

5G0 


FORMS   AND   PRECEDENTS. 

have  power  to  adopt,  repeal,  or  amend  by-laws  without  referring  the  same  to  the 
stockholders  for  approval  or  rejection. 

Fourth. 

The  total  authorized  capital  stock  of  this  corporation  shall  be  dollars, 

divided  into  sliares  of  tlie  par  v.-lue  of  dollars  each. 

Tlie  amount  of  authorized  stock  subscribed  and  paid  up  is  dollars. 

The  capital  stock  shall  be  common  slock,  and  the  terms  upon  which  such  stock  is 
created  is  that  it  shall  be  issued  fijr  property  to  tlie  full  par  value  tliereof,  and  such 
stock  shall  be  issued  as  fully  paid  up,  and  'the  capital  stock  of  this  corporation, 
after  its  full  par  value  has  been  fully  paid  up,  or  which  has  been  issued  as  fully 
paid,  shadl  not  be  subject  to  assessment  to  pay  debts  of  the  corporation. 

Fifth. 

The  names  and  post-office  addresses  and  residences  of  each  of  the  original 
subscribers  to  the  capital  stock  of  this  corporation,  and  the  amount  subscribed  by 
each  are  as  follows  : 

Name  P.  0.  Address  No.  of  Shares.  Amount 

and  Residence.  Subscribed. 

Sixth. 
The  period  of  existence  of  this  corporation  is  unlimited. 

Setenth. 

The  members  of  the  governing  board  of  this  corporation  shall  be  styled  Dircc- 
tors,  and  shall  be  in  number. 

In   Witness  Whereof,  we  have  hereunto  set  our  hands  this  day  of  , 

190  . 

CERTIFICATE  OF  INCORPORATION 

OF 

Coal  Company  (West  Virginia  Ciiautek). 

I.  We,  the  undersigned,  agree  to  become  a  corporation  by  the  name  of 

II.  Tlie  principal  place  of  business  and  chief  works  of  said  corporation  shall  be 
located  in  the  county  of  ,  Slate  of  .  .       .     ,  ■ 

III.  The  objects  and   purposes    for  which  said  corporation  is  formed  arc  as 

follows:  .  .  ,    ^  ,      ,  ,       . 

To  purcha.se  h-asc  or  otherwise  acquire,  and  to  own,  develop,  and  mine, 
cannci,  bituinnioiis,  and  other  cal  in  the  SUde  of  and  ••Iscwherc,  and  to  pur- 

chase IfJisc,  hold,  and  sell  surface  lands  and  other  real  esiate  nocfssary  in,  or  inci- 
dent to  said  business,  and  to  bnv.  sell,  import,  export,  and  p-uenilly  d.itl  in  eannri, 
bituminous,  and  r,l  her  coal  in  said  Stale  of  and  elsewhere  in  t  he  L  iiitcd  Slates 

or  in  aiiv  forei','n  country. 

To  purchase,  lease,  or  otiierwise  acquire,  ronstruel,  niainlaiii,  and  oiK«mle  nil  mc- 
essarv  i.rivat.r  railn.ads  sidings,  and  tniuiwnvs,  ami  to  mauufueture.  I)uy.  s.-ll   import 
export,  and  u-emTallv  deal  in  eoke.w.od.  lumbrr.nnd  anvaud  .-.ll  l.v  products  orcaniiH, 
bituminous,  and  other  coal.  an<l  to  purchase.  lease,  build,  s.li.  n.aint.in.  an.l  op.-ra  c 

stores,  shops,  warehouses,  dwellings,  and  all  other  bui iRs  and  strurlurrs.  and  to 

buy  sell,  and  f,"-i"TalIv  <leal.  at  wholesale  or  r.-tail,  in  merehnndise  of  all  kinds  and 
descrii.tioiiH  neecssarvor  convenient  f(.r  earrvinu'  ou  its  said  business. 

To  purchase  or  otherwise  aequirc.  and  to  hol.l.  s.ll.  assii,Mi.  transfer.  mort|mffO. 
nled-e  or  otherwise  dispose  of  shares  of  the  c.-mital  sloek  an.l  b.mds.  .iebe.dures,  or 
Lther  evidences  of  indebtedness  created  by  other  cori«.niti<,n  ..r  corpondK.iis.  and 

.36  ^^'^ 


INCORPORATION  AND  ORGANIZATION  OF  CORPORATIONS. 

while  the  lioldcr  llioroof,  to  exercise  all  the  riglits  ami  privileges  of  ownership, 
meluiliiiix  tlie  rii^lit  to  vote  thereon. 

To  coiuluet  its  said  business  aiul  liavc  one  or  more  offices,  and  unlimitcdly  and 
without  restriction  to  purchasi-,  iiold,  lease,  mortgage,  and  convey  real  and  personal 
property  in  oroutofsaid  State  of  ,  and  in  such  ])laceand  places  in  the  sev- 

eral States  and  Territories  of  the  United  States,  its  colonial  j)osscssions  or  territorial 
acquisilions.  and  in  foreign  countries,  as  shall  from  lime  to  time  be  found  necessary 
and  conveniont  for  the  jjurposes  of  tlie  business  of  said  corporation. 

iV.  The  amount  of  the  total  authorized  capital  stock  of  said  corporation  shall 
be  dollars  (§  ),    which  shall  be  divided  into  shares  of 

the  par  value  of  dollars   each;  of  which   authorized  capital  stock  the 

amount  of  dollars  has  been  subscribed,  and  the  amount  of  dollars 

has  been  paid. 

V.  The  names  and  post-office  addresses  of  all  the  incorporators  and  the  number 
of  shares  of  stock  subscribed  for  by  each  are  as  follows  : 

Names.  Post-Office  Addresses.  No.  of  Shares. 

VI.  Said  corporation  is  to  expire  on  the  day  of 
Given  under  our  hands  this            day  of           ,  A.  D.  190  . 


CERTIFICATE  OF  INCORPORATION 


Transportation  Company  (Arizona  Ciiartee). 

This  is  to  Certify  that  we,  ,  have  this  day  associated  ourselves 

together  for  the  purpose  of  forming  a  corporation  under  the  laws  of  Arizona,  and 
for  that  purpose  do  adopt  the  following  charter: 

First.   The  name  of  this  corporation  is  the  Company. 

Second.    This  Company  shall  keep  a  local  office  at  ,  Arizona,  and  may 

keep  other  principal  olBces  and  places  of  business  at  ,  State  of  , 

and  at  such  other  places  and  in  such  States  as  the  Board  of  Directors  may  estab- 
lish, at  which  place  or  places  all  incorporators',  stockholders',  and  Directors'  meet- 
ings may  be  held,  and  all  corporate  business  be  transacted. 

Third.    The  amount  of  the  capital  stcjck  of  this  corporation  shall  be  $  , 

divided  into  shares  of  the  par  value  of  §  each,  and  said  capital 

stock  shall  be  paid  at  such  time  as  the  Board  of  Directors  may  designate,  in  money, 
property,  labor,  good  will,  or  any  other  valuable  right  or  thing. 

Fourth.  The  objects  for  which  this  corporation  is  formed  are,  as  principals, 
agents,  or  otherwise,  to  do  in  any  part  of  the  world  any  and  every  of  the  things 
herein  set  forth  to  the  same  extent  as  natural  jjcrsons  might  or  could  do,  and  in 
furtherance  and  not  in  limitation  of  the  general  powers  conferred  by  laws  of 
Arizona,  it  is  hereby  expressly  ])rovided  that  the  corporation  shall  have  the  follow- 
ing powers : 

(fl)  To  manufacture,  purchase,  or  otherwise  acquire,  and  to  hold,  own,  mortgage, 
pledge,  and  to  sell,  assign,  or  otherwise  dis|)ose  of,  to  invest,  trade,  deal  in,  or  deal 
with  goods,  wares,  merchandise,  and  property  of  every  class  and  description. 

(/y)  To  apply  for,  purchase,  or  otherwise  acquire,  and  to  hold,  own,  use, 
operate,  and  to  sell,  assign,  or  otherwi.se  dispose  of,  to  grant  licenses  in  respect  of, 
or  otherwise  turn  to  account  any  or  all  inventions,  improvements,  formula;,  and 
processes  used  in  connection  with  or  secured  under  Letters  Patent,  Copy  Rights,  or 
Trade  Marks  of  the  United  States,  or  elsewhere,  or  otherwise,  and  with  a  view  to 
developing  the  same,  to  carry  on  any  other  business,  whether  manufacturing  or 
otherwise,  which  the  corporation  may  think  calculated  directly  or  indirectly  to 
effectuate  these  objects. 

(r-)  To  purchase  or  otherwise  acquire,  and  to  hold,  sell,  assign,  transfer,  mort- 
gage, pledge,  or  otherwise  dispose  of,  the  shares  of  cajjital  stock  or  other  evi- 
deuce  of  indebtedness  created  by  other  corporation  or  corporations,  and  while  the 

562 


FORMS   AND   PRECEDENTS. 

holders  of  such  stock,  to  exercise  all  the  rights  and  privileges  of  ownership,  includ- 
ing the  right  to  vote  tliereon. 

((/)  Generally  to  purchase,  take  on  lease  or  in  exchange,  hire,  or  otlierwise 
acquire,  any  real  and  personal  property,  and  any  rights,  privileges,  or  franchises 
which  the  corporation  may  think  necessary  or  convenient  for  the  purpose  of  its 
business,  and,  in  full,  to  do  any  or  all  things  in  any  part  of  the  world  not  pro- 
hibited by  the  laws  of  Arizona. 

((?)  To  coustruct,  hire,  purchase,  and  operate  steamboats  and  other  vessels  of 
any  class,  and  especially  the  construction  of  steamboat  hulls  and  barges  after  and 
upon  the  plans  of  the  "  new  method  d  composite  construction;  to 

establish  and  maintain  lines  or  regular  services  of  si.-ainboats  or  other  vessels  on 
tiie  River  and  its  tributaries ;  and  generally  to  carry  on  the  business  of 

shipowners,  and  to  enter  into  contracts  tor  the  carriage  of  mails,  passengers,  goods, 
and  merchandise  by  any  means,  either  by  its  own  vessels,  railways,  and  conveyances, 
or  by  or  over  the  vessels,  conveyances,  and  railways  of  others ;  to  insure  against  loss 
by  fire,  flood,  or  other  calamity,  the  cargo  carried  or  transported  upon  the  Com- 
pany's steamboats  or  other  vessels;  to  construct,  purchase,  take  on  lease,  or 
otherwise  acquire  and  work  any  railway  wharf,  pier,  dock,  building,  or  works 
capable  of  being  advantageously  used  in  connection  with  the  business  of  the 
Company  as  a  shipping  company,  and  in  connection  with  any  of  the  objects  aforesaid, 
to  carry  on  the  business  of  a  railway  company,  railway  contractors,  ship  biiilders, 
engineers,  manufacturers  of  machinery  and  car  builders ;  to  acquire  concessions  or 
licenses  for  the  establisiiment  and  working  of  lines  of  steamboats  and  other  vessels 
between  any  ports  of  the  world,  or  for  the  formation  or  working  of  any  railway, 
wharf,  pier.'dock,  or  other  works,  or  for  the  working  of  any  public  conveyance. 

(/■)  To  build,  make,  operate,  mauitain,  buy,  sell,  deal  in  and  witii,  own,  lease, 
pledge,  and  otherwise  dispose  of  steamboats  and  vessels  of  every  nature  and  kiud 
whatsoever,  together  with  all  materials,  articles,  tools,  machinery,  and  ap])liance3 
entering  into,  or  suitable  and  convenient  for  the  construction  or  equipment  thereof, 
and  together  with  engines,  boilers,  machinery  and  appurtenances  of  all  kinds,  and 
tackle,  apparel,  and  furniture  of  all  kinds  ;  the  transportation  of  goods,  merchan- 
dise, and  passengers  upon  land  or  water,  building,  repairing  and  designing  houses, 
structures,  vessels,  ships,  boats,  wharves,  docks,  dry  docks,  railroads,  engines,  cars, 
machinery,  and  all  other  equipment;  constructing,  maintaining,  and  operating  rail- 
roads ;  to  build,  construct,  repair,  maintain,  and  operate  water,  ga.s,  and  electrical 
works,  tunneb,  bridges,  viaducts,  canals,  wharves,  piers,  and  like  works  of  internal 
improvement  or  public  use  or  utility  ;  to  own,  operate,  and  maintain  steamboat 
lines,  vessel  lines,  or  other  lines  of  transportation. 

(ff)  To  carry  on  the  business  of  cold  storage  and  warehousing  and  all  the 
business  necessarily  or  iinplieilly  incidental  thereto;  and  to  further  carry  on  the 
business  of  general  wareliousing  in  all  its  several  branches;  to  construct,  hire, 
purchase,  operate,  and  maintain  any  conveyances  for  the  transportation  in  cold 
storage  or  otherwise,  by  land  or  l)y  water,  of  any  and  all  products,  goods,  or  manu- 
factured articles  ;  to  issue  cert  ideates  and  warrants,  negotiable  or  otherwise,  to 
persons  warehousing  goods  with  the  Company,  and  to  make  advarces  or  loans  upon 
the  security  of  sudi  goods  or  otlierwise;  to  niannfactnrc,  sell,  and  trade  in  all 
goods  usually  dealt  in  by  warehousemen ;  to  construct,  pureiiasc,  take  on  lejuse  or 
otherwisi-  acquire  any  wharf,  jiier.  dock,  or  works  capable  of  being  advanl;it,'eously 
used  in  connecliun  with  the  shippin-,'  and  carrving  on  of  other  business  of  the  Com- 
pany ;  and  generally  to  carry  on  and  undertake;  any  business  undiTlaking,  transac- 
tion, or  operation  eomrnoidy  carried  (ui  or  undertaken  by  warehonsenn-n,  and  any 
other  business  which  may  from  time  to  time  sei-m  to  the  l)ireetors  eapalilr  of  bring 
conveniently  carried  on  in  conneelioii  with  tlie  above,  or  ealenlated  diri-elly  or 
indirectly  to  enhance  the  value  of,  or  render  prollUible  any  of  the  Company's  prop- 
erties or  rights.  .  •  ,  t 

(//)  To  own.  operate,  and  maintain  sugar  plantations,  and  to  grow,  nurcliasc. 
miiiufaeture,  refine,  and  dispose  of  sugar,  molasses,  and  mclada,  and  all  lawful  business 
incidental  thereto. 

0)    To  carry  on   the   business   of  mining,  milling,  concentratnig.  converting, 

5G3 


INCORPORATION   AND   ORGANIZATION   OP   CORPORATIONS. 

sinoltiii£r.  treating,  preparing  for  market,  manufacturing,  buying,  selling,  exchang- 
ing, and  otherwise  producing  and  dealing  in  eoal,  gold,  silver,  copper,  lead,  zinc, 
brass,  iron,  steel,  and  in  all  kinds  of  ores,  nu^tals,  and  minerals,  and  in  Die  products 
and  bv-produets  thereof  of  every  kiiul  and  description,  and  by  wiiatsoever  jiroeess 
the  same  can  l)e  or  may  hereafter  be  produced  ;  and  generally  and  without  limit  as 
to  amount,  to  buy,  sell,  exchange,  lease,  acquire,  and  deal  in  lands,  mines,  and  min- 
eral riglits  and  claims,  and  iu  the  above  specified  products,  and  to  conduct  all 
business  appurtenant  thereto. 

(/)  The  corporation  shall  also  have  power  to  conduct  its  business  in  all  its 
branches,  and  unlimitedly  to  hold,  purchase,  mortgage,  and  convey  real  and  personal 
property  in  any  State,  Territory,  or  colony  of  the  United  States  and  in  any  foreign 
country  or  place. 

Yifih.  Tlie  affairs  of  this  corporation  shall  be  conducted  by  a  President  and 
Board  of  Directors,  who  shall  be  elected  annually,  as  the  by-laws  shall  provide,  and  a 
voting  power  of  at  least  51  per  cent  of  the  capital  stock  shall  be  pooled,  and  tliat  right 
vested  in  the  incorporators  hereof,  and  that  said  right  to  endure  for  the  lifetime  of  the 
Company,  and  the  Board  of  Directors  can  without  further  authorization  make,  alter, 
amend,  ami  rescind  the  by-laws,  and  amend  the  articles  in  any  of  the  particulars 
herein  of  this  Company,  and  to  tix  the  amouut  to  be  reserved  as  working  capital. 

Sixth.  This  corporation  is  formed  to  endure  for  twenty-live  years  after  its  art- 
icles are  duly  executed,  but  its  charter  rights  may  be  renewed  before  its  charter 
expires,  from  time  to  time,  for  periods  not  exceeding  twenty-five  years  at  a  time, 
perpetually. 

Seventh.  The  private  property  of  the  stockholders  of  this  corporation  shall  be 
and  is  hereby  made  forever  exempt  from  all  liability  for  its  debts  or  obligations,  and 
there  shall  be  no  individual  liability  on  the  part  of  either  Directors  or  stockholders. 

Eighth.  The  capital  stock  of  this  corporation  shall  be  and  is  hereby  made  full 
paid,  and  forever  non-assessable  by  this  corporation  for  any  purpose.  In  accepting 
property  in  exchange  for  stock  the  judgment  and  appraisal  of  the  Directors  shall  be 
final  and  conclusive. 

Ninth.  The  Board  of  Directors  shall,  as  soon  as  practicable  after  the  organiza- 
tion of  the  Company,  instruct  the  Treasurer  to  set  apart  a  certain  sum  of  money, 
at  such  times  as  will  jointly  be  agreed  upon,  which  sum  of  money  shall  be  held  by 
the  Treasurer,  as  and  for  a  Sinking  Fund  to  be  utilized  for  the  replacing  of  any  of  the 
Company's  boats  or  properties  of  any  description  that  may  meet  with  disaster,  or 
for  general  repairs  in  any  way  upon  the  Company's  holdings  ;  to  anticipate  the  pay- 
ment of  any  obligations  which  may  not  be  classed  as  regular  expenses  ;  to  meet  any 
contingency  of  any  kind  and  thus  make  absolutely  certain  at  all  times  the  solvency 
of  the  Company  ;  to  insure  against  loss  the  cargo  transported  upon  the  Company's 
steamboats  or  other  vessels ;  to  apply  to  any  and  all  of  the  things  which  the  Board 
of  Directors  may  in  their  right  determine. 

Tenth.  All  stockholders  of  this  com{)any  shall  have  the  right  to  inspect  the  stock 
and  transfer  books  of  this  corporation  in  the  presence  of  the  President  and  Board 
of  Directors,  after  proper  reas(jns  have  been  given  for  the  request  to  so  examine. 

Eleventh.  Should  a  stockiiolder  so  desire,  a  proxy  can  be  given  to  the  Presi- 
dent or  any  member  of  the  Board  of  Directors,  and  such  person  will  act  for  him  the 
same  as  if  he  himself  were  present. 

Twelfth.  It  will  not  be  lawful  for  this  Company  to  join  with,  or  pool  its  inter-- 
ests  with  any  other  corporation  of  any  kind  or  nature  whatsoever,  or  have  as  a 
member  of  its  Board  of  Directors  any  officer  of  any  other  company  ;  thus  stringently 
excluding  a  representative  of  any  shareholder  or  shareiiolders  of  a  competing  com- 
pany, or  any  company,  whether  on  land  or  water,  from  having  any  voice  whatever 
in  the  management  or  direction  of  this  Company. 

Thirteenth.  This  Company  will  not  permit  the  listing  of  the  stock  of  this  cor- 
poration on  any  exchange  created  for  the  sole  purpose  of  the  bartering  and  selling 
of  the  securities  of  corporations. 

Fourteenth.   There  sliall   be    no    greater    amount   of    indebtedness    incurred, 
either  directly  or  indirectly,  by  the  Board  of  Directors  of  this  Company,  at  any  time, 
than  shall  exceed  in  amount  or  be  equal  to  two-thirds  of  the  capital  stock. 
564 


FORMS   AND    PRECEDENTS. 

Fifteenth.  Witliout  in  any  particular  limiting  any  of  the  objects  and  powers 
of  this  corporation  it  is  hereby  expressly  declared  and  provided,  that  should  it  be- 
come necessary  and  decided  by  tliose  in  control,  this  corporation  shall  have  power 
to  issue  bonds  in  payment  for  property  purcliased  or  acquired  by  it,  or  for  any 
other  object  in  and  about  its  business  ;  and  said  bonds  after  issue  and  before  their 
maturity,  can  be  retired  by  the  decision  and  vote  of  a  majority  of  the  iioldiugs  of 
stock,  and  new  certificates  of  stock  can  be  issued  to  the  stockholders  at  par. 

In  Jl' if /lets  Whereof,  we  have  hereunto  set  our  hands  and  seals  this  day  of 

,  A.  D.  190  . 
Signed,  scaled,  and  delivered 
in  the  presence  of 


CERTIFICATE  OF  INCORPORATION 

OF   THE 

Vehicle  Motor  Company  (District  of  Columbia  Charter). 

We,  the  undersigned,  ,  of  Washington,  District 

of  Columbia,  do  by  tliese  presents,  pursuant  to  and  in  conformity  with  tiie  provi- 
sions  of  six  hundred  five  (605)  and  six  hundred  six  (606)  of  an  Act  of  Congress 
approved  March  3rd,  1901,  entitled  "  An  Act  to  Establish  a  Code  of  Law  for  the 
District  of  Columbia,"  with  the  amendments  thereto  made  by  an  Act  a|)provcd 
June  30tii,  1902,  entitled  "  An  Act  to  amend  an  Act  entitled  '  An  Act  to  Establish 
a  Code  of  Law  for  the  District  of  Columbia,'"  associate  ourselves  together  as 
a  body  politic  and  corporate,  and  we  do  hereby  certify  and  declare  in  writing: 

First.    The  name  of  the  corporation  shall  be  Company. 

Second.  That  the  purposes  for  which  said  corporation  is  foruied  are :  To 
manufacture,  own,  sell,  assign,  and  transfer,  deal  in,  and  deal  with  all  kinds  of 
automobiles,  motors,  enufines,  launches,  machines,  or  all  kinds  of  machinery  or 
contrivances  for  the  generation  of  steam,  electricity,  gasolene,  or  other  form  of 
power  now  known  or  which  may  hereafter  be  discovered ;  the  manufacture  and  sale 
of  cars,  carriages,  wagons,  boats,  and  vehicles  of  every  kind  and  descrijjtion  for  the 
transportation  other  tiian  railroad  of  passengers  or  goods,  wlu'tlier  the  same  shall 
be  propelled  by  motor,  engine,  maciiine,  or  other  contrivances  oju'rated  i)y  .steam, 
electricity,  gasolene,  or  other  form  of  [jowcr  ;  the  maiiufaeturc  and  sale  of  maehinery, 
machine  sup|)Iies,  and  engineering  appliances,  whether  incidental  to  the  construc- 
tion of  motor  vehicles  or  not,  and  the  acquisition  and  sah;  of  inventions,  patent 
rights,  letters  patent,  and  trade  nuirks  covering  any  and  all  of  the  articles  to  be 
manufactured  or  dealt  in  by  said  corporation;  the  carrying  on  of  any  other  lawful 
trade  or  business  incident  to  the  aforesaid  purposes,  or  eitJier  of  them. 

To  manufacture,  purchase,  or  otherwise  acquire,  hold,  own,  sell,  assign,  and 
transfer,  invest,  trade,  deal  in  and  deal  with  goods,  wares,  and  merchandise  of 
every  class  and  description,  and  to  do  both  mining  and  manufacturing  of  any  kind. 

To  purcha.se,  or  otherwise  acquire,  hold,  own,  mortgage,  jiledgc,  sell,  assign, 
transfer,  and  generally  invest,  trade,  and  deal  in  personal  properly  of  every  class 
and  description. 

To  a|>ply  for,  purclia.sc,  or  otherwise  acquire,  and  to  hold,  own,  sell,  assign,  or 
otherwise  dispose  of,  to  grant  licenses  in  respect  of  or  nlherwise  turn  to  aercmnt 
any  or  all  invi-ntions,  iinjirovemeufs,  and  processes  used  in  eonncrlion  with  or 
secured  under  letters  patent  of  the  Unit<'(l  Stales  or  any  foreign  country,  and  to 
use  and  operate;  tiu;  same  to  the  extx.-iil  authorized  or  pennitt<'d  by  and  under  the 
laws  of  Ww  District  of  Columbia. 

To  acquire  the  good-will,  rights,  and  pro|>erfy  of  any  kind,  and  undertake  the 
•whole  or  any  part  rif  the  assels  and  liai)dilies  of  any  person,  (irm,  assnrialiun,  or 
corporation  engaged  in  any  business  which  is  now  or  may  hereafter  be  wilhin  the 
authorization  of  the  laws  under  which  this  Company  is  incoritoral<;d. 

5G5 


INCOUrOUATlON    AND   ORGANIZATION   OF   CORPORATIONS. 

To  li:ivt>  Olio  or  iiiorr  olTicos,  to  carry  on  all  or  any  of  its  operations  and  business 
ami  uiiliinitt'iUy  ami  without  restriction,  to  hold,  purchase,  lease,  mortgage,  and 
convey  real  and  personal  |)ropcrt_Y,  and  to  carry  on  its  business  in  any  State  or 
Territory  of  the  Unitt-d  States  and  in  any  foreign  country  or  place,  but  always 
subject  to  tlie  laws  thereof. 

Third.    That  the  existence  of  this  Company  shall  be  perpetual. 

Fourth.    That  the  capital  stock  of  this  Company  shall  be  dollars, 

divided  into  shares  of  the  par  value  of  dollars  each. 

Fifth.  That  the  number  of  Trustees  who  shall  manage  the  concerns  of  the 
Company  for  the  first  year  or  until  their  successors  are  elected  shall  be      ,  namely  : 

Names.  Addresses. 


The  Board  of  Trustees  by  the  affirmative  vote  of  a  majority  of  the  whole  Board, 
may  ajipoint  from  the  Trustees  an  Executive  Committee  of  three  members,  of  which 
a  inajority  shall  constitute  a  quorum,  and  to  such  extent  as  may  be  provided  in  the 
l)y-Iaws,  such  Committee  shall  have  and  exercise  all  of  any  of  the  powers  of  the 
Board  of  Trustees. 

Si.Tth.  That  the  place  in  the  District  of  Columbia  in  whicli  the  operations  of 
this  Company  are  to  be  carried  on,  is  ,  situated  at  ,  in  the 

City  of  Washington,  District  of  Columbia. 

In  Witness  Whereof, ^c  have  made,  signed,  and  acknowledged  this  certificate  this 
day  of  ,  190  . 


CERTIFICATE  OF  INCORPORATION 

Typewkiter  Company  (Connecticut  Charter). 

We,  the  subscribers,  certify  that  we  do  hereby  associate  together  as  a  body 
politic,  incorporated  under  and  by  virtue  of  the  provisions  of  the  Act  of  the  Gen- 
eral Assembly  of  the  State  of  Connecticut,  entitled  "  Au  Act  Concerning  Corpora- 
tions," being  Chapter  194  of  the  Public  Acts  of  1903,  and  all  acts  amendatory 
thereof,  and  we  further  certify : 

First. 
The  name  of  the  corporation  is  Company. 

Second. 

That  said  corporation  and  its  principal  office  is  to  be  located  in  the  City  of 
,  County  of  ,  and  State  of  Connecticut. 

Third. 

The  nature  of  the  business  to  be  transacted  and  the  purposes  to  be  promoted 
are  as  follows : 

To  manufacture,  import,  export,  buy,  sell,  and  generally  deal  in  typewriters, 
office  furniture,  and  all  office  supplies  of  any  kind  or  descrijition  ;  to  carry  on  the 
business  of  manufacturing,  exporting,  importing,  buying,  and  selling  typewriters, 
typewriter  supjilies,  materials,  appliances,  and  all  other  materials  and  articles 
connected  with  or  in  any  wise  relating  to  tlie  manufacture,  sale,  or  use  of  writing 
machines  and  typewriters.  To  esfablish  and  maintain  manufactories,  stores, 
agencies,  and  depots  for  the  manufacture,  purchase,  sale,  exchange,  delivery,  and 

566 


FORMS   AND   PRECEDENTS. 

distributiou  of  writing  macbiues,  typewriters,  typewriter  appliances  and  supplies, 
office  furniture  and  office  supplies.  To  niauufacture,  export,  and  import,  buy,  sell, 
and  generally  deal  in  machinery  of  every  kind. 

To  apply  for,  obtain,  register,  purchase,  or  otherwise  acquire,  and  to  hold,  own, 
use,  operate,  induce,  and  to  sell,  assign,  or  otherwise  dispose  of  any  and  all  inven- 
tions, improvements,  and  processes  used  in  connection  with  or  secured  under 
letters  patent  of  the  United  States,  or  otherwise  to  use,  exercise,  develop,  and 
grant  licenses  in  respect  of  or  otherwise  turn  to  account  any  and  all  such  patents, 
inventions,  improvements,  and  processes. 

To  hold,  purchase,  or  otherwise  acquire,  to  sell,  assign,  transfer,  mortgage, 
pledge,  or  otherwise  dispose  of  shares  of  the  capital  stock  and  l)oiids,  debentures, 
or  other  evidences  of  indebtedness  created  by  other  corporation  or  corporations, 
and  wliile  the  holder  thereof  to  exercise  all  the  rights  and  privileges  of  ownership, 
including  the  right  to  vote  thereon. 

To  the  same  extent  as  natural  persons  might  or  could  do  to  purchase  or  other- 
wise acquire,  to  hold,  own,  maintain,  work,  develop,  sell,  convey,  mortgage,  or 
otherwise  dispose  of,  without  limit  as  to  amount,  within  or  without  the  State  of 
Counecticut  and  in  any  part  of  the  world,  real  estate  and  real  property,  and  any 
interest  and  rights  therein. 

To  conduct  its  business  and  have  one  or  more  offices,  and  unlimitedly  and  with- 
out restriction  to  hold,  purchase,  lease,  mortgage,  and  convey  real  and  personal 
property  in  or  out  of  this  State,  and  in  such  place  and  places  in  the  several  States 
and  Territories  of  the  United  States,  colonial  possessions  or  territorial  acquisitions 
of  the  United  States  and  in  foreign  countries,  as  shall  from  time  to  time  Dc  found 
necessary  and  convenient  for  the  purposes  of  the  Company's  business. 

Fourth. 

That  the  amount  of  the  capital  stock  of  said  corporation  hereby  authorized  is 
dollars,  divided  into  shares  of  the  par  value  of  dollars  each. 

Fifth. 

That  said  corporation  will  commence  business  with  a  capital  stock  of 
dollars. 

Sixth. 

The  duration  of  the  corporation  shall  be  perpetual. 

In  Witness  Whereof,  we  have  hereunto  set  our  hands  and  seals  this  day 

of  ,  190  . 

Name.  Residence. 


SUGGESTIONS  RELATIVE  TO  THE  DRAFTING  OF  CHARTERS  AND 
THE  PREPARATION  OF  MINUTES  FOR  THE  ORGANIZATION 
MEETINGS   OF  CORPORATIONS. 

In  presenting  a  few  suggestions  relative  to  the  incorporation  and  (irganization  of 
corporations  it  is  lussunicd  thataehoirc  has  been  niiid<M)f  some  particular  Stale  from 
which  a  charter  is  to  be  obtained,  and  that  a  duty  has  been  inqioscd  upon  tjio  iitlor- 
ney  of  drafting  the  charter  under  the  law.s  of  such  State  and  (irgiinizing  (he  corpora- 
tion ready  for  the  transaction  of  business  tlierewn(hT.  'I'lic  suggestions  that  follow 
are  made  mow  with  a  view  to  utilizing  to  the  best  advantage  {w,  forms  and  prece- 
dents to  be  founrl  in  the  pnisent  work  rather  than  with  the  hoitc  of  presenting  any- 
thing particularly  new  or  original  along  this  line. 

567 


INCORPORATION   AND   ORGANIZATION   OP   CORPORATIONS. 


THE  DRAFTING  OF  THE  CHARTER. 

First,  ascertain  -whether  all  the  purposes  the  insertion  of  M-hich  in  tlie  charter 
is  desired  bv  the  client  may  be  embodied  in  one  chartei-.  l?y  reference  to  the 
"  Synopsis  Digest  "  contained  in  Tart  II.  of  this  work,  tliis  question  can  be  readily 
answered.  Next,  turn  to  tiie  forms  for  charters  of  the  various  States  and  Territories 
found  in  Part  HI.  of  tlie  present  work,  and  make  use  of  the  skeleton  form  tlierein 
found,  for  drafting  a  charter  under  the  laws  of  the  particular  States  in  wliieh  this 
particidar  charter  is  sought.  The  only  clanses  of  the  charter  to  whicli  particular 
reference  need  be  made  here  are  what  are  known  as  the  "Object  Clause,"  tlie 
"  Preferred  Stock  Clause,"  and  the  "  Clause  for  the  Regulation  of  the  Internal 
Ati'airs  of  the  Corporation." 

In  drafting  the  lirst  of  these,  the  "Object  Clause,"  reference  should  be  first 
had  to  the  "  Specific  Object  Clauses"  found  in  Part  HI.  pp.  403-442,  of  tliis  work. 
Forms  for  drafting  the  more  common  of  such  specific  "Object  Clauses"  will  be 
found  therein.  Next,  it  will  often  be  found  conveniiuit  and  useful  to  add  to  the 
"  Specific  Object  Clauses  "  certain  "  General  Object  Clauses ;  "  such,  for  example, 
as  tliose  permitting  a  corporation  to  purchase  and  hold  its  own  stock  and  stock  in 
other  corporations  as  well,  and  to  acquire  patents,  patent  rights,  trade  marks,  etc, 
and  to  hold  real  and  personal  nroperty  witliout  limit,  and  to  transact  business 
in  other  States  and  Territories  ana  foreign  countries.  Sometimes,  too,  it  is  of  advan- 
tage to  insert  a  clause  authorizing  the  corporation  to  acquire  an  existing  business  or 
to  engage  in  a  general  merchandise  business.  Such  forms  will  also  be  found  in  Part 
III.  pp.  509-510,  herein. 

Next,  attention  is  called  to  the  "  Preferred  Stock  Clauses,"  forms  for  which  will 
be  found  on  pp.  511-512  of  Part  III.  herein.  In  connection  with  tlie  clause  for  the 
regidation  of  the  internal  affair."  of  a  corporation,  attention  should  first  be  directed 
towards  ascertaining  whether  the  insertion  of  such  a  clause  is  permitted  under  the 
laws  of  the  particular  Commonwealth  from  which  the  charter  is  to  be  procured. 
(Sec  Part  III.  Table  X,  p.  580.)  Examples  of  such  clauses  will  be  found  on 
pp.  510-511  of  Part  III.  herein.  A  stock  subscription  agreement  should  ordinarily 
he  signed  by  all  of  the  incorporators  before  the  articles  of  incorporation  afe  signed. 
(See  Part  III.  p.  524.) 

Finally,  see  that  the  requisite  number  of  incorporators  sign  the  articles  and 
acknowledge  their  execution  (when  the  same  is  required)  before  a  notary  public  or 
other  officer  authorized  to  take  acknowledgments.  In  some  of  the  States,  notably 
New  Jersey,  if  the  articles  are  acknowledged  without  the  State,  a  certificate  must  be 
obtained  certifying  to  the  officer's  due  appointment  as  well  as  to  his  authority  to  take 
such  acknowledgments. 


THE  PROCURING  OF  THE  CHARTER. 

Ordinarily  three  copies  of  the  charter  should  be  prepared :  the  first  of  these 
stiould  be  signed  and  acknowledged  by  each  of  the  incorporators,  and  becomes  the 
original;  the  second  is  for  the  purpose  of  filing  (when  duly  certified)  in  local  county 
office  (when  the  same  is  required  by  statute),  and  the  third  — after  being  properly 
certified  —  remains  the  property  of  the  cor])oration. 

In  most  of  the  Commonwealths  at  the  time  the  charter  is  presented  to  State 
officials  for  filing  and  recording,  it  must  be  accompanied  by  a  sufficient  remittance 
to  cover  not  only  the  organization  tax  but  the  filing  and  recording  fees  as  well. 
(See  Part  II.  pp.  211-402.)  After  the  certificate  of  incorporation  is  issued  by  the 
proper  State  officials,  a  certified  copy  thereof  should  (when  the  same  is  required  by 
statute)  be  promptly  filed  in  the  proper  county  office. 


;68 


FORMS   AND   PRECEDENTS. 


ORGANIZING  THE  CORPORATION. 

(See  Composite  Form  of  Miuutes  and  By-Laws,  Part  III.  pp.  512-524.) 

The  orgauization  meeting  of  the  corporation  must  be  held  within  the  domiciliary 
State  of  tlic  corporation  unless  such  meetings  are  expressly  authorized  by  statute  to 
be  iie!d  witliout  such  domiciliary  State.  The  most  convenient  practice  is  for  the  in- 
corporators to  sign  a  written  waiver  of  notice  fixing  the  time  and  place  of  tlie  meet- 
ing. (See  rartlll.  p.  515.)  If  other  stockholders  than  the  incorporators  have 
signed  tlie  preliminary  stock  subscription  agreement,  they  also  must  sign  the  written 
waiver  here  referred  to.  The  meeting  organizes  by  the  election  of  a  Chairman  and 
a  temporary  Secretary.  Either  the  charter  itself  (if  one  is  issued)  or,  in  lieu  therof, 
a  certified  copy  of  the  certificate  of  incorporation  should  be  presented  and  entered 
at  length  in  the  minutes. 

The  By-Laws  should  next  be  adopted  section  by  section  and  entered  in  the 
minutes.  If  the  certificate  of  incorporation  names  the  first  Board  of  Directors,  it 
is  not  necessary  to  elect  a  new  Board  at  the  organization  meeting.  Where  such 
Directors  are  not  named  in  the  certificate  of  incor[)()ration,  tlie  next  order  of 
business  is  tiie  election  of  Directors.  Wlien  required  by  statute  (or  when  not  re- 
quired, if  tlie  incorporators  so  desire),  Inspectors  of  Election  should  be  appointed 
and  sworn.  If  the  |)ersons  so  cIioslmi  as  Directors  are  not  subscribers  tcj  the 
capital  stock  of  the  corporation,  they  may  become  qualified  either  by  subscribing  for 
stock  or  by  having  one  of  the  incorporators  who  is  a  subscril)er  to  the  capital  stock 
assign  ids  stock  subscription  to  them.     (See  Part  III.  p.  521.) 

if  it  is  the  intention  of  the  corporation  to  take  over  certain  property  (either  real 
or  personal)  in  exchange  for  its  capital  stock,  the  following  suggestions  may  be 
made:  Let  some  party  who  is  not  an  officer  or  director  in  the  corporation  offer  to 
enter  into  an  agreeaient  with  the  latter  relative  to  the  sale  of  such  property  for 
stock.  (Sec  Part  III.  p.  525.)  Then  draft  the  minutes  of  the  incorporators' 
meeting,  so  that  provision  is  made  for  the  acceptance  of  such  offer  in  exchange  for 
a  certain  specified  number  of  shares  in  the  corporation.  The  resoluticui  thus  nasscd 
may  be  so  framed  as  to  operate  as  a  payment  of  the  capital  stock  subscribed  for  by  the 
incorporators.  (SiC  Part  III.  p.  5180  Under  this  resolution  the  matter  is  referred 
to  the  Hoard  of  Directors  for  more  formal  action.  The  Board  may,  if  it  sees  fit, 
authorize  the  execution  of  a  formal  agreement  covering  the  transfer  of  such  property 
for  stock  in  substantially  the  form  S(!t  forth  in  Part  III.  pp.  .525-520.  This  secures 
the  issuauc  •  of  tli ;  capital  stock  either  in  whole  or  in  part  as  full-paid  and  non-assess- 
able, providing  the  Directors  in  appraising  the  property  arc  not  guilty  of  fraud  or 
gross  overvaluation  in  ajjpraisiug  the  same.  Next,  if  it  is  desired  to  place  some  of 
this  stock  so  that,  it  maybe  sold  to  procure  working  capital  for  the  eorptiration.  tlic 
parly  to  whom  it  is  issued  may  transfer  the  same  in  trust  to  the  corporation  for  that 
purpose.  (See  Part  III.  pp.  .52()-527.)  This  stock,  when  so  transferred,  can  be  sold 
under  tlie  order  of  the  Boird  of  Directors  of  the  Corporation,  at  such  times  and  for 
such  prices  as  they  may  deem  proper;  and  parties  purchasing  such  stock  will  then 
receive  tli;5  same  (vec  from  any  future  liaiiility  for  unmid  iustalments  thereon,  even 
though  they  have  purchased  such  stock  at  consideralily  h'ss  than  par. 

Th;^  seal' of  the  Company  shoiihl  hr.  ado|)t(d  at  this  meeting.  It  is  not  necessary 
for  the  incorporators  to  be  present  in  person  at  the  meeting.  They  may  all  be 
represented  by  |)r()xy  if  desired.  Iminedialely  after  adjouriimeiitof  the  iiie(U-pora- 
tors' organ i/.ai.ion  meeting,  or  later  if  mon^  convenient,  the  Directors  should  meet 
pursuant  to  a  written  waiver  of  notice  siu'ued  by  all  of  them  fixing  the  lime  and  place 
of  sucli  m?-tiutr.  (See  I'art  111,  p.  5lH.)  The  Mo;inl  then  pn,e.-eds  to  eleel  such 
olfi-.M-Hof  the  Company  as  an;  provided  fur  in  the  Hy-l-aws  adapted  at  the  incor- 
porators' meeting.  If  ilie  Hy-Fiaws  pn.vide  lor  an  Kx«;eiilive  Commitlee,  they  should 
be  appointed  at  the  same  lime  the  ollieers  ;ire  elected  .'\  form  of  stork  certificate 
should  alv>  be  passed  upon  and  ajiproved,  and  the  Secretary  given  authority  to  pro- 
cure necessary  stoek  rertifii-ates,  rorporale  liooks.  seal,  etc.  It  will  be  found  con- 
vcnient  at  this  meeting  fo  [)assa  resdluti'm  anihorizing  the  nprnmi,' nf  a  bank  aeeount 
designating  the  bank  tiiercin  and  the  officers  of  the  corporation  by  whom  eheeks  and 


INCOllPORATION    AND   ORGANIZATION    OP   CORPORATIONS. 

dnil'ts  shall  he  siguoil.  (See  l''art  Til.  ]>.  517-)  Where  it  is  nocessary  to  provide 
lor  the  inaiiitaiuiiig  of  the  iloniieiliarv  oilice  for  the  corporation  or  the  ap|)oiiitiiicut 
ol'  a  registereil  aj^eiit,  tins  shoulil  l)e  att(;iule(l  to  at  tiie  lirst  meeting  of  the  Directors. 
(See  I'art  HI.  p.  517.)  The  issuance  of  stock  in  exchange  for  projierty  should 
be  provided  for  by  resolution  in  accordance  with  the  terms  of  a  similar  resolution 
passed  by  the  incorporators  at  tlieir  organization  meeting.     If  the  stock  is  to  be 

!)aid  for  in  cash,  a  resolution  substantially  in  tiic  following  form  siiould  be  passed 
)y  tlie  Board,  to  wit : 

RESOLVED,  that  an  assessment  be,  and  the  same  hereby  is,  made  of 
dollars  per  share  from  the  amoujit  unpaid  upon  the  shares  of  the  capital  stock  of  the 
Company,  and  that  the  same  be  jiaid  to  the  Treasurer  of  the  Company  on  or  before 
the  day  of  ,  190  . 


570 


ORGANIZATION  TAXES. 


TABLE   I. 


TABLE   OF   ORGANIZATION   TAXES   PAYABLE   UPON 
INCORPORATION. 

(Capitalization.) 


<;a3 


Alabama        $25.00 

25.00 

25.00 

25.00 

50.00    75.00 

150.00 

275,00 

1,275.00 

8.00 

Alaska 

Jlerely 

tiling  1 

fees. 

5.00 

Arizona 

Merely 

filing  1 

fees. 

45.00 

Arkansas 

2.5.00" 

25.00 

25.00 

25.00 

25.00    25.00 

25.00 

25.00 

25,00 

10.00 

Califori\ia 

15.00 

15.00 

15.00 

25.00 

50.00     50.00 

75.00 

100.00 

150.00 

10.00 

Colorado 

20.00 

20.00 

20.00 

20.00 

30.00     50.00 

110.00 

210.00 

1,010.00 

12.00 

Connecticut 

25.00 

25.00 

25.00 

25.00 

50.00  100.00 

250.00 

500.00 

2,500.00 

5.00 

Delaware 

20.00 

20.00 

20.00 

20.00 

20.00    30.00 

75.00 

150.00 

750.00 

11.00 

Dist.  of  Col. 

Mereh 

•  filing 

fees. 

12.50 

Florida 

5.00" 

10.00 

50  00  100.00  200.00  250.00 

250.00 

250.00 

250.00 

18.00 

Georgia 

No  organization  tax 

30.00 

Idaho 

5.00 

5.00 

5.00 

10.00 

10.00    20.00 

20.00 

25.00 

25.00 

12.00 

Illinois 

30.00 

50.00 

70.00 

95.00 

145.00  245.00 

545.00 

1,045.00 

5.045.00 

7.00 

Indiana 

10.00 

10.00 

25.00 

50.00 

100.00  200.00 

500.00 

1,000.00 

5,000.00 

5.00 

Ind.  Territory 
Iowa 

25.00 

25.00 

25.00 

25.00 

25.00    25.00 

25.00 

25.00 

25.00 

10.00 

25.00 

25.00 

40.00 

65.00 

115.00  215.00 

515.00 

1,015.00 

5,015.00 

35.00 

Kansas 

27.00 

30.00 

50.00 

75.00 

125.00  175.00 

325.00 

525.00 

1,325.00 

27..50 

Kentucky 

2.00 

5.00 

25.00 

50.00 

100.00  200.00 

500.00 

1,000.00 

5,000.00 

5.00 

Louisiana 

25.00 

25.00 

25.00 

25.00 

25.00    25.00 

25.00 

25.00 

25.00 

60.00 

Maine 

10.00 

10.00 

50.00 

50.00 

50.00    50.00 

50.00 

100.00 

500.00 

18.00 

Maryland 

2  50 

6  25 

31.25 

62.50 

125.00  250.00 

625.00 

1,2.50.00 

6,250.00 

10  00 

Massachusetts  10.00 

10.00 

10.00 

12.50 

25.00    50.00 

125.00 

250.00 

1,250.00 

5.00 

Michigan 
Minnesota 

5.00 

5.00 

12.50 

25.00 

50.00  100.00 

250.00 

500.00 

2.500.00 

7.00 

50.00 

50.00 

50.00 

50.00 

75.00  125.00 

275.00 

52500 

2,525.00 

21.00 

Mis.-iissippi 
Missouri 

20.00 

20.00 

40.00 

60.00 

100.00  200.00 

250.00 

250.00 

2.50.00 

20.00 

50.00 

50.00 

50.00 

50.00 

75.00  125.00 

275.00 

525.00 

2,525.00 

5.00 

Montana 

10.00 

10.00 

10.00 

12.50 

25.00    45.00 

92.50 

142.50 

342.50 

6.00 

Nebraska 

10.00 

10.00 

10.00 

10.00 

10.00    20.00 

50.00 

100.00 

500.00 

18.00 

Nevada 

15.00 

15.00 

15.00 

15.00 

15.00    30.00 

75.00 

150.00 

750.00 

15.00 

N.Hampshire 
(Non-resident 

10.00 

10.00 

10.00 

25.00 

25.00     50.00 

50.00 

100.00 

200.00 

6.50 

corporations) 
New  Jersey 

1 
25.00 

25.00 

25.00 

25.00 

25.00    40.00 

100.00 

200.00 

1,000.00 

8.00 

New  Mexico 

25  00 

25.00 

25.00 

25.00 

25.00    25.00 

50.00 

100.00 

500.00 

25.00 

New  York 

l.W 

2.50 

12.50 

2500 

50.00  100.00 

250.00 

500.00 

2,500.00 

16.00 

No.  Carolina 

25.00 

25.00 

25.00 

25.00 

25.00     40.00 

100.00 

200.00 

1,000.00 

10.00 

North  Dakota 

,  50.00 

50.00 

50.00 

50.00 

75.00  125.00 

275.00 

525.00 

2,. 525. 00 

10.00 

Ohio 

10  0(1 

10.00 

25.00 

50.00 

100.00  200.00 

600.00 

1,000.00 

5,000.00 

10.00 

Oklahoma 

Merfl' 

V  filing 

fees. 

11.00 

Oregon 
Pennvslvania 

10.00  ■ 

10.00 

20.00 

25.00 

35.00    45.00 

60.00 

76.00 

100.00 

6  00 

CM 

ir,m 

8.J.3.1 

KiC.W 

333.3.1  666.0(5 

1,666.66 

3.333.33 

16,(i66.66 

60.00 

Rhode  Island 

IIMKOO 

lOO.(M) 

KM). 00 

KXi.OO 

100  00  200.00 

500.00 

1,0(10.00 

5,000.00 

1.00 

South  Carolina  2.(X) 

5  00 

2.x  00 

50.00 

100.00  150.00 

300.00 

500.IIO 

1,550.00 

6.00 

South  Dakota 

10.00 

10.00 

10.00 

15.00 

15.00     20.00 

20. (K) 

25,00 

40.00 

3.00 

Tennessee 

12.00 

15.00 

35.00 

6<».00 

110.00  210.00 

610.(K) 

1,010.00 

6,010.00 

21.00 

Texas 

25.00 

25.00 

35.00 

45  (Xt 

70.00  120.00 

270.00 

520.00 

2,520.00 

None 

Utah 

.50 

1.25 

0.25 

12.50 

25.'KI     50.00 

125.00 

250.00 

1.250.00 

15.00 

Vermont 

1000 

10.00 

50.10 

50.00 

10000  lOO.fK) 

2(K).(M» 

300.00 

600.00 

6.00 

Virginia 
Washington 

10.00 

10.00 

10.00 

10.00 

20.00     40.00 

100.00 

0(M).00 

600.00 

16.00 

16.00 

15.00 

16.00 

15.00 

16.00    16.00 

16.00 

15.00 

16.00 

10.00 

W.  Virginia 
(Mon-residenl 

;[  20.00 

20  .Of) 

20,00 

60.00 

60.00    90.00 

210.00 

410.00 

1,060.00 

18.00 

corporations) 
Wisconsin 

26.00 

25.00 

26.00 

50.00  100.00  200.00 

6(K).00 

1,000.00 

6.000.00 

6.00 

Wyoming 

5.00 

5.0<J 

10  00 

10.00 

10.00     15.00 

30.00 

65.00 

255.00 

.-.71 

6.00 

INCORPORATION    AND   ORGANIZATION    OF    CORPORATIONS. 

TABLE   II. 

TABLE   OF   ANNUAL   FRANCHISE   TAX   UPON 
DOMESTIC   CORPORATIONS. 

(Capitalization.) 


cc 


Alabama 

Alaska 

Arizona 

Arkansas 

California 

Colorado 

Connecticut 

Delaware 

Dist.  of  Col. 

Florida 

Georgia 

Idaho 

Illinois 

Indiana 

Iowa 

Kansas 

Kentuckj' 

Louisiana 

Maine 

Maryland 

Ma>s. 

Michigan 

Minnesota 

Mississippi 

Missouri 

Montana 

Nebraska 

Nevada 

N.  Hampshire  none 

New  Jersey     10.00 

New  Mexico    none 

New  York      'j 

(On  basis  of  6  I 


$10.00 
none 
none 
none 
none 
none 
none 

5.00 
none 
none 
none 
none 
none 
none 
none 
none 
none 
none 

5  00 
none 
10.00 
none 
none 
none 
none 
none 
none 
none 


percent  divi-  f 

dend)  ' 

N.  Carolina        5.00 

N.  Dakota        none 

Ohio  10.00 

Oklahoma         none 

Oregon  15.00 

Pennyslvania  50.00 

Rhode  Island    none 

So.  Carolina 

S  >.  Dakota 

Tennessee 

Texas 

Utah 

Vermont 

Virginia 

Washington 

W.  Virginia  i 

(Non-resident  ^20.00 

corporations)  ) 

Wisconsin         none 

Wyoming         none 

572 


5.00 
none 
none 
10.00 
none 
10.00 
10.00 
10.00 


(N 

15.00 
none 
none 
none 
none 
.50 
none 
12.50 
none 
none 
none 
none 
none 
none 
none 
none 
none 
none 
5.00 
none 
25.00 
none 
none 
none 
none 
none 
none 
none 
none 
25.00 
none 


25.00 
none 
none 
none 
none 

1.00 
none 
25.00 
none 
none 
none 
none 
none 
none 
none 
none 
none 
none 

5.00 
none 
50.00 
none 
none 
none 
none 
none 
none 
none 
none 
50.00 
none 


50.00 
none 
none 
none 
none 
2.00 
none 
50.00 
none 
none 
none 
none 
none 
none 
none 
none 
none 
none 
10.00 
none 

100  00 
none 
none 
none 
none 
none 
none 
none 
none 

100.00 
n<)ne 


«% 

75.00 
none 
none 
none 
none 
4.00 
none 

100  00 
none 
none 
none 
none 
none 
none 
none 
none 
none 
none 
10.00 
none 

200  00 
none 
none 
none 
none 
none 
none 
none 
none 

200.00 
none 


125.00 
none 
none 
none 
none 
6.00 
none 

150.00 
none 
none 
none 
none 
none 
none 
none 
none 
none 
none 
25.00 
none 

300.00 
none 
none 
none 
none 
none 
none 
none 
none 

300.00 
none 


200.00 
none 
none 
none 
none 
10.00 
none 

250.00 
none 
none 
none 
none 
none 
none 
none 
none 
none 
none 
25  00 
none 

500.00 
none 
none 
none 
none 
none 
none 
none 
none 

500.00 
none 


300.00 
none 
none 
none 
none 
20.00 
none 
500.00 
none 
none 
none 
none 
none 
none 
none 
none 
none 
none 
50.00 
none 

1,000.00 
n(>ne 
none 
none 
none 
none 
none 
none 
none 

1,000.00 
none 


500.00 
none 
none 
none 
none 
100.00 
none 

2,000.00 
none 
none 
none 
none 
none 
none 
none 
none 
none 
none 
150  00 
none 

5,000.00 
none 
none 
none 
none 
none 
none 
none 
none 

4,000.00 
none 


15.00  37.50   75.00   150.00   300.00   450.00  750.00  1,500.00  7,500.00 


5.00  10.00 
none  none 
25.00  50.00 


25.00   50.00 

none    none 

100.00  200.00 


100.00   100.00 

none    none 

300.00   500.00 


200.00   500.00 

none    none 

1,000.00  5,000.00 


20.00 
125.00 
none 
12.50 
none 
none 
10.00 
none 
10.00 
10.00 
10.00 


30  00 
250.00 
none 
25.00 
none 
none 
10.00 
none 
10.00 
20.00 
10.00 


.50.00 
500.00 
none 
50.00 
none 
none 
20.00 
none 
15.00 
40.00 
10.00 


70.00 
1,000.00 

none 
100.00 

none 

none 
30.00 

none 
25.00 
60.00 
10.00 


100.00 

1,500.00 

none 

1.50.00 
none 
none 
50.00 
none 
35.00 
60.00 
10.00 


100.00 

2,500.00 

none 

250.00 
none 
none 
50.00 
none 
50.00 

100  00 
10.00 


125.00 

5,000.00 

none 

500.00 
none 
none 
60.00 
none 
60.00 

200.00 
10.00 


200.00 
25,000.00 
none 
2,500.00 
none 
none 
50.00 
none 
50.00 

600.00 
10.00 


20.00   50.00   50.00   90.00   130.00  210.00   410.00  1,060.00 


none 
none 


none 
none 


none 
none 


none 
none 


none 
none 


none 
none 


none 
none 


none 
none 


QUESTIONS   AND    ANSWERS   RELATIVE   TO    CORPORATION   ACTS. 


TABLE   III. 

TABULATED  QUESTIONS  AND  ANSWERS  RELATIVE 
TO  THE  BUSINESS  CORPORATION  ACTS  OF  THE 
SEVERAL   STATES   AND   TERRITORIES. 


<=  — in 
Q>  a  o 

CJ   ^-i  -to* 


Alabama 
Alaska     .     . 
Arizona   .     . 
Arkansas 
California     . 
Colorado 
Connecticut 
Delaware 
Diftrict  of  Coll 
Florida     .     . 
lieorgia   .     . 
I.laho       .     . 
Illinoii)     .     . 
Indiana    .     . 
Indian  Territory 
Iowa   .     .     . 
Kansas     .     . 
Kentucky     . 
Louisiana 
Maine       .     . 
Maryland 
Massachusetts 
Michifjan 
Minnesota     . 
Mississippi    . 
Missouri  .     . 
Montana 
Nebraska 
Nevada   .     . 
New  fliiinp>liire 
New  .I<'r»<;y 
New  Mexico 
New  York    . 
North  ( :,iriilina 
North  Dakota 
Ohio    .     .     . 
Oklahoma    . 
Oregon 
Pennsvlvniiia 
Rhode  Mund 
South  Carolina 
South  iJakoU 
Tennessee 
Texas      .     . 
Utah   .     .     . 
Vermont 
Virginia 
Wa^liintjton 
West  V'irt^inia 
Wi^conoin     . 
Wyomitiij     . 


^3-2 
•w    X    O 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  Yes 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No     , 

.  No 

.  No 

.  No 

.  No 

,  No 

.  No 

.  Y'es 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No     , 

.  No     , 

.  No     , 

.  No 

.  No 

.  Nf. 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  Yes 

.  N.. 

.  No 

.  No 

.  No 

.  No 

.  No 


.t:  *  o  o 
"a  ST  3 


i_  ^  aj  -3 


"  i  >•  a 

c—  c  o 
c  -f  *      c 


No 

No 

Yes 

No 

Yes 

No 

Yes 

Yes 

No 

Yes 

Yes 

Y'es 

No 

No 

No 

Y'es 

No 

Yes 

Yes 

No 

Yes 

Yes 

Yes 

No 

Yes 

No 

Yes 

Yes 

Yes 

No 

No 

Yes 

No 

No 

Yex 

No 

Y.-H 

No 

No 

No 

Yen 

Yes 

Yes 

Y.s 

No 

No 

Yes 

No 

No 

Yes 

No 


Y'es 

No 

No 

Y'es 

Yes 

No 

Y'es 

No 

No 

Yes 

Y'es 

Y'es 

Y'es 

Y'es 

Yes 

No 

Yes 

No 

No 

Yes 

Y'es 

Yes 

Y'es 

No 

Yes 

Yes 

Yes 

No 

Yes 

No 

No 

No 

No 

No 

No 

No 

No 

No 

Yes 
Ye^ 
Yes 
Yes 
Yes 
No 
Yes 
Yes 
Yes 
No 
Y.s 
No 
No 


^1S 


Y'es 
No 
No 
Y'es 
Y'es 
No 
No 
No 
No 
Yes 
Y'es 
Yes 
Y'es 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
No 
No 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
No 
No 
No 
Yes 
Yes 
Yes 
Yes 

YOH 

No 
No 
No 
No 

Yes 

Yes 
Yes 
\,-* 

Yes 
No 
No 
Yes 
No 

Yph 

Yes 


S-®-S 

=  S2 

^  2  f-« 

'C   O   13 
ai    —  3J 

I— '  !:  ■* 
o"3d 

.  Yes 

.  Y'es 

.  Yes 

.  Yes 

.  Y'es 

.  Yes 

.  Y'es 

.  Yes 

.  Yes 

.  Yea 

.  Yes 

.  Yes 

.  Yes 

.  Y'es 

.  Y'es 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Y'es 

.  Yes 

.  Yes 

.  Y'es 

.  No 

.  Y'es 

Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

Yes 

.  Yes 

.  Yes 

.  No 

.  Yes 

.  Yes 

.     No 

.  Yes 

.  Yes 

.  Yes 

.  No 

.  Yes 

.  No 

.  Yes 

.  No 


INCORPORATION    AND    ORGANIZATION    OF   CORPORATIONS. 


TABLE   IV. 
TABULATED   QUESTIONS   AND   ANSWERS  (Continued). 


i^•oS 


■2^ 


expr 
intmer 
mittee 
ors? 

3 

>-> 

3 

1 

Does    statute 
athorize   appo 
xecutive  Comi 
oard  of  Direct 

11 

"SB 

»2  cS 

.S 

<u     . 

S  2J 

abin 

So 

■J-a 

X>   O 

M 

Alabama      .     . 

.     No     .     . 

.No      .     . 

.    No      .     . 

.    Yes     .    . 

Three  or  more 

Alaska    .     .     , 

.No      .     . 

.No      .    . 

.    Yes 

.     Yes 

Three  or  more 

Arizona  .     .     . 

.     No      .     . 

.     Yes     . 

.    No       . 

.    Yes     . 

One  or  more 

Arkansas     .     . 

No      .     . 

.     Yes 

.     No       . 

.     Yes     .    . 

Three  or  more 

California    .     . 

No     .    . 

.    Y'es      .     . 

.    Yes     .     . 

.     Yes      .     . 

Five  or  more 

Colorado      .     . 

No     .     . 

.    Yes     .    . 

.    No      .    . 

.     Yes 

Three  or  more 

Connecticut 

Yes    .     . 

.     No       .     . 

.    No      .    . 

.     Y'es      .     . 

Three  or  more 

Delaware     .     . 

Yes    .     . 

.    No      .     . 

.     Yes      .     . 

.     Yes     .     . 

Three  or  more 

Dist.  of  Columbia 

No      .     . 

.     No       .     . 

.     Yes      .     . 

.    Yes     . 

Three  or  more 

Florida  .     .     . 

No      .     . 

.    Y'^es     .     . 

.    No      . 

.     Yes 

Three  or  more 

Georgia  .     .     . 

.No      ,     . 

.    Yes 

.    No       . 

.    Yes     . 

Two  or  more 

Idaho      .     .     . 

.     No      .     . 

.     Yes 

.     Yes 

.    Yes     . 

Five  or  more 

Illinois    .     . 

.    No      . 

.     Yes 

.    No      . 

.     Yes     . 

Three  to  seven 

Indiana  .     .     . 

.     No      . 

.     Yes 

.     No       . 

.    Yes 

Three  or  more 

Ind.  Territory 

.     No      .     . 

.     Yes     .     . 

.     No       . 

.    Yes     . 

Three  or  more 

Iowa  .... 

.    No     .    . 

.    No       .     . 

.    No      .     . 

.    Yes     . 

One  or  more 

Kansas   .     .     . 

.     No      . 

.    Yes     . 

.     Yes 

.    No       . 

Five  or  more 

Kentucky    .     . 

.     No      . 

.    No       . 

.     No       . 

.     Yes 

Three  or  more 

Louisiana     .     . 

.     No      . 

.     No       . 

.     No       . 

.     Yes     . 

Three  or  more 

Maine     .     .     • 

.     No      . 

.     No       . 

.    No      . 

.     Yes 

Three  or  more 

Maryland    .     . 

.    No      . 

.    No      . 

.     Yes      . 

.     Yes      . 

Five  or  more 

Massachusetts 

.     Yes     . 

.     Yes     . 

.     No       . 

.     .    No       . 

Three  or  more 

Michigan     .     . 

.    No      . 

.    Yes     . 

.     No       . 

.    .    Yes     . 

.     Three  or  more 

Minnesota   .     . 

.    No      . 

.    Yes     . 

.     No       . 

.     Yes     . 

Three  or  more 

Mississippi 

.     No      . 

.    Yes     . 

.     No       . 

.    .     Yes 

Two  or  more 

Missouri      .     . 

.     No      . 

.     Yes 

.     .     Y'es 

.     .    Yes      . 

Three  or  more 

Montana      .     . 

.     No      . 

.     Yes     . 

.    No      . 

.    .    Yes     . 

,     Three  or  more 

Nebraska     .     . 

.    No      . 

.     No       . 

.     .    No      . 

.    .    Yes 

.     One  or  more 

Nevada  .     .     . 

.     Y^es     . 

.    Yes     . 

.     .    No      . 

.     .    Yes     . 

.    Three  or  more 

New  Hampshire 

.    No      . 

.    No      . 

.     .     Yes      . 

.     .    Yes 

.     Five  or  more 

New  Jersey 

.     Yes     . 

.     No       . 

.     .     Yes     . 

.    .     Yes 

.     Three  or  more 

New  Mexico    . 

.    No     . 

.     No       . 

.     Yes      . 

.     Yes 

Three  or  more 

New  York  .     . 

.     No      . 

.     No       . 

.    Yes 

.    Y'es 

.    Three  or  more 

North  Carolina 

.     No      . 

.    No       . 

.     Yes 

.    Yes     . 

Three  or  more 

North  Dakota . 

.     No      . 

.     Yes      . 

.     .     Yes      . 

.     .    No      . 

.     Three  or  more 

Ohio  .... 

.     No      . 

.    Y'es     . 

.     .     Yes 

.     .     No       . 

.     Five  or  more 

Oklahoma   .     . 

.     No      . 

.    Yes     . 

.     .     Yes      . 

.     .     No       . 

.     Three  or  more 

Oregon    .     .     . 

.     No      . 

.    .     Yes     . 

.    .     Yes    . 

.     Yes 

.     Three  or  more 

Pennsylvania  . 

.     No      . 

.    Yes     . 

.     Yes     . 

.     Yes 

Three  or  more 

Rhode  Island    . 

.     No      . 

.     .    Yes     . 

.     .    No       . 

.     .     No       . 

.     Three  or  more 

South  (Carolina 

.     No      . 

.     Yes     . 

.     .     No       . 

.     .     Yes      . 

.     Two  or  more 

South  Dakota  . 

.    No      . 

.     Yes      . 

.     .     Yes 

.    .     No      . 

.     Three  or  more 

Tennessee    .     . 

.     No      . 

.     .    Y'es     . 

.     .    No      , 

.    .     Yes     . 

.     Five  or  more 

Texas     .     .     . 

.     No      . 

.    .    No      . 

.     .     No      . 

.     .     No       . 

.     Three  or  more 

Utah        .     .     . 

.    No      , 

.    .    Yes     . 

.     •     Yes 

.    .    Yes     . 

.     Five  or  more 

Vermont      .     . 

.     No      . 

.    .    No       . 

.     .     Yes 

.     .     Yes      . 

.     Five  or  more 

Virginia       .     . 

.     Yes    . 

.     .     Yes 

.     .     No       . 

.     .     Yes      . 

.     Three  or  more 

Washington     . 

.    No     . 

.     .    No       . 

.     .     Yes     . 

.     .     Yes 

.     Two  or  more 

West  Virginia 

.    Yes    . 

.    .    Yes     . 

.     .     No       . 

.     .     Yes 

.     Five  or  more 

Wisconsin   .     . 

.     No      . 

.     .     No      . 

.     .    No       . 

.     .     Yes      . 

.     Three  or  more 

Wyoming    .     . 

.     No      . 

.     .    No      . 

.     .     No       . 

.     .     Yes     . 

.     Three  or  more 

:>7i 

QUESTIONS   AND   ANSWERS   RELATIVE   TO    CORPORATION   ACTS. 


TABLE   V. 

TABULATED    QUESTIONS   AND   ANSWERS  (^Continued). 


brt 


6Q 

o  u  o 
^11 

u    C 

Alabama      .     .     . 

.     No 

Alaska    .     .     .     . 

.     Yes 

Arizona  .     .     ,     . 

.    No 

Arkansas     .     .     . 

.     No 

California    .     .     . 

.     Yes 

Colorado       .     .     . 

.     Xo 

Connecticut      .     . 

.    No 

Delaware     .     .     . 

.     No 

Dist.  of  Columbia 

.     No 

Florida    .     .     .     . 

.    No 

(ieorgia  .     .     .     . 

.    No 

Idaho      .     .     .     . 

.     Yes 

Illinois    .     .     .     . 

.     No 

Indiana   .     .     .     . 

.     No 

Indian  Territory  . 

.     No 

Iowa 

.     No 

Kansas    .     .     . 

.     Yes 

Kentucky     .     . 

.     No 

Louisiana     .     .     . 

.    No 

Maine      .     .     . 

.     No 

Maryland     .     . 

.     Yes 

Maasachu-^etts 

.     No 

Miuliif^an 

.     No 

Minnesota    . 

.     No 

Mississippi  .     . 

.     No 

Missouri       .     . 

.     No 

Montana       .     . 

.     No 

Nebraska     .     . 

.     No 

Nevaila    .     .     . 

.     No 

New  Hampshire 

.    No 

New  Jersey 

.    No 

New  Mexico     . 

.    No 

New  York    .     . 

.     Yes 

North  (Carolina 

.     No 

North  Dakota  . 

.     Yes 

Ohio   .... 

.     Yes 

Oklalioinu    .     . 

.     Yes 

Oref^on     .     .     . 

.     .     No 

Pennsylvania    . 

.     Yes 

Rhode  Island    . 

.     .     No 

South  Carnlina 

.    N.. 

Souih  Dakota  . 

.     Yes 

Tennessee     .     . 

.     .     No 

Texas      .     .     . 

.     .     Yes 

Utah  .... 

.     .     Yes 

Vermont 

.     .     No 

Virtfiiiia       .     . 

,     .     No 

Washin^'ton 

.     .     No 

W.  Virginia      . 

.     .     N 

Wisconsin    .     . 

.     .     Y. 

Wyoming    .     . 

.    .     No 

">> 

c  a> 

^K 
'u 

~  a> 

lig 

Yes 

No 

No 

No 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

No 

Yes 

Yes 

No 

No 

Yes 

Yes 

No 

No 

No 

Yes 

Yes 

Yes 

No 

Yes 

No 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

No 

\'e8 

No 

Y.-H 

\m 

No 

Y.H 

No 

Y.'H 

Yes 
Ye« 

V... 


l.  t  « 

.ill 

c    _-= 

c  -  — . 


Yes 

Yes 

No 

No 

No 

Y'es 

Y'es 

Y'es 

No 

Y'es 

No 

No 

No 

Y'es 

No 

No 

No 

Y'es 

Yes 

Y'es 

Y'es 

Yes 

No 

No 

Yes 

No 

No 

No 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

No 

No 

No 

No 

No 

No 

Nm 

No 

N(. 

No 

No 

Yes 

Y.S 

No 

Yps 

Yes 

No 


M 


M 


el 


<a 

S!2,000 

None 

None 

None 

None 

None 

$2,000 

S2,000 

None 

None 

None 

None 

None 

None 

None 

None 

None 

None 

$5,000 

$1,000 

None 

$1,000 
$1,000,  Ma.x.  $-2.j,000,000 

$10,000 

None 
000,  Max.  $10,000,000 

None 

None 

$2,000 
1,000,  Max.  $1,000,000 

82,000 

None 

$500 

None 

None 

None 

None 

None 

None 

None 

None 

None 

None 

None 

None 

$500 

None 

None 

None 

None 

None 

r>75 


INCORTORATION    AND    ORGANIZATION    OP   CORPORATIONS. 


TABLE   VI. 
TABULATED    QUESTIONS   AND   ANSWERS  {Continued). 


Alabama 
Alaska     . 
Arizona  . 
Arkansas 
California 
Colorado 
Connecticut 
Delaware 
Dist.  of  Columb 
Florida    .     . 
Geor>;ia  .     . 
Idaho       .     . 
Illinois     .     . 
Indiana    .     . 
Ind.  Territory 
Iowa  .     .     . 
Kansas    .     . 
Kentucky    . 
Louisiana 
Maine      .     . 
JIaryland     . 
i^Iassachusetts 
Michigan 
Minnesota    . 
Mississippi  . 
Missouri 
Montana 
Nebraska     . 
Nevada   .     . 
New  Hampshire 
New  Jersey 
New  Mexico 
New  York    . 
North  Carolina 
North  Dakota 
Ohio   .     .     . 
Oklahoma    . 
Oregon     .     . 
Pennsvlvaiiia 
Rhode"  Island 
South  Carolina 
South  Dakota 
Tennessee     . 
Texas      .     . 
Utah  .     ,     . 
Vermont 
"Virginia 
Washington 
West  Virginia 
Wisconsin    . 
Wyoming    . 

57G 


S2 

as  " 


(«1    u 


Any  amount 
Any  amc  imt 
Any  amount 
S25  ... 
•SI  to  $100  . 
$1  to  SlOO  . 
Min.  «25  . 
Any  amount 
Any  amount 
$10  up  .  . 
An^-  amount 
Anv  amount 
$10"  to  $100  . 
Max.  $100  . 
$25  .  .  . 
Any  amount 
An_v  amount 
Any  amount 
Any  amount 
Any  amount 
Anv  amount 
Min.  $5  .  . 
$10  to  $100 
$1  to  $100  . 
Any  amount 
Any  amount 
Any  amount 
Any  amount 
Anv  amount 
$2.5  to  $500  . 
Any  amount 
Any  amount 
$5  to  3100  . 
Anj'  amount 
Any  M mount 
Any  amount 
Any  amount 
Anv  amount 
Not  over  SlOO 
Any  amount 
Any  amount 
Anv  amount 
rSlOO  or  less 
Any  amount 
Any  amount 
Canno't  exceed  $100 
Any  amount 
Any  amount 
Any  amount 
Any  amount 
Any  amount 


e.J. 

O   at) 
rtJ3 

.a  o 

o  S 

sS 

3   O 


Twenty  per  cent    . 

No  liniit  .... 

No  limit  .... 

No  limit  .... 

No  limit  .... 

No  limit  .... 

$1,000      .... 

$1,000      .... 

Ten  per  cent     .     . 

Ten  per  cent      .     . 

Ten  per  cent     .     . 

No  limit  .... 

No  limit  .... 

No  limit  .... 

No  limit  .... 

No  limit  .... 

Twent}'  per  cent     . 

No  limit  .... 

No  limit  .... 

No  limit  .... 

No  limit  .... 

No  limit  .... 

Ten  per  cent      .     . 

No  limit  .... 

No  limit  .... 

Fifty  per  cent    .     . 

No  limit  .... 

No  limit  .... 

No  limit .... 

No  limit  .... 

$1,000      .... 

No  limit  .... 

$500 

No  limit 

No  limit 

No  limit 

No  limit 

No  limit 

Ten  per  cent     .... 

No  limit 

Twenty  per  cent     .     .     . 

No  limit 

Unlimited,  except  brewery  cos. 
.  Ten  per  cent  .... 
.     Ten  per  cent      .... 

.     One  fourth 

.     No  limit M 

.     No  limit 

10%  of  subscriptions  .  .  . 
.  Twenty  per  cent  .  .  . 
.     No  limit 


^"  A  bo 


a 


a 

°   o  3 

Twenty-tive  per  cent 

None 

None 

None 

None 

None 

$1,000 

$1,000 

Ten  per  cent 

Ten  per  cent 

Ton  per  cent 

None 

All 

None 

None 

None 

Twenty  per  cent 

Fift}'  per  cent 

None 

None 

None 

None 

Fifty  per  cent 

None 

None 

All 

None  j 

None 

$1,000 

None 

$1,000 

None 

$500 

None 

None 

Ten  per  cent 

None 

One-half 

Ten  per  cent 

None 

Fifty  per  cent 

None 

None 

Fifty  per  cent 

Ten  per  cent 

One  fourth    . 

inimum  capitalization 

None 

VWa  shares 

Fifty  per  cent 

None 


QUESTIONS   AND   ANSWERS   RELATIVE   TO    CORPORATION   ACTS. 


TABLE   VII. 
TABULATED   QUESTIONS  AND   ANSWERS  {Contiyiued). 


Alabama 
Alaska     . 
Arizona  . 
Arkansas 
California 
Colorado 
Connecticut 
Delaware 
District  of  Columbia 
Florida    . 
Georgia  . 
Idaho 
Illinois    . 
Indiana    . 
Indian  Territory 
Iowa   .     .     . 
Kansas    .     . 
Kentucky     . 
Louisiana 
Maine      .     . 
Maryland 
Massachusetts 
Michigan 
Minnesota    . 
Mississippi  . 
Missouri 
Montana 
Nebraska 
Nevada  .     . 
New  Hampshire 
New  Jersey 
New  Mexico 
New  York    . 
North  (y'arolina 
North  Dakota 
Ohio   ... 
Oklahoma    . 
Oregon    .     . 
Pennsylvania 
Rhode  Island 
South  Carolina 
South  Dakota 
Tennessee    . 
Texas      .     . 
Utah       .     . 
Vennont 
Virginia 
Washington 
West  Virginia 
Wisconsin    . 
Wyoming     . 
37 


Is   graduated    organi 
tion     tax     imposed     u] 
domestic  corporations  ? 

Is  annual  license  tax 
posed  upon  domestic  « 
porations  V 

Yes     ....    Yes     .    . 

No 

.    No      .     . 

No 

.    No      .     . 

No       . 

.    No      .     . 

Yes 

.     No       .     . 

Y'es 

.Yes     .     . 

Y"es 

.    No      .     . 

Y'es 

.    Y'es     .     . 

No       . 

.     No       .     . 

Y'es 

.No       .     . 

No 

.     No       .     . 

Y'es 

.No       .     . 

Y'es 

.No       .     . 

Y'es 

.    No      .     . 

No 

.     No       .     . 

Y'es 

.     No       .     . 

Y'es 

.     No      .     . 

Y'es 

.    No      .     . 

No 

.    No      .    . 

Y'es 

.     Y'es      .     . 

Y'es     . 

Y 

BS  (conditionally) 

Y'es 

.     Yes     .     . 

Y'es 

.     No       .     . 

Y'es 

.No       .     . 

Y.;s 

.     No       .     . 

Y.;s 

.     No       .     . 

Yes 

.No       .     . 

Yes 

.     .     No       .     . 

Yes 

.     No       .     . 

Yes 

.No       .     . 

Yr-s 

.     Yes      .     . 

Yes 

.No       .     . 

Yes 

.     .     Yes      .     . 

Yes 

.     Yes      .     . 

Yes 

.     .     No       .     . 

Yes 

.     .     Yes      .     . 

No 

.     No       .     . 

Y.-s 

Yes 

Yes 

.     Yes      .     . 

Yes 

.No       .     . 

Yes 

.     Y.V1      .     . 

Y.s 

.     .     No       .     . 

Yes 

.     .     No 

Yes 

.         V..H 

Yes 

.     No 

Yes 

.     Yes      .     . 

Y.-S 

.     Yes     .     . 

Yes 

.    v.-     .    . 

Y.'s 

Y.-. 

y. 

"^ 


<'i 


No 

.    No 

No 

.    Yes 

Yes 

.    No 

No 

.     Y'es 

No 

.     No 

No 

.     Y'es 

No 

.     Yes 

No 

.     Yes 

No 

.    Y'es 

Y'es 

.    Y'es 

Yes 

.    No 

No 

.    No 

No 

.    Y'es 

No 

.     Y'es 

No 

.     Y'es 

Yes 

.     Y'es 

No 

.     Y'es 

No 

.     No 

Yes 

.    Yes 

No 

.     Y'es 

No 

.     No 

No 

.     Yes 

No 

.    Yes 

Y'es 

.    No 

Yes 

.     No 

No 

.     Yes 

No 

.     Y'es 

Yes 

.     Yes 

No 

.     No 

No 

.     Yes 

No 

.    Yes 

Yes 

.     No 

No 

.     Yes 

No 

Yes 

No 

.     No 

No 

.     .     Yes 

No 

.     Yes 

No 

.     Yes 

Yes 

.     Yes 

No 

.     No 

No 

.     Yes 

No 

.     Yes 

No 

.     Yes 

No 

.     .     No 

No 

.     No 

No 

.     No 

No 

.     Yes 

No 

.     .     Y.'S 

No 

.     No 

No 

.     Yen 

\o 

.     No 

INCORPORATION   AND   ORGANIZATION   OF   CORPORATIONS. 


TABLE  VIII. 
TABULATED   QUESTIONS   AND   ANSWERS  dOontinued). 


Alabama  . 
Alaska 
Arizona    . 
Arkansas 
California 
Colorado  . 
Connecticut 
Delaware  . 
District  of  Columbia 
Florida     . 
Georgia    . 
Idaho  .     . 
Illinois 
Indiana    . 
Indian  Territory 
Iowa    .     .     . 
Kansas     .     . 
Kentucky 
Louisiana 
Maine  .     .     . 
Maryland 
Massachusetts 
Michigan 
Minnesota 
Mississippi    . 
Missouri   .     . 
Montana  .     . 
Nebraska 
Nevada    .     . 
New  Hampshire 
New  Jersey  . 
New  Mexico 
New  York 
North  Carolina 
North  Dakota 
Ohio    .     .     . 
Oklahoma     . 
Oregon     .     . 
Pennsylvania 
Rhode  Island 
South  Carolina 
South  Dakota 
Tennessee     . 
Texas .     .     . 
Utah    .     .     . 
Vermont  . 
Virginia  .     . 
Washington 
West  Virginia 
Wisconsin    . 
Wyoming     . 

578 


5 

•S2 

t^ 

^.9 

1^ 

eg 

^i 

S.O 

S| 

Ot3 

o 

M  « 

ODfiVi 

o  a> 

O   I-i 
a> 

►- 1; 

»   08 

i=-o  ^ 

_  -u   o 

^  H  t: 

B  a 

.2  2 
^5 

•I 

"0)0 

.2  « 

»'gt3 

3^ 

Does    statute 
power  to  purchase 
other  corporations 

Yes  . 

.    Broad    .    . 

.    Yes    .    . 

.    Yes     . 

.    Yes 

No    . 

.     Broad    • 

.    Yes     . 

.    No     . 

,    No 

No    . 

.     Broad    .     . 

.    Yes    . 

.    No     . 

.     No 

No    . 

.    Broad    .    . 

.     Yes     . 

.    No     .    . 

.    No 

Yes  . 

.    Broad    . 

.    No     . 

.    No     . 

.    No 

No    . 

.    Narrow 

.    Yes     . 

.    No     . 

.    No 

No    . 

.     Broad    . 

.    Yes     . 

.    Yes    . 

.    Yes 

No    . 

.     Broad    . 

.     Yes     . 

.     Yes    . 

.    Yes 

No    . 

.     Narrow 

.     No      . 

.     ,     No     , 

Forbidden 

No    . 

.     Broad    . 

.    No      . 

.    No      . 

.    No 

Yes  . 

.     Narrow 

.    No     . 

.    .    No     . 

.    Forbidden 

Yes  . 

,     Narrow 

.    No     . 

.     .    No     . 

.    No 

No    . 

.    Broad     . 

.    Yes    . 

.    .    No     . 

Yes  limited 

Yes  . 

.     Narrow 

.    Yes     . 

.    Yes    . 

Yes  limited 

No    . 

.     Broad    . 

.    Yes    . 

.    No     . 

.    No 

Yes  . 

.     Broad    . 

.     Yes     . 

.    No     . 

.    No 

Yes  . 

.     Broad     . 

.     No     . 

.    Yes    . 

.    No 

No    . 

.     Broad    . 

.    Yes    . 

.    Yes    . 

.    .    No 

No    . 

,     Broad    . 

.    Yes    . 

.    No     . 

.    No 

No    . 

.     Limited 

.    .    No     . 

.     .     Yes    . 

.    Yes 

No    . 

.     Broad     . 

.    No     . 

.    Yes    . 

.    No 

No    . 

.     Broad    . 

.    No     . 

.    Yes    . 

.    No 

Yes  . 

.     Broad    . 

.    No     . 

.    Yes    . 

.    No 

Yes  . 

.     .     Broad    . 

.    No     . 

.    Yes    . 

.    No 

Yes  . 

.     Broad    . 

.     No      . 

.    .    No     . 

.    No 

Yes  . 

,     .     Limited 

.    No      , 

.    .    Yes    . 

,    No 

Yes  . 

.     .     Limited 

.     No      . 

.     .    No     . 

.     No 

No  .    . 

.     Limited 

.     Yes     . 

.    No     . 

.     No 

Yes  . 

.     Broad    . 

.    Yes    . 

.    Yes    . 

.     Yes 

No    . 

.     Broad    . 

.    No     . 

.    Yes    . 

.    No 

Yes  . 

.     .     Broad    . 

,     .    Yes     . 

.    Yes    . 

.    Yes 

Yes  . 

.     Broad    . 

.     No 

.    No     . 

,    No 

Yes  . 

.     Broad    . 

.     Yes     . 

.    .    Yes    . 

.    Yes 

Yes  . 

.     Broad    . 

,     Yes    . 

.    Yes    . 

.    No 

Yes  . 

.     Broad    . 

.    No      . 

.     .    No     . 

.    No 

No    . 

.     Limited 

.    No      . 

.    Yes    . 

Yes  limited 

Yes  . 

.     Broad     . 

.     .    No     . 

.     .    No     . 

.    .    No 

No    . 

.     Limited 

.     Yes    . 

.    No     . 

.    No 

Yes  . 

.     Limited 

.     No     . 

.    Yes    . 

.    Yes 

No    . 

Broad     . 

.     Yes     . 

.     Yes    . 

.    No 

Yes  . 

.     Narrow 

.    Yes     . 

.     Yes    . 

.    No 

Yes  . 

,     Broad    . 

.     No     , 

.    No      , 

.    No 

No    . 

.     Limited 

.     No     . 

.    No      . 

.    Yes 

No    . 

.     Limited 

.    No      . 

.     Yes     . 

.    No 

No    .     . 

.     Broad     . 

.     No 

.     Yes     . 

.    No 

No    . 

.     Narrow 

.     No      . 

.    No     . 

.    No 

No    . 

.     Broad     . 

.     Yes     . 

.    .    Yes    . 

.    Yes 

No    . 

.     Narrow 

.     Yes     . 

.    No      . 

.    No 

Yes  . 

.     Broad    . 

.     Yes     . 

.     .    Yes    . 

.     .    Yes 

No    . 

.     Broad    . 

.     Yes     . 

.     Yes     . 

.     Yes 

No    . 

.    Limited 

.    Yes    . 

.    Yes    . 

.    Yes 

QUESTIONS   AND   ANSWERS   RELATIVE  TO  CORPORATION   ACTS. 


TABLE   IX. 
TABULATED   QUESTIONS   AND   ANSWERS  {Continued). 


Alabama     . 

Alaska  . 

Arizona 

Arkansas    . 

California  . 

Colorado    . 

Connecticut 

Delaware    . 

District  of  Columbia 

Florida .     .     . 

Geor/ifia      .     . 

Idaho     .     .     . 

Illinois  .     .     . 

Indiana       .     . 

Indian  Territory 

Iowa       .     .     . 

Kansas 

Kentucky  .     . 

Louisiana  .     . 

Maine    ... 

Maryland  .     . 

Massachusetts 

Michigan    .     . 

Minnesota  .     . 
Mississippi 
Missouri      .     . 
Montana     .     . 
Nebraska   .     . 
Nevada       .     . 
New  Hampshire 
New  .lersev 
New  Mexico    . 
New  York  . 
North  C'arolina 
North  Dakota 
Ohio       .     .     . 
Oklahoma  .     . 
Oregon  .     .     . 
I'enn^vlvniiia 
Rhode  Mand  . 
South  Carolina 
Soiitli  Diikola 

Tf-nnoHfien  . 
Texas  .  .  . 
Utah  .  .  . 
Vermfint  .  . 
Virginia  .  . 
Washmgton  . 
West  Virginia 
Wiscon<iin  .  . 
Wyoming  .     . 


•25 

cs  s  2 
5S 


Yes 

No 

No 

No 

Yes 

Yes 

Yes 

Yes 

No 

No 

No      , 

No     . 

Yes 

Yes 

No 

No     . 

No      , 

Yes 

Yes     . 

Yes     . 

Yes 

No      . 

No      , 

No      . 

No      . 

Yes     . 

Yes     . 


V    o 


No  . 

Yes  . 

No  . 

Yes  . 
fes  limited 

Yes  . 

No  . 

No  . 

Yes  . 


No  . 
I'es  limited 

Yes  . 

No  . 
No 

Yes  . 

Y.s  . 

No  . 


Yes 
No 
Ye<« 

No 


Yps 

No 
No 


a  s  2 

o  o 

No  . 

No  , 

No  , 

No  . 

Y'es  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 

No  . 
No 

No  . 

No  . 

No  . 

No  . 
Yes 

No  . 
No 

No  . 


No 
No 
Yes 
No 
No 
No 
Yes 
No 


No 
No 
Yes 
No 


Yes 
Yes 
No 


I  §3 

O     ^     r* 

Q  c  I 


T^es 

No 

No 

Yes 

No 

No 

Yes 

No 

No 

No 

Y'es 

No 

No 

No 

Y'es 

No 

No 

No 

No 

No 

No 

No 

Yes 

Yes 

No 

No 

No 

No 

No 

No 

Yes 

No 

Yes 

No 

No 

No 

No 

No 

Y.'s 


Yes 
Yes 
No 
No 
No 


Yrs 
Yes 

No 
No 
No 
No 
No 


3  a. 
E  2 


•3 

No 

No 

No 

No 

Y'es 

Yes 

No 

Yes 

No 

No 

No 

No 

Yes 

No 

No 

No 

Yes 

Yes 

No 

No 

Yes 

No 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

No 

No 

Yes 


No 

Y.- 

Yus 

No 

No 

No 

No 

Yes 

No 

Yes 

No 

No 


(U   u  S 

c  «  a> 


No 

Yes 

No 

No 

Yes 

No 

No 

No 

No 

No 

No 

Yes 

No 

No 

No 

No 

No 

No 

No 

No 

Yes 

No 

No 

No 

No 

No 

Yes 

No 

Yes 

No 

No 

Yes 

No 

No 

Yes 

No 

Yet 

No 

No 

No 

No 

Yes 

No 

No 

Yes 

No 

Yes 

Yes 

Yes 

No 

No 


INCORPORATION   AND    ORGANIZATION    OP   CORPORATIONS. 


TABLE   X. 
TABULATED   QUESTIONS   AND   ANSWERS  {Continued'). 


5^  t-ss 

O    0)    o 


«  C  (U  —  o 

X  o  o 

Alabama No 

Alaska No      . 

Ar'^ona      ■ , , , , £jQ :. 

Arkansas No 

("iilifnniia  .      ■ . Ksi y 

Colorado No      . 

Connecticut     ....  No 

Itelaware No 

District  of  Columbia     .  No 

Florida Yes     . 

Georgia No 

Idaho No      . 

Illinois No      . 

Indiana No 

Indian  Territory      .     .  No      . 

Iowa      ..."...  No      . 

Kansas No 

Kentucky No 

Louisiana No 

Maine No      , 

Maryland No      . 

Massachusetts     .     .     .  Yes    . 

Michigan Yes     . 

Minnesota No 

Mississippi      ....  No 

^Missouri No 

Montana No 

Nebraska No 

Nevada No 

New  Hampshire       .     .  No      . 

New  Jersey     ....  No 

New  Mexico  ....  No 

Ne%v  York       ....  No 

North  Carolina   ...  No 

North  Dakota      ...  No 

Ohio No 

Oklahoma       ....  No 

Oregon No 

Pennsylvania      .     .     .  No 

Khode  Island       ...  No 

South  Carolina    ...  No 

South  Dakota      ...  No 

Tennessee No 

Texas No 

Utah Yes 

Vermont No 

Virginia Yes 

Washington    ....  No 

West  Virginia     .     .  '.  No 

Wisconsin       ....  No 

Wyoming No 


O  o    ?^ 

0^  o  C  ho 

^  0.0 

■^  S  3  ►< 


Q  c  a)  J^  o 

.    No     . 
.    No      . 


S    CS    "- 


Stl 


QJ     C     _.     OT     — 

.2  g  E  § 
£ t; •«  St 


"  tS    O. 


S^  o  u  B 
C  o  o  o 


Yes 
No 
No 


No 
No 
No 


^9 


2  o-S 


tatute 
upon 
that 
bscrij 

0)           "" 
^M    CD 

m           a 

p^a.     >> 

Does 
authori 
cles   of 
ulation 
of  the  c 

OS    «    <Bti 

Doe 
liabili 
beyon 
stock 

Isc 
by    e 
statut 
prope 

Yes 
Yes 

No 


No 


.    No 

.    No 


Yes 

No 

No 

No 

No 

No 

No 

No 

Yes 

No 

No 

No 

No 

No 

No 

No 

Yes 

Yes 

Yes 

No 

No 

No 

No 

No 

No 

No 

No 

Yes 

No 

Yes 

No 

Yes 

No 

Yes 

No 

No 

Yes 

Yes 

No 

No 

No 

No 

No 

No 

Yes 

No 


Yes 
TST" 
Yes 
Yes 
Yes 
Y'es 
No 
Yes 
No 
No 
Yes 
Yes 
No 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
No 
No 
Yes 
Yes 
No 
Yes 
Yes 
Yes 
No 
Yes 
Yes 
Yes 
Yes 
Yes 
No 
Y'es 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
No 
Yes 
Yes 
Yes 
Yes 
Yes 


No 

Yes 

Yes 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

Yes 

No 

No 

No 

No 

No 

No 

Yes 

No 

Yes 

No 

Yes 

No 

Yes 

Yes 

No 

No 

No 

No 

No 

No 

Yes 

No 

No 

No 

No 

No 

Yes 

No 

Yes 

No 

No 


.  No 

.  Yes 

.  Yes 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  Yes 

.  Yes 

.  No 

.  No 

.  No 

.  No 

.  No 

.  No 

.  Yes 

.  No 

.  Yes 

,  No 

.  Yes 

.  Yes 

.  No 

,  No 

.  No 

.  No 

.  No 

.  No 

.  Yes 

.  No 

.  Yes 

.  No 

.  Yes 

.  No 

.  Yes 

.  No 

.  Yes 

.  Yes 

.  No 


QUESTIONS  AND   ANSWERS  RELATIVE  TO   CORPORATION   ACTS. 


TABLE  XI. 
TABULATED    QUESTIONS   AND   ANSWERS  ^Continued). 


Alabama 

Alaska  . 
Arizona 


Arkansas 
ralif(.rnia 


<"_ 

.§  3 

S    3 

None 

None 

Noiifi_ 

None 

N""<^ 


■-  ti   3 

g.|  I 
^1  I 

Five  years 
No  limit  . 
Fivp  vpflrs 


No  limit 
Onp  vpar 


o  c  — M 

3    *  ^    >» 

cd        o  .2 

"I  I'H 

5  S"o 

.    Yes 
.    No 

-      Kn  _ 


•^.2  3 
P  *  ti 

J;   N   3e- 

ex  GJ   *-• 

3  S    ?^ 


No 


5      o.S 

o  £  "^  3 
Q  —  a)  -^ 

a  £  o 

.  No 
.  No 
.    No 


No 

-SflL. 


Colorado 
Connecticut 
Delaware    . 
District  of  Colum 
Florida  .     .     . 
Georgia      .    . 
Idaho     .     .     . 
Illinois  .     .     . 
Indiana      .     . 
Indian  Territory 
Iowa      .     .     . 
Kansas  .     .     . 
Kentucky  .     . 
Louisiana  .     ■ 
Maine    .     .     . 
Maryland  . 
Massachusetts 
Michit^an    .     . 
Minnesrita  . 
Mississi[ipi 
Missouri      .     . 
Montana     .     . 
Nebraska    .     . 
Nevada       .     . 
New  Hampshire 
New  Jersey     . 
New  Mexico  . 
New  York  .     . 
North  (Carolina 
North  Dakota 
Ohio       .     . 
OkhiiioiiiA  . 
Or.-K-n   •     . 
I'ennsvlvaiiia 
Khod.' Miiii.l 
Hiiuth  ( 'iiriilinn 
South  Dakota 
Ti-niii'ssee  . 
Texas    . 
I'lah       .     .     . 
Vermont     .     . 
Virjjiiiia      .     . 
Wanhiiij^fon    . 
West  Yirjjinia 
Wisconsin  . 
Wyoming  .     . 


bia 


None 

None 

None 

None 

None 

None 

None 

None 

Mfg.  COS.  18  nios 

None  . 

None  . 

None  . 

None  . 

None  . 

None  . 
Four  years 

None  . 

None  . 

,     None  . 

None  . 
bd'/g  immediately 
.  None 
.  None 
.  None 
.  None 
.  None 
.     None 

witliin  one  }'ear 

.     None  . 

.     None  . 

.     None  . 

.     Ntme  . 

.     None  . 
lin  two  years 

.     None  . 

.     None  . 

.     Nunc  . 

.    None  . 

,    None  . 

None  . 

.     None  . 

.     None  • 

.     None  . 

.     None  . 

.     None  . 

.    None  . 


One 


No  limit  . 
No  linut  . 
Two  years 
No  limit  . 
No  limit  . 
Two  years 
One  year  . 
Two  years 
No  limit  . 
No  limit  . 
Two  years 
One  year  . 
T\vo  years 
No  limit  . 
Two  years 
No  limit  . 
No  limit  . 
No  limit  . 
No  limit  . 
No  limit  . 
No  limit  . 
One  year  . 
One  year  . 
Two  years 
Three  years 
No  limit  . 
Two  years 
Two  years 
Two  years 
One  year  . 
Five  years 
One  year  . 
One  year  . 
Two  yenrx 
Two  yenrn 
Two  years 
One  year  . 
No  limit  . 
Tliree  years 
Two  yearn 
No  limit  . 
Two  years 
No  limit  . 
year  (six  mont 
One  year  . 
No  Ifinit    . 


hs) 


No 

No 

Yes 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

Yes 

Yes 

No 

No 

No 

No 

Yes 

No 

No 

Yes 

No 

No 
.  Yes 
.  No 
.  Yes 
.  No 
cs  (in  part) 
.  No 
.     No 

Yes 

No 

No 

No 

No 

No 

No 

Yes 

No 
No 


No 
No 
Yes 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
Yea 
No 
No 
No 
No 
No 
Yes 
No 
Yes 
.  No 
(certain  cases) 
No 
No 
Yes 
No 
No 
No 
No 
No 
No 
Yes 
No 
No 

581 


INCORPORATION   AND   ORGANIZATION    OF   CORPORATIONS. 


TABLE   XII. 

TABULATED    QUESTIONS   AND   ANSWERS  {Continued.-) 


To  « 
00    2J    9) 

c.  's. 

*  o  o  0) 

0)    u  -^   08 

Alabama Yes     . 

Alaska No 

Arizona No 

Arkansas No 

California No 

Colorado Yes     . 

Connecticut    ....  Yes    . 

Delaware Yes     . 

District  of  Columbia    .  No 

Florida No 

Georjifia No 

Idaho No 

Illinois Yes     . 

Indiana No 

Indian  Territory      .     .  No 

Iowa Yes    . 

Kansas Yes     . 

Kentucky Yes     . 

Louisiana No 

Maine Yes     . 

Maryland No 

Massachusetts     .     .     .  Yes     . 

Michigan Yes     . 

Minnesota Yes     . 

Mississippi      ....  No 

Missouri No 

Montana Yes     . 

Nebraska No 

Nevada Yes     . 

New  Hampshire       .     .  No 

New  Jersey     ....  Yes    . 

New  Mexico   ....  Yes    . 

New  York No 

North  Carolina    .     .     .  Yes    . 

North  Dakota      .     .     .  Yes     . 

Ohio Yes     . 

Oklahoma Yes     . 

Oretjon No 

Pennsylvania.     .     .     .  Yes     . 

Rhode  Island.     ...  Yes     . 

South  Carolina    .     .     .  Yes    . 

South  Dakota      .     .     .  Yes     . 

Tennessee No 

Texas No 

Utah No 

Vermont No 

Virf^iiiia Yes     . 

Wasliinfjton         .     .     .  No 

West  Virginia     .     .     .  Yes     . 

Wisconsin Yes     . 

Wyoming Yes    . 

582 


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«.i 

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p 

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©.1S 

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.!•§ 

<^s 

III 

©■"" 

11 

N    ^    ta 

"Jo 

3   (U 

o  a 

S    4)    -, 

11 

3  m 

Doei 
author 
busine 
iary  S 

S  rt  2 

C9  <J    OJ 

.    .    Yes    . 

.    No     . 

.    No     . 

.    No 

.     .    No      . 

.    .    No     . 

.    .     Yes    . 

,    .    No 

.     .    No     . 

.     .    No      . 

.     .     Yes     . 

.    .    No 

.     .    No     . 

,     .    No      . 

.    No     . 

.    No 

.    .    No      . 

.    .    No      . 

.     .     Yes    . 

.    No 

.    .    No     . 

.    .    Yes    . 

.     .    No     , 

.    .    No 

.    .    Yes    . 

.    .    Yes    . 

.     .    No     . 

.    .    No 

.     .    Yes    . 

.     .     Yes     . 

.    .    No     . 

.    .    No 

.     .    No      . 

.    No     . 

.     .    Yes    . 

.     .    No 

.    .    No      . 

.    Yes    . 

.     .    No     . 

.    No 

.     .    No      . 

.     .    No      . 

.    .    No      . 

.    .    No 

.    .    No      . 

.     .    No      . 

.    .    Yes    . 

.     .    No 

.     .    No      . 

.     .    Yes    . 

.    .    Yes    . 

.     .    No 

.     .    No      . 

.     .    No     . 

.    .    No     . 

.     .     No 

.    .    No      . 

.    .    No      . 

.     .     No      . 

.     .    No 

.     .    Yes    . 

.    .    No     . 

.     Yes    . 

.    No 

.     .     No      . 

.    Yes    . 

,     .     Yes     . 

.     .     Yes 

.     .    No      . 

.    Yes    . 

.     No      . 

.    No 

.     .     No      . 

.    No     . 

.    No      . 

.    No 

.     .     Yes    . 

.    No      . 

.    No      . 

.    No 

.     .    Yes     . 

.    No      . 

.    Yes    . 

.    No 

.     .    Yes    . 

.    No      . 

.    No      . 

.    No 

.     .    Yes    . 

.    No      . 

.    No      . 

.    No 

.     .    Yes    . 

.    No      . 

.     No     . 

.    No 

.     .    No     . 

.    No     . 

.    Yes    . 

.    No 

.    .    No      . 

.     No      . 

.    No      . 

.    Yes 

.    .    No     . 

.     .     No      . 

.     Yes     . 

.    No 

.     .    No     . 

.    No      . 

.    Yes    . 

.    No 

.    .    Yes    . 

.     Yes    . 

.    No     . 

.    No 

.     .    No     . 

.    No      . 

.    Yes    . 

.    No 

.     .    Yes     . 

.    Yes    . 

.    No      . 

.     No 

.     .    No      . 

.    No      . 

.    No      . 

.    No 

.     .    Yes    . 

.     Yes     . 

.     No      . 

.    No 

.    .    Yes    . 

.    Yes    . 

.     No      . 

.    No 

.     .     Yes    . 

.     No     . 

.    Yes    . 

.    No 

.     .    Yes    . 

.    Yes    . 

.     Yes     . 

.    Yes 

.     .     Yes    . 

.    No     . 

.     Yes     . 

.    No 

.     .     No      . 

.    No      . 

.     No      . 

.    No 

.     .     No      . 

.     Yes    . 

.     No      . 

.    Yes 

.     .     No      . 

.     No      . 

.     Yes    . 

.    No 

.     .     No      .     . 

.     No      .     . 

.    No      .     . 

.    No 

.     .     Yes    . 

.     No      . 

.    Yes    .    . 

.    No 

.     .    No     . 

.     No      . 

.     Yes     . 

.     Yes 

.    .     No     . 

.     Yes    . 

.     Yes     . 

.     Yes 

.     .    No     . 

.     Yes     . 

.    No      . 

.    No 

.    .    No     . 

.    No      . 

.    Yes    . 

.     No 

.     .     Yes    . 

.     Yes     . 

.    No      . 

.    No 

.     .     No      . 

.     No      . 

.    No     . 

.    No 

.     .     Yes     . 

.    .    No      . 

.    No      . 

.    No 

.     .     No      . 

.     No      . 

.    No      . 

.    No 

.    .    Yes    . 

.    Yes    . 

.    Yes     . 

.    Yes 

QUESTIONS   AND   ANSWERS   RELATIVE   TO    CORPORATION   ACTS. 


TABLE  XIII. 

TABULATED   QUESTIONS   AND   ANSWERS  {Continued). 


^  Ss 

Alabama Unlimited      .    . 

Alaska Fifty  \-ears    .     . 

Arizona Twenty-five  years 

Arkansas Unlimited     ".     . 

Colorado Twenty  years    .     , 

Connecticut Unlimited      .     . 

Delaware [.'nliniited      .    . 

District  of  Columbia  .     .     .  Unlimited      .     .    . 

Florida Unlimited      .     .     . 

Georgia Twenty  years    . 

Idaho         Fifty  years    .     . 

Illinois  ■ Ninety-nine  years 

Indiana      .     .     .     Fifty  years,  others  perpetual 

Indian  Territory     .     .     ."   .  Unlimited 

Iowa Twenty  years 

Kansas Twenty  years 

Kentucky Unlimited 

Louisiana Ninety-nine  y 

Maine Unlimited 

Maryland Forty  years 

Massachusetts Unlimited 

Michigan Thirty  years 

Minnesota Thirty  years 

Mississippi Fifty  years 

Missouri    .......  Fifty  years 

Montana Tweiitv  years 

Nebraska rnlimlted 

Nevada I'nlimited 

New  Hampshire     ....  Unlimited 

New  Jersey (Jnlimited 

New  Mexico Fiftv  years 

New  York Unlimited 

North  (.'arolina rnliinitcd 

North  Dakota Twentv  years 

Ohio UnliiiiiU'd 

<')klalioma Twenty  years 

Oregon Unliinilett 

renn«ylvania Cnliiiiited 

Khode  Island Uiiiimiied 

South  Carolina Unliniiled 

South  Diikiita Tweritv  years 

'IViiiiCHsee I'liliinited 

Texas Kiftv  venrs 

Utah 3  to'  lf«)  years 

Vermont Unlimited 

Virginia Unlimited 

Washington Fifty  years 

West  Virginia Fiftv  years 

Wisconsin Unlimited 

Wyoming Fifty  years 


.£•-  a; 

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Yes    . 

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Yes    . 

.    TesT 

Yes     . 

.    No     . 

Yes    . 

.    No     . 

No     . 

.     No      . 

No     . 

.     No      . 

No      . 

.     No      . 

Yes    . 

.     No      . 

Yes    . 

.     No      . 

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.     No      . 

Yes    . 

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Yes     . 

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Yes     . 

.     No      . 

Yes     . 

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Yes     . 

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Yes     . 

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Yes     . 

.     Yes     . 

Yes     . 

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Yes     . 

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Yes     . 

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Yes     . 

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.     Yes     . 

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.     No      . 

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No 

.     No      . 

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r)S:} 


INCORPORATION   AND   ORGANIZATION   OF  CORPORATIONS. 


TABLE   XIV. 

TABULATED   QUESTIONS   AND   ANSWERS  {Continued). 


Alabama Three  up    .     . 

Alaska Three  up    .     . 

Arizona One  or  more    . 

Arkansas Three  or  more 

California Five  or  more  . 

Colorado Three  to  thirteen 

Connecticut Three  or  more 

Delaware Three  or  more 

District  of  Columbia  .     .  Three  to  fifteen 

Florida One  or  more    . 

Georgia One  or  more    . 

Idaho Five  to  eleven 

Illinois Five  to  eleven 

Indiana Three  to  thirteen 

Indian  Territor}'    .     .     .  Three  or  more 

Iowa One  or  more    . 

Kansas Three  to  twenty-four 

Kentucky Three  or  more 

Louisiana One  or  more    . 

Maine Three  or  more 

Maryland Four  to  twelve 

Massachusetts    ....  Three  or  more 

Michigan Three  or  more 

Minnesota Three  to  fifteen 

Mississippi One  or  more    . 

Jlissouri Three  to  thirteen 

Montana Three  to  thirteen 

Nebraska One  or  more    . 

Nevada Three  or  more 

New  Hampshire     .     .     .  Three  or  more 

New  Jersey Three  or  more 

New  Mexico      ....  Three  or  more 

New  York Three  or  more 

North  Carolina  ....  Three  or  more 

North  Dakota    ....  Three  to  eleven 

Ohio Five  to  fifteen 

Oklahoma Three  to  eleven 

Oregon Three  or  more 

Pennsylvania    ....  Three  or  more 

Rhode  Island     ....  One  or  more    . 

South  Carolina  ....  One  to  nine     . 

South  Dakota    .     .     .     .  Three  to  eleven 

Tennessee Five  or  more  . 

Texas Three  to  thirteen 

Utah Three  to  twenty-five 

Vermont Three  or  more 

Virginia Three  or  more 

Washington Two  or  more   . 

West  Virginia  ....  One  or  more    . 

Wisconsin Three  or  more 

Wyoming Three  to  nine  . 

584 


c;  to 


Oi    o 


Yes 

No 

No 

Yes 

Yes 

Y'es 

Yes 

Y'es 

No 

No 

Yes 

No 

Yes 

Y'es 

Yes 

No 

Y'es 

Yes 

Y'es 

No 

No 

Yes 

No 

No 

Yes 

Yes 

Y'es 

No 

Y'es 

No 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

No 

Yes 

Yes 

Yes 

Y'es 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

Yes 


'21 

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in    board    by    1 
directors  ? 

No    . 

.    Yes 

No    . 

.     Yes 

No     . 

.    No 

No     . 

.     Yes 

No    . 

.    Y'es 

No     . 

.    Y'es 

Yes   . 

.    Yes 

Y'es   . 

.    Yes 

No    . 

.    Yes 

No    . 

.     Yes 

No    . 

.    No 

No    . 

.    Yes 

Yes   . 

.    No 

No    . 

.     No 

No    . 

.    Y'es 

No    . 

.    No 

No    . 

.    No 

Yes   . 

.    Y'es 

No    . 

.    No 

Yes    . 

.    No 

No    . 

.    Yes 

Yes    . 

.    Y'es 

No     . 

.    Yes 

Yes   . 

.    No 

No     . 

.     No 

Yes   . 

.     Yes 

No     . 

.    Yes 

No    . 

.    No 

Yes    . 

.    Yes 

No     . 

.    No 

Yes    . 

.    Y'es 

No     . 

.    No 

Yes   . 

.    Yes 

Yes    . 

.    Yes 

No     . 

.    Yes 

No     . 

.    Yes 

No     . 

.    Yes 

No     . 

.    No 

Yes   . 

.    Yes 

No    . 

.    No 

No     . 

.    No 

No    . 

.    Yes 

No    . 

.     Yes 

No    . 

.    Yes 

No    . 

.    Yes 

No    . 

.    No 

Yes   . 

.     Y'es 

No     . 

.    Yes 

No     . 

.    Y'es 

Yes   . 

.     Yes 

No    . 

.    Yea 

QUESTIONS  AND   ANSWERS  RELATIVE   TO    CORPORATION   ACTS. 


TABLE   XY. 
TABULATED    QUESTIONS   AND   ANSWERS  {Continued:). 


u   ai 


■   9-  -^ 


Alabama     .     .     . 

No 

Alaska  .     .     .     . 

No 

Arizona       .     .     . 

No 

Arkansas    .     .     . 

No 

California  .     .     . 

Yes 

Colorado     .     ,     . 

No 

Connecticut     .     . 

No 

Delaware    .     .     . 

No 

Dist.  of  Columbia 

Yes 

Florida  .... 

Yes 

Georgia       .     .     . 
Maho      .     .     .     . 

No 
Yes 

Illinois  .     .     .     . 

Yes 

Indiana.     .     .     . 

Yes 

Indian  Territory  . 

No 

Iowa 

No 

Kansas  .... 

No 

Kentuckv  .     .     . 

Y.'s 

Louisiana   .     .     . 

No 

Maine     .     .     .     . 

No 

Maryland    .     .     . 

No 

Massachusetts 

No 

Michigan    .     .     . 

Yes 

Minnesota  .     .     . 

Yes 

Mis.sissi|ipi       .     . 

No 

Missouri      .     . 

No 

Montana     .     .     . 

Yes 

Nebra-ka    .     .     . 

Yes 

Nevada  .... 

No 

New  Hampshire  . 

No 

New  .lersev      .     . 

No 

New  .Mexico    .     . 

No 

New  York  .      .     . 

No 

North  Carolina     . 

No 

North  Dakota 

No 

Ohio 

N.. 

Oklahoma  .     .     . 

No 

Oregon   .... 

No 

I'lfntisvlvania  .     . 

Y.-s 

Khod-  Island  .     . 

Yet 

South  <  'iirol.na     . 

No 

South  Dakota 

No 

TennfsM.e   .     .     . 

No 

Texas     .     .     .     . 

Y.-H 

Utah       .     .     .     . 

No 

Venniiiit      .     . 

No 

Virginia      .      .     . 

Y.-s 

Washington     . 

No 

W(;st  Virginia 

YfH 

Wi-tconsin  .     . 

Y.t 

Wyoming  .     .     . 

No 

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President  and  Secretary  or  Treasurer 

Not  designated     .     .     . 

Not  designated     .     .     . 

Not  designated     .     .     . 

President  and  Secretary 

Not  designated     .     .     . 

Pres.  or  Vice-Pres.  and  Sec.  or  Ass. 

and  Treas.  or  .Ass. 
President  and  Treasurer 
Not  designated  .  .  . 
Not  designated  .  .  . 
Not  designated  .  .  . 
President  and  Secretary 
Not  designated    .     .     . 

Treasurer 

Not  designated     .     .     . 


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Not  designated 
Not  designated 
Not  designated 
Not  designated 
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'  Clerk  or  Treasurer 

Not  designated     .     .     . 
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Not  designated      .     .     . 
Not  designated     .     .     . 
Not  designated      .     .     . 
Not  designated      .     .     . 
President  and  Secretary 
Not  designated      ... 
Pres.  or  Vice-Pres.  and  Se 
Treasurer  or  Cashier 
President  and  Treasurer 
Not  designatol     .     .     . 
Pres.  or  Vice-Pres.  and  Sec 
President  and  Secretary  or 
President  ond  Sccrclnrv 
PresidcMit  and  Secretary 
I'resideiit  and  Secretary 
Not  designated  .     . 

I'resiilenl  and  Treasurer 
Nut  liesignnted      .     .     . 

TreBHurer 

Preiident  and  Secretary 
Not  dedgiinlud     .     .     . 
Not  designated      ,     .     . 
Not  de-ignated     .     .     . 
Not  ilcigfinled     .     .     . 
I'ret.  or  Viee-Preit.  and  Trenii 
Not  de.ignnted      .... 
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Ni't  d.-igiinled     .... 
.Not  d  Mgnaled     .... 


and  Cashier, 


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.  No 
.  No 
.  No 
.  No 
.  No 
Forbidde 

Se*^-'  j  Yes 

Yes 
No 

No 
No 
No 
No 
No 
No 
No 
No 
No 
No 

I  No 

No 
No 
No 
No 
No 
No 
No 
No 
No 
No 
Yes 
No 
No 
No 
No 
No 

Yes 

No 
No 
Yen 
No 
No 
No 
No 
No 
N.. 

Ye« 

No 
Yen 
No 
No 


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•£!  a. 

.  Y'es 

.  Yes 

.  Y'es 

.  Yes 

.  Yes 

.  Y'es 

.  Y'es 

.  Y'es 

.  No 

.  Y'es 

.  No 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Y'es 

.  Y'es 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  No 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 

.  Yes 


585 


INCOUrOUATION    AND   ORGANIZATION    OF   CORPORATIONS. 


TABLE   XVI. 
TABULATED    QUESTIONS    AND    ANSWERS  (Continued). 


«  <"  p 


0)    0-- 


Alabama Yes 

Alaska Yes 

Arizona Yes 

Arkansas Yes 

California Yes 

Colorado Yes 

Connecticut      ....  Yes 

Delaware Yes 

District  of  Columbia     .  Yes 

Florida Yes 

Georfjia Yes 

Idaho Yes 

Illinois Yes 

Indiana Yes 

Indian  Territory  .     .     .  Yes 

Iowa  .......  Yes 

Kansas Yes 

Kentucky Yes 

Louisiana Yes 

Maine Yes 

Maryland Yes 

Massachusetts       .     •     .  Yes 

Michigan Yes 

Minnesota Yes 

Mississippi Yes 

Missouri Yes 

Montana Yes 

Nebraska Yes 

Nevada Yes 

New  Hampshire  .     .     •  Yes 

New  Jersey      ....  Yes 

New  Mexico    ....  Yes 

New  York Yes 

North  Carolina     .     .     .  Yes 

North  Dakota       .     .     .  Yes 

Ohio Yes 

Oklahoma Yes 

Oregon Yes 

I'ennsylvania  ....  Yes 

Rhode' Island   ....  Yes 

South  Carolina     .     .     .  Yes 

South  Dakota  ....  Yes 

Tennessee Yes 

Texas     ....      Yes  (increase) 

Utah Yes 

Vermont Yes 

Virginia Yes 

Washington     ....  Yes 

West  Virginia      .     .     .  Yes 

Wisconsin Yes 

Wyoming Yes 

586 


o  ° 


►<  «  S 

■t^  u 

U  t.   3 

*  0)    CL 

9  C.§ 


Yes 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

No 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

No 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

No 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

No 

Yes 

Yes 

Yes 


g  S 


^,    V    u 
QJ    ^     O 


Yes 

Yes 

Yes 

Yes 

Y'es 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Y'es 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Y'es 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

No 

Yes 

Yes 

Yes 


t»  «  a  " 
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u  o  2 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Y'es  . 

.  Yes  . 

.  No  . 

.  Yes  . 

.  No  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Y'es  . 

.  Yes  . 

.  No  . 

.  Yes  . 

.  Yes  . 

.  No  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  No  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  No  . 

.  Yes  . 

.  No  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

,  Yes  . 

.  Yes  . 

.  Yes  . 

.  Yes  . 

.  No  . 


5-? -3 


.     Yes 
.     No 
Practically  so 

No 

No 

No 

No 
Practically  so 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

Yes 

No 

No 

No 

No 

No 

No 

No 

Practically  so 
Practically  so 

No 

No 

Yes 

No 

No 

No 

No 

No 

Yes 

No 

Yes 

No 

No 


QUESTIONS   AND   ANSWERS  RELATIVE   TO    CORPORATION   ACTS. 


TABLE   XVII. 
TABULATED  QUESTIONS   AND   ANSWERS  {Continued^ 


itorv 


Alabama  . 
Alaska 
Arizona    . 
Arkansas 
California 
Colorado 
Connecticut 
Delaware 
District  of  C 
Florida     . 
Georgia    . 
Idaho  .    . 
Illinois 
Indiana    . 
Indian  Terr 
Iowa    .    . 
Kansas     . 
Kentucky 
Louisiana 
Maine  .     . 
Maryland 
Massachusetts 
Michigan 
Minnesota 
Mississi[)i)i 
Missouri  . 
Montana  . 
Nebraska 
Nevada     . 
New  Hampshire 
New  Jersey 
New  Mexico 
New  York 
Nortlj  ("arolina 
North  Dakota 
Ohio    ... 
Oklahoma 
OreKf>n     .     ■ 
Pennnylvanift 
Rhode  Inland 
South  ( 'arolina 
South  Dakota 
Tennessee     . 
Texas  .     .    . 
Utah    .     .    . 
Vermont  .     . 
Virginia  .     . 
WathinKton 
Wi!»t  Virginia 
Wisconsin 
Wyoming     . 


.  No 
.  No 
,  No 
,  No 
.  No 
,  No 

No 
.  Yes 
,  No 
,  No 
,  No 

No 

No   , 

No 

No   , 
,  No 
,  No 
,  No 
,  No 

Yes 
.  No 

Yes 
.  No 
.  No 
.  No 
.  No 

No 
.  No 
.  Yes 
.  No 
.  Yes 
.  No 
.  Yes 
.  Yes 
.  No 
.  No 
.  No 
.  No 
.  No 
.  No 
.  No 
.  No 
.  No 
.  No 
.  No 
.  No 

.    v., 

.     Y.-s 
.    No 


%   Z   ^ 


g  ^  =* 


S  a. 

Y'es 

Y'es 

No 

Yes 

Y'es 

Yes 

Yes 

Yes 

Yes 

Y'es 

Yes 

Yes 

Yes 

Y'es 

Yes 

No 

Yes 

Y'es 

No 

Y'es 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 

Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yes 
Yei 
Yes 
Ye. 
Yes 
Yes 
Y.S 
Y.-S 
y.-s 
Ytyi 
Yci 


o  ^  « 

U    U    hi 

>>°  % 

£    a    ai 

&—  Z 

X    S    g 


Y'es 

No 

No 

No 

No 

No 

Y'es 

Yes 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 

No 
Yes 

No 

Yes 

No 

Yes 

Yes 

No 

No 

No 

No 

No 

No 

No 

No 

Yes 

No 

Yei 

No 

Yes 

No 

Ye« 

Y.s 

No 


-S  £  S  ffl 

t:  o  p-o 


Five  years 
Three  years 
None  desi<:nated 
None  designated 
None  designated 
None  designated 
None  designated 
All  necessary  time 
None  designated 
Three  vears 
None  designated 
None  designated 
Two  years 
Three  years 
None  designated 
None  designated 
Any  necessary  period 
Any  necessary  period 
None  designated 
Three  years 
All  necessary  time 
Three  years 
Three  years 
Three  years 
Three  years 
None  designated 
None  designated 
None  designated 
None  designated 
Three  vears 
None  designated 
None  designated 
None  designated 
Three  vears 
Nniii-  di'sigiinled 
None  dfsignated 
None  (leHignatvd 
Five  yrnrH 
None  (lefiignalcd 
Three    years 
None  <lei>ignnled 
None  denignated 
Five  vcarR 
None  ilexignated 
None  dexignatcd 
Threr  ve«r» 
None  ifrfiignalpd 
NiiMo  di'KJgnnted 
N'ino  (IrKignated 
Three  vears 
None  denignated 

:i^7 


GENERAL  INDEX. 


[The  references  are  to  pages.] 


A. 

ABANDONMENT, 

non-user  of  corporate  franchise  as  a  ground  for  forfeiture  .     .  158-159 

of  corporate  powers 158-159 

suspending  ordinary  business 159 

ABSENT   STOCKHOLDERS, 

may  vote  by  proxy 49,  104 

ACCEPTANCE, 

by  State  of  surrender  of  charter .155 

necessity  of  acceptance  of  resignation  of  directors      ...  .     101 

ACCEPTING   BENEFIT, 

in  its  relation  to  doctrine  of  estoppel .     .       03 

ACCOUNT   BOOKS.     (See  Books  of  Account.) 

ACKNOWLED(iMENT, 

of  certificate  of  incorporation .     .      79-80 

ACQUIESCENCE, 

effect  of 04 

ACTIONS, 

by  creditors 142-1 13 

by  State  to  enforcft  forfeiture  of  cliarter 157-158 

by  stockholders 150-157 

for  assessments 1  j'j 

ADOPTION.     (See  Ratification.) 

ADOPTION   OF   BY-LAWS 99-100 

by  directors 75 

ADVANTAGES, 

of  corf)orate  organization 4-5 

AFFIDAVIT, 

anti-tru8t 81 

as  to  amount  of  stock  juiid  in 72-73 

8ub8cribe<l 81 

as  to  payment  of  stock S1-H2 

as  to  publication so 

AGENT, 

ai)pointment  of 180 

certificate  of  appointment  of 180 

service  of  process  upon 180 

589 


GENERAL   INDEX. 

AGREEMEXTS, 

to  consolidate 77 

voting  trust 103 

ALIENATION. 

of  franchise  of  being  a  corporation  not  permitted 51-52 

power  of,  by  corporations 51-52 

ALIENS, 

may  be  directors 101 

may  become  incorporators 13 

ALTERATION, 

of  by-laws 100 

of  charter 46,  145-152 

of  name 41 

of  number  of  directors 46 

of  par  value  of  shares 57 

AMBIGUITIES, 

in  corporate  grant  is  resolved  in  favor  of  public 77-78 

AMENDMENT, 

change  of  capitalization 41 

corporate  agent 47 

domiciliary  office 42 

duration  of  corporate  existence 40-41 

name 41 

number  of  directors 46 

par  value  of  shares 57 

place  of  business 47 

powers 56-57 

purposes  46,  145-152 

decrease  of  capital  stock 41 

increase  of  capital  stock 41 

of  charter  by  directors 146 

stockholders 145-152 

of  charters 145-152 

before  organization 58 

AMOTION, 

of  directors 60-61 

of  officers 60-61 

AMOUNT, 

limitations  upon  amount  of  capital  stock 69-70 

of  stock  paid  in 72 

subscriptions 70-71 

with  which  a  corporation  may  begin  business    ....      73 
ANNUAL   LICENSE    TAX, 

upon  foreign  corporations 199-202 

ANNUAL   MEETING, 

date  of 74 

place  for  holding 40 

ANNUAL  REPORTS.     (See  Reports.) 

ANTI-TRUST    AFFIDAVIT 81 

ANTI-TRUST   LEGISLATION 167-168 

500 


GENERAL   INDEX. 


APPLICATION^   FOR   CHARTERS, 


form  of 


80 


'■efusal  of 80,  82-83 

APPOINTMENT, 

of  executive  committee 107-108 

of  resident  agent joq 

APPRAISAL   OF   PROPERTY, 

by  directors 137-138 

by  State  officials 139-141 

taken  by  a  corporation  in  exchange  for  capital  stock       .     .     .  137-138 
ARTICLES  OF   AGREEMENT, 

purpose  of jq 

ARTICLES   OF   ASSOCIATION, 

synonymous  with  charter U 

ARTICLES   OR   CERTIFICATE   OF  INCORPORATION, 

acknowledgment  of 79-80 

amendment  of 145-152 

contents  of U 

defects  in 8q 

evidentiary  effect  of og 

filing,  publishing,  and  recording  of 80,  86-87 

miscellaneous  provisions  relative  to  contents  of 76-77 

publishing gQ 

recording 86-87 

remarks  on 9 

signing 79 

synonymous  with  charter n 

ASSENT   OF   STOCKHOLDERS, 

to  by-laws 100 

to  preferred  stock 45 

ASSESSMENTS, 

forfeiture  of  shares  for  non-payment  of  stock 108-109 

power  to  levy 4S_49 

ASSETS, 

of  corporations  liable  for  thf;ir  debts 114 

power  of  corporation  to  dispose  of  its  entire 51-52 

ATTORNEY-fJENERAL, 

approval  of  articles  by 77 

bringing  of  quo  warranto  proceedinga  by ir)7 

n. 

BENEFITS, 

doctrine  tliat  the  reception  of  benefits  under  an  ultra  i'ir«  contract 

cuts  off  the  right  to  Bet  up  its  illfgality 03 

BEQUESTS, 

power  of  corporation  to  accept 33 

nOAKI)   OF    DIIiKCToliS.     (See  DiiiKCTons.) 

HOARD   OF    M ANAGK.MKNT 07 

BONA    FIDE    PURCHASERS   OF    SIIARFIS, 

liability  of,  to  crediiorn 171-17'J 

591 


GENERAL   INDEX. 

BONDED   INDEBTEDNESS, 

limitations  upon (See  Part  II.) 

BONDHOLDERS, 

right  to  participate  in  election  of  directors 57 

BONDS, 

po^yc^  to  issue 60 

BONUS, 

to  be  paid  to  the  State  upon  creation  of  corporations      .    .     .      84-85 

BONUS   STOCK,  143 

BOOKS, 

inspection  of  corporate 165-167 

open  to  inspection  of  creditors 165-167 

stockholders        165-167 

-what  books  corporations  required  to  keep (See  Part  11.) 

where  kept 65-66 

BOOKS   OF  ACCOUNT.     (See  Books.) 

BORROW, 

incidental  power  of  corporations  to 60 

BREACHES   of   TRUST, 

by  directors 174-176 

BURDEN  OF  PROOF, 

when  thrown  upon  creditors  in  attacking  valuation  of  property 

taken  in  exchange  for  stock 125-137 

when  thrown  upon  stockholders  in  attacking  valuation  of  property 

taken  in  exchange  for  stock 125-137 

BUSINESS, 

entire,  may  be  transacted  outside  of  domiciliary  State    ....       40 

power  to  transact,  outside  of  domiciliary  State 38-40 

principal  place  of o6 

BUSINESS   CORPORATION, 

meaning  of  term 9 

BY-LAWS, 

adoption  of 99-100 

by  directors 75 

alteration  of 99-100 

book  of 100 

definition  of 99 

inherent  power  to  make 33 

mode  of  enacting 33 

power  of  directors  to  adopt 55-56 

of  stockholders  to  adopt 99 

to  enact 33 

to  inflict  penalties  for  violation  of (See  Part  II.) 

statutony  provisions  relative  to 100 

c. 

CAPITAL, 

liability  of  directors  for  declaring  dividends  out  of 174 

•what  is,  when  applied  to  corporations 67-68 

5i)2 


GENERAL   INDEX. 

CAPITAL  STOCK, 

decrease  of 41 

definition  of 67-69 

increase  of 41 

issuance  of 112-113 

limitation  upon  amount  of (See  Part  III.  Table  V.) 

manner  of  payment  of 69,  112-113 

payment  of,  in  cash 113 

property  120-122 

services 120 

CERTIFICATE   OF   CAPITAL   STOCK, 

when  must  issue 110-111 

who  entitled  to 110-111 

■who  must  sign 110-111 

CERTIFICATE  OF  INCORPORATION.    (See  Articles  of  Lncok- 

POKATION.) 

CERTIFICATE    OF   ORGANIZATION, 

synonymous  with  charter 11 

CHANGE   IN   ARTICLES.     (See  AmendmExVT  to  Articles.) 

CHANGE  OF   CORPORATE   NAME       41 

CHARTERS, 

construction  of 77-78 

creation  of  corporations  under 9 

definition  of 10 

essentials  of 11 

form  in  which  granted 86 

nature  of 10 

(See  also  Articles  of  Incorporation.) 
selection  of  matters  to  be  inserted  in     .     .     .    (See  Part  III.  508-570) 

CITIZENS, 

meaning  of  term  in  federal  constitution 181 

CITIZEXSHII'   OF   CORPORATIONS 66 

CLASSIFIC.VTION, 

ofdirect<jrs 57-58 

of  incorporation  acts 7-H 

COLLATERAL    ATTACK, 

upon  corporate  existence 21-28,  8S-92 

upon  corporate  powers 21-28 

upon  corporate  purposes 21-28 

COMBINATIONS, 

in  restraint  of  trade,  unlawful  trusts  for  tli<'  control  <if  corpora- 
tions ami  the  prevention  of  <vjiM|)etiliori  ainoM;^  tlieni  .      .      .  H!7-168 

COMITY, 

doctrine  of  State ls|-l!K) 

COM.MEXC;!-:    BUSINESS, 

time  witliin  whieh  cf)rporation  must  orgauizo  an<l       .     .     .     .  10!I-11<» 

when  cori>oration  entitled  to 92-!'4 

COMMLNCEMEXT   OF   CORI'ORATK    EXISTKNCK  ....      92-91 
COMMKXCKMKXT   OF   OI»KI{  ATIOXS     (See  ('..mmknck  BtsiNKSs.) 
COMMERCE  CLAUSE  C)F  THE  FE1)EK.\L  CONSTITUTIOX    2(12-210 


38 


:ak\ 


GENERAL   INDEX. 

COMMERCIAL   PAPER.     (See  Negotiable  Instruments.) 
COMMISSIONERS, 

to  take  stock  subscriptions 99 

COMMITTEE, 

executive 56,  107-108 

COMMON   LAW  POWERS, 

dotiiiition  of 30-31 

enumeration  of 30-31 

COMPANY, 

does  not  imply  incorporation 14 

COMPETITION, 

combinations  or  trusts  among  corporations  for  the  prevention 

of 167-168 

CONCLUSIVE, 

meaning  of,  in  relation  to  evidentiary  effect  of  documents  ...      26 

CONDITIONS, 

imposed  upon  domestic  corporations  with  reference  to  transaction 
of  business  within  State 145-179 

imposed  upon  foreign  corporations  with  reference  to  transaction 

of  business  within  State 180-210 

CONDITIONS   PRECEDENT, 

to  coming  into  existence  as  a  corporation 93 

CONDITIONS   SUBSEQUENT, 

forfeiture  of  charters  on  the  happening  of 93 

CONSOLIDATION, 

meaning  of 40 

payment  of  taxes  upon 85 

regulation  of  right  of 178-179 

CONSOLIDATION   OF   CORPORATIONS, 

when  power  exists 38 

CONSTITUENT   ACTS, 

power  to  perform  outside  of  domiciliary  State 40 

CONSTITUTIONAL   LAW 181,  202-210 

CONSTITUTIONAL   PROVISIONS, 

creating  individ  ual  liability  of  stockholders  for  corporate  debts    169-174 
CONSTITUTIONAL   RESTRAINTS, 

relative  to  impairing  the  obligations  of  contracts 153-154 

upon  the  creation  of  corporations 9 

CONSTRUCTION   OF   CHARTER 77-78 

CONTRACTS, 

impairing  obligation  of 77-78 

power  of  corporations  to  make 60 

CONTROL   OF   CORPORATIONS, 

who  entitled  to 102 

CORPORATE    AGENTS, 

power  to  appoint 33 

CORPORATE  BOOKS.     (See  Books.) 
CORPORATE   ELECTIONS,     (See  Elections.) 
504 


GENERAL   INDEX. 

CORPORATE   EXISTENCE, 

collateral  attack  upon 21-28,  8S-92 

duration  of 73-7-1 

extension  of 170-177 

power  to  extend 40-41 

proof  of 24-20 

right  of  State  in  direct  proceedings  to  attack 90-92 

when  commences 92-94 

CORPORATE  NAME, 

not  alienable 32 

power  to  chauge 41 

right  to 31 

CORPORATE   OFFICERS, 

election  of 105-107 

power  to  appoint 33 

CORPORATE  POWERS, 

at  common  law 30-31 

classification  of 29-30 

collateral  attack  upon 21-28 

consolidation  of 29 

definition  of 30,  34,  59 

enumeration  of 34-;}5 

express 30,  34,  36 

financial 60 

implied 30-31,  59 

incidental 30,  59-60 

power  of  aruulion 00-61 

to  give  and  accept  evidences  of  debt 60 

mortgage  and  pledge 60 

purchase  corporation's  own  stock 36-37 

purchase  stock  in  other  corporations 37-38 

CORPORATE    PURPOSES, 

collateral  attack  upon l.)-19 

illegal 6-28 

number  of 10-20 

CORPORATE   SEAL, 

right  to  adopt  and  use  a 32 

CORPORATIONS, 

cannot  be  created  V)y  voluntary  agreement 10 

cantK)l  liecoino  inojrporatora '3 

citizenship  of 66 

comtnon  law  jKjwera  of 38 

consoliilation  of 3S,  17H-17n 

created  by  special  act 0-10 

(le/ncto  corjiorationB H7-88 

definition  of 87-88 

domicile  of 60 

express  powcTH  of       .      .  31-36 

extension  of  corporate  cxistonco 40-11 

for  wliat  purposes  may  bo  formed !•' 


i  GENERAL   INDEX. 

CORrORATIONS  —  continued. 

iiK'iiliMital  powers  of 59-60 

name  of 14 

power  of  minority  stockholders  to  compel  purchase  of  holdings     .       47 

to  amend  articles  before  organization 58 

appoint  executive  committee 56 

authorize  directors  to  adopt  by-laws 55-56 

authorize  voting  by  proxy 49 

bestow  upon   bondholder's  right  to  vote  at  corporate 

elections 57 

borrow  money 60 

change  corporate  domicile 47 

change  corporate  name 41 

change  corporate  purposes 46 

change  number  of  directors 46 

change  par  value  of  shares 57 

change  principal  place  of  business 47 

classify  directors 57-58 

diminish  corporate  powers 57 

dispose  of  corporate  assets  as  an  entirety     ....      51-52 
enforce  a  lien  upon  stock  to  secure  payment  of  corporate 

debts 47-48 

enlarge  corporate  powers 56 

forfeit  stock 48-49 

increase  or  decrease  capital  stock 41 

insert  provision  for  regulation  of  internal  affairs  .     .       53-55 

issue  preferred  stock 41-45 

issue  stock  in  exchange  for  services  or  property     .     .      49-50 

levy  assessments 48-49 

make  contracts 60 

perform  constituent  acts 40 

permit  cunmlative  voting 49 

purchase  its  own  stock 36-37 

purchase  stock  in  other  corporations 37-38 

surrender  charter  before  organization 58 

transact  business  outside  of  domiciliary  State  .     .     .      38-40 

voluntarily  dissolve  the  corporation 52-53 

steps  necessary  to  creation  of 12 

time  within  which  corporation  must  organize 109-110 

where  can  be  created  by  special  act       ...         9 

CORPORATOR 12 

COUNTY   OFFICES, 

filing  and  recording  iu 86 

CREDITORS, 

directors'  liability  to 174-176 

right  of,  to  enforce  stockholders'  liability  for  corporate  debts  .  169-174 

insiiect  corporate  books 1(15-167 

stockholders'  liability  to 169-174 

CUMULATIVE   VOTING, 

at  corporate  elections 49 

590 


GENERAL   INDEX, 

D. 

DARTMOUTH   COLLEGE   DECTSIOX 153 

DATE    OF    ANNUAL   MEETING 74 

DEBTS, 

limitation  upon  account  of  corporate 74-75 

power  of  corporations  to  incur 60,  74-75 

DECREASE   OF  CAPITAL   STOCK 41 

DE  FACrO  CORPORATIONS, 87-90 

DEFAULT, 

in  payment  of  annual  tax,  effect  of 160 

DEFINITIONS, 

business  corporation      .     , 9 

capital  stock 68 

incorporation 9 

'  incorporator 12 

shares  of  stock 68 

DE  JURE   CORPORATIONS .      86-90 

DELEGATION, 

of  powers  of  board  of  directors  to  executive  committee    .     .     .  107-108 

DEVISES, 

power  of  corporations  to  accept 33 

DIMIXISIIMENT, 

of  corporate  powers 53 

DIRECTORS, 

adoption  of  by-laws  by 75 

appraisal  of  property  by 137-138 

classification  of 57-58 

election  of 100-104 

first  meeting  of 105-1(17 

nariKMl  in  certificate  are  directors  </ey«re 67 

power  to  adopt  by-laws 55,  90 

.appoint  executive  committee 56 

cbanpe  number  of 16 

voU:  by  proxy 100 

qualification  of • lol-lo'j 

(See  Bdaki)  ok  Manackmknt.) 
statutory  liability  of 174-170. 

DIRECTORY    PROVISIONS, 

wliat  are 91 

DISQUALIFICATION, 

for  the  oflice  of  director li'l 

DISSENTING  DIRECTORS, 

provi.sions  for  tlie  exoneration  of,  from  Htatutory  liability    .     .  151-157 

DISSOLUTION, 

involuntary 150-1.57 

voluntary 52-53,  l.'i.^-l.-'.rt 

DISSOLUTION   OF    CORPORATIONS .^)2-53,  151-1. 'iT 


GENERAL    INDEX. 

riSTTNCTION, 

betwoen  r/t-yure  and  rfe/rtc/o  corporations 87-88 

DIVIDENDS 174 

DOCTKINK   OF   ESTOPPEL       G3-65 

DOCTRINE   OF   STATE   COMITY 184-190 

DOCTRINE    OF    ULTRA    VIRES 61-65 

DOING   BUSINESS, 

what  constitutes  doing  business  by  a  foreign  corporation     .     .  190-195 

DOMESTICATION, 

of  foreign  corporations 198 

DOMESTIC   CORPORATIONS 145-179 

DOMICILE, 

corporate 65-66 

DOMICILE   OF  CORPORATIONS, 

power  to  change  corporate 47 

DOMICILIARY  OFFICE 65-66 

DOUBLE   LIABILITY, 

of  stockholders  to  creditors 173 

DUMMY, 

directors 14 

incorporators 14 

DURATION, 

of  corporate  existence 73-74 

limitations  upon 154-155 

of  office  for  directors 102 


E. 

EFFECT, 

of  appraisal  of  property  by  directors 137-138 

state  officials 139-141 

ELECTION, 

of  corporate  officers 107 

ELECTIONS, 

corporate 100-104 

of  directors 100-104 

ELEEMOSYNARY   CORPORATIONS 9 

ELIGIBILITY, 

as  an  incorporator 14 

to  office  of  director 100-104 

ENLARGEMENT, 

of  corporate  powers 66 

EQUAL   PROTECTION   OF   LAWS 181 

ERROR   OF   JUDGMENT 136 

ESTOPPEL, 

doctrine  of,  in  pais 63-65 

in  case  of  ultra  vires  contracts 63-64 

to  deny  corporate  existence 28 

598 


GENERAL  INDEX. 

EVIDENCE, 

meaning  of  conclusive 26 

prima  facie 26 

of  corporate  existence 24-26,  87-88 

EXCESSIVE   DEBTS 74-75 

EXECUTION, 

of  articles  of  incorporation 79-80 

EXECUTIVE   COMMITTEE, 

appointment  of 107-108 

power  of  directors  to  appoint 56 

powers  of  executive  committee  of  directors 56 

EXEMPTION, 

of  stockholders  from  personal  liability 75 

EXISTENCE  OF  CORPORATION.    (See  Corporate  Existence.) 

EXPIRATION  OF   CHARTER 176 

EXPRESS    POWERS, 

definition  of 34-37 

enumeration  of 34-37 

EXTENSION, 

of  corporate  existence 176-1 1 7 

payment  of  tax  upon 85 

EXTRA-TERRITORIAL  POWERS 38-40,184-190 

F. 

FALSE   REPORT, 

liability  for  directors  making 1""* 

FEDERAL   COURTS, 

right  of  foreign  corporations  to  remove  cases  to 19S 

FEES, 

organization 84-85,177-1.8 

FICTITIOUS   INCREASE, 

of  stock **" 

FICTITIOUS  STOCK      .     .         72,  14:{ 

FILING    CHARTER, 

in  local  county  offices SC-H7 

with  StaUi  officials ^'-'-^^ 

FINANCIAL    POWERS   OF   CORPORATIONS CO 

FINES, 

power  to  enforce  by-laws  by  p<'cuiiiary  finca <!•* 

FIRST    DIliHCTOKS'    MKKTIN(; 10.Vl(i7 

FIRST    (;1:NERAL    INCORPOUAIION    ACT. 

reference  to 

foiii:i(;n  corporations,  ^^^^ 

annual  liceiis'^  tax  on ."7,7, 

...  i:i8-i;t» 

license  tax  on 

penalty  for  transacting  busineas  without  prrniit ^  *"lf,o 

power  to  cxrlude _       ' 

what  constJtuteH  doing  busincM  on  the  part  of IJO-lWo 


GENERAL    INDEX. 

FOREIGN    LAWS, 

extia-tt>rritorial  force  of  statutes  enforcing  liability  upon  direc- 
tors and  stockholders 169-176 

FORFEITL'KE  OF   CHARTERS, 

for  insolvency 160 

for  misuse  or  abuse  of  corporate  powers 159 

for  non-payment  of  taxes IGO 

for  non-performance  of  conditions  precedent 160 

subsequent 160 

for  non-user  of  corporate  franchises 158-159 

for  violation  of  express  statute 160 

FORFEITURE   OF   SHARES 48-49 

FORM, 

in  which  charter  is  granted 86 

FRANCHISES, 

corporation 11 

FRANCHISE  TAX, 

distinction  between  franchise  tax  and  property  tax    ....  177-178 

distinguished  from  organization  tax 84-85 

right  to  impose 178 

FRAUD 127-128 

FRAUDULENT  ISSUE   OF   SHARES 33 

FULL   LIABILITY   CORPORATIONS 174 

FULL-PAID   STOCK 142-143 

FUNDAMENTAL  CHANGES   IN   CHARTER 145-152 

G. 

GIFT   OF  SHARES, 

effect  of,  on  liability  of  stockholders 143-144 

"GOOD   FAITH   RULE," 

for  payment  of  shares  in  property  other  than  money  ....  123-125 
statement  of 123-125 

GRADUATED   ORGANIZATION  TAX, 

right  to  impose 178 

validity  of 85 

GRANT, 

power  to 32-33 

H. 
HOLDING  OVER  BY  DIRECTORS 102 

I. 

ILLEGAL   PURPOSES 28-29 

IMMUNITY, 

from  personal  liability  by  publication  of  articles 80 

IMPLIED   POWERS 59 

INCIDENTAL   POWERS 59-61 

INCORPORATION, 

definition  of 9 

purposes  for  which  corporations  may  be  formed 17-19 

600 


GENERAL   INDEX. 

IXCORPORATIOX   ACTS, 

classification  of 7-8 

INCORPORATORS, 

aliens  may  be 13 

corporations  cannot  be 13 

definition  of 12 

dummy 1-4 

infants  cannot  be 13 

married  women  may  be 13 

may  sign  articles  by  mark 79 

must  be  known  persons 13 

organization  meeting 95-96 

privileges  of 11 

qualifications  of 12 

synonymous  with  corporators 12 

INCREASE, 

in  par  value  of  shares 57 

of  capital  stock 41 

INDEBTEDNESS, 

limitation  upon  corporate 74-75 

INDIVIDUAL   LIABILITY   OF   STOCKHOLDERS       ....  1G9-174 

INFANTS 13 

INSOLVENCY, 

forfeiture  of  charter  for 160 

INSPECTION   OF   BOOKS   AND   RECORDS, 

by  creditors in5-l<)7 

by  stockholders l(ir)-l()7 

INSPECTION    OF   CORPORATE   BOOKS 165-1G7 

INSPECTORS   OF   ELECTION 103-lOi 

INTERNAL   AFFAIRS, 

provisions  for  the  regulation  of 53-55,  76,  168-169 

INTERPRETATION    OF   CHARTER 77-78 

INTER-STATE    CO.M.MERCE, 

clause  of  tlie  Federal  Constitution 202-210 

INTRODUCTION 1 

INVOLUNTARY   DISSOLUTION 150-157 

IPSO  FACTO   DISSOLUTION 154-157 

IPSO   FACTO    FOKKKITrKK 157-160 

ISSUANCE    ANIJ    PAYMENT   OF    CAPITAL   STOCK      .     .     .  llJ-113 


L. 

LAI'.OIl    DKP.TS, 

lial)ility  of  Btockholdera  for 173-174 

LAND, 

j)nwer  of  corjwrationa  to  takf  and  hold 32-33 

LAW    AND   FACT, 

questions  oi *-•' 


GENERAL   INDEX. 

leadixCt  incorporating  states, 

oiuiineration  of 3,  7 

LEASES, 

power  of  corporations  to  accept  leases  in  exchange  for  stock  .  50,  121 
LEGISLATIVE    AUPIIOUITY, 

essential  to  creatitm  of  corporations 10 

LEGISLATIVE   CONTROL, 

over  domestic  corporations 145-179 

over  foreign  corporations 180-210 

LEGISLATIVE    INVESTIGATION, 

into  corporate  aiTairs 164 

LEGISLATIVE    REGULATION, 

of  internal  affairs 167-168 

LEGISLATIVE    REQUIREMENT, 

of  annual  report 164-165 

LEGISLATURE 145 

LETTERS    PATENT, 

when  conclusive  as  to  fact  of  incorporation       24-28 

LIABILITY, 

of  directors.     (See  Directors.) 

of  stockholders.     (See  Stockholders.) 
LIABILITY    OF   STOCKHOLDERS, 

exemption  from 74-75 

LICENSE   TAX, 

upon  foreign  corporations 198-199 

LIEN, 

corporation's  lien  upon  stock  of  its   members  to   secure  debts 

due  it 47-48 

LIMITATIONS, 

upon  amount  of  capital  stock 69-70 

upon  corporate  existence 74-75,  154-155 

upon  power  to  hold  real  property 32-33 

LIST   OF   SHAREHOLDERS, 

failure  to  keep  alphabetical  list  -of  stockholders  not  an  ipso  facto 

dissolution 176 

M. 

MAJORITY, 

of  directors  rule  in  private  corporations 102 

of  stockholders  entitled  to  control  in  private  corporations  .  .  .  102 
MANDAMUS, 

right  of 84 

MANDATORY  PROVISIONS 91 

MANNER   OF   PAYMENT   OF   CAPITAL   STOCK      .     .     69,  113,  120 

MANUFACTURING  CORPORATIONS 173 

MARRIED   WOMEN, 

may  be  incorporators 13 

MAXIMUM   AMOUNT, 

of  indebtedness 82 

602 


GENERAL  INDEX. 

MEETING, 

date  of  annual 74 

organization 95-98 

MEETINGS, 

of  directors •     •  105-107 

for  election  of  directors,  where  held 104 

of  stockholders 40,  9G-98,  104 

MERGER.     See  Consolidation. 

MINING  COMPANIES       131-132 

MINISTERIAL   DUTIES 84 

MINORITY   STOCKHOLDERS, 

power  to  compel  purchase  of  their  stock  upon  consolidation    58-59,  102 

MISCELLANEOUS  PROVISIONS, 

relative  to  contents  of  articles  of  incorporation 76-77 

MISCONDUCT  OF   DIRECTORS.     (See  Amotion.) 
MISTAKES  OF  JUDGMENT, 

in  appraisal  of  property  taken  in  exchange  for  stock       ....     136 

MISUSER, 

a  ground  for  forfeiting  corporate  charter 159 

MONEY, 

payment  for  stock  in 113 

"MONEY  OR  MONEY'S  WORTH"  RULE 113 

MORTGAGE, 

corporate CO 

]>ower  to 60 

MORTGAGE  BONDS GO 


N. 

NAMES   OF  CORPORATIONS, 

corporate  name  not  alienable 31 

purpo.se  of 1*>  31 

power  to  change '*! 

protection  of  corporate 31 

right  to  a  coq>orate  name 14,  31 

similarity  in  corporate  name  forbidden 11,  31 

NEGLKJENX'E, 

liability  of  directors  for I'S 

NEGOTIAHLE    INSTRl'MENTS, 

coq)orate  powers  relating  to •'" 

NON-A.SSESSAHLK    STOCK 111-112 

NONPAYMENT    OF   T.VXKS. 

forfeiture  of  cliart«;r  for 1''*' 

NON-PERFORMANCE   OF   CONDITIONS   PKKCKDKNT. 

forfeiture  of  charter  for ^'''^* 

NON-PERFORMANCE   OF   CONDITIONS   SUBSEQUENT. 

forfeiture  of  charter  for ^"" 

Go:3 


GENERAL   INDEX. 

NON-USER, 

dissolution  of  corporations  for 158-159 

NOTICE, 

of  directors'  meetings 106 

of  incorporators'  meetings 96 

0. 

OATH, 

of  inspectors  of  election 103 

of  office 101 

OFFICE 66 

OFFICERS, 

of  corporations 107 

ONE-MAN   CORPORATIONS 13-14 

ONUS   PROBANDI.     (See  Burden  of  Proof.) 

ORGANIZATION   MEETING   OF   INCORPORATORS, 

how  called 96 

where  held 96-98 

ORGANIZATION   OF   CORPORATIONS, 

certificate  of 109 

steps  necessary  to  complete 98-99 

ORGANIZATION   TAX 84-85 

distinguished  from  franchise  tax 85 

graduated 85 

right  to  impose 178 

ORGANIZE, 

time  within  which  corporations  must 109-110 

OUSTER, 

judgment  of,  in  quo  warranto  proceedings     .     .     .       112-113,  157,  198 

OVERVALUATION, 

of  property  delivered  in  exchange  for  stock 122-137 

P. 

PAID  UP  STOCK, 

meaning  of 142-144 

PARTNERS, 

liability  of  incorporators  as 80,  173 

PAR   VALUE, 

change  in 57 

of  capital  stock 70 

PATENT   RIGHTS .50,121 

PAYMENT   OF   CAPITAL   STOCK 112-120 

certificate  of 109 

in  property 120-122 

in  services 120 

PENALTIES, 

for  violation  of  by-laws 33 

604 


GENERAL  INDEX. 

PENALTY, 

for  failure  to  organize  aud  commence  business 110 

upon    foreign    corporations    for    transacting    business    without 
permit 195-198 

PERPETUAL  SUCCESSION, 

right  of 31-32 

PERSONAL  PROPERTY, 

power  to  hold 32-33 

PETITION    FOR  INCORPORATION, 

synonymous  with  charter 11 

PLACE   OF   BUSINESS 66 

power  to  change 47 

PLEDGE, 

power  to 60 

PLEDGEES, 

liability  of,  for  unpaid  stock  subscriptions 172 

POLICE   POWER lGO-164 

POWER, 

to  impose  organization  taxes 85 

POWER   OF   ATTORNEY, 

signing  articles  by 79 

POWER   OF   STATE   LEGISLATURES, 

over  foreign  corporations 180-181 

POWERS  OF   CORPORATIONS, 

cannot  be  created  by  by-law 29 

classification  of 29-30 

collateral  attack  upon 21,  23 

common  hiw 30-Jil 

consolidation 38 

express 30,  34,  36 

iiicid.-Mital 30,  50-60 

to  ac'juire  and  hold  property  in  trust 33 

to  acquire,  hold,  and  dispose  of  real  and  personal  property  .     .      32-33 

to  aint-nd  articles  before  organization 58 

to  appoint  corjiorate  ofhcers  and  agents 33 

to  appoint  executive  committee 56 

to  authorize  directors  to  adopt  by-laws 55-58 

to  authorize  voting  by  proxy 40 

to  bestow  upon  bondholders  right  to  vote  at  corporate  elections    .       57 

to  borrow  money 6<> 

to  ch.'ingc  coqxjrate  domicile 17 

to  change  corporate  name 41 

to  i-hange  cor]xirat<;  [)iirposc8 46,  115-152 

to  change  number  of  directors '6 

to  change  par  value  of  shares 57 

to  change  I'rinripal  place  of  business 47 

to  classify  direetors 57-58 

to  diminish  cor|>orate  powers 57 

to  dispose  of  cori>oratc  assets  as  an  entirety 51-52 

G05 


GENERAL   INDEX. 

POWERS   OF  CORrORATIONS  — co7W/;i««/. 

to   enforce   a  lieu   upon   stock  to  secure  payment  of  corporate 

debts 47-48 

to  eiilargo  coriiorate  powers 56 

to  establish  by-laws 33 

to  extend  corporate  existence 40-41 

to  forfeit  stock 48-49 

to  hold  meetings  for  election  of  directors  without  domiciliary  State  .    104 

to  increase  or  decrease  capital  stock 41 

to  insert  provision  for  regulation  of  internal  affairs     ....      53-55 

to  issue  preferred  stock 41-45 

to  issue  stock  in  exchange  for  services  or  property 49-50 

to  levy  assessments 48-49 

to  make  contracts 60 

to  organize  subsidiary  companies 37 

to  perform  constituent  acts 40 

outside  of  domiciliary  State  ....       40 

to  permit  cunmlative  voting 49 

to  purchase  its  own  stock 36-37 

to  purchase  stock  in  other  corporations 37-38 

to  sue  and  be  sued 34 

to  surrender  charter  before  organization 58 

to  take  property  by  devise 33 

to  transact  business  outside  of  domiciliary  State 38-40 

to  voluntarily  dissolve  the  corporation 52-53 

PREFERRED   STOCK, 

included  in  amount  of  authorized  capital 68 

power  to  issue 41-45 

PRINCIPAL   PLACE   OF  BUSINESS 66,  82 

PROMOTERS 120 

PROMOTION   STOCK 120 

PROOF   OF   CORPORATE   EXISTENCE 24-26,87-88 

PROPERTY 49,  50,  120-122 

(See  Payment  for  Shares.) 
PROPORTIONATE   LIABILITY 169-174 

PROXY, 

right  to  vote  by 49,  104-105 

directors  cannot  vote  by,  at  board  meetings 108 

PUBLICATION, 

of  annual  reports 164-165,  175 

of  articles  of  incorporation 80 

purpose  of 80 

PUBLIC   POLICY, 

corporate  purposes  opposed  to 29 

PURPOSES, 

collateral  attack  upon  corporate 16-28 

corporate 15-19 

for  whicli  corporations  may  be  formed 15-19 

illegal 28-29 

006 


GENERAL  INDE2L 

PURPOSES  —  continued. 

more  than  one  purpose 19-''0 

number  of  .     .     .' 19-20 

power  to  change  corporate 46  ^  145-152 

Q. 

QUALIFICATIOX   SHARES lOi 

QUALirrCATIONS   OF   DIRECTORS 101 

QUESTIONS    OF   LAW   AND   FACT 125 

QUORUM, 

at  corporate  elections 102 

at  stockholders'  meetings 102 

of  directors lOg 

of  incorporators qq 

QUO    WARRANTO '  I57 

R. 

RATIFICATION 64 

REAL   ESTATE, 

power  to  hold 32-33 

REASONAHLENESS, 

of  corporate  by-laws 100 

RECORDATION, 

of  articles  of  incorporation 86-87 

RECORDS, 

corporate     1G5-167 

REDUCTION   OF   CAPITAL, 

corporate  powers  relative  to 41 

REGULATION, 

of  internal  affairs 53-55,  168-169 

provision  for 76 

of  right  of  consolidation 178-179 

REMOVAL   OF   DIRECTORS C0-(51 

RENEWAL   OF   CHARTER 153-154 

KKJ'KAI 9f)_100 

of  by-laws 153-154 

of  charters 153-154 

REPORTS, 

a"""al KM-IC:. 

leginlativf!  requirenu-nt  of  annual lOl-KIS 

statutory  liability  of  directors  relative  to 171-175 

RKSIDEXCK    OF    COKI'ORATIONS G6 

RESTRAINT   OF   TRADK. 

combinations  in 107-108 

RETALIATORY   TAXATION, 

of  foreign  coriKjralions IJjy 

607 


GENERAL  INDEX. 

RIGHT, 

of  perpetual  succession 31-32 

to  impeach  corporate  existence 88-92 

RULE, 

good  faith 123-125 

speculative  value 125-137 

true  value 122-123 

RULES, 

for  construction  of  charter 77-78 


.  s. 

SEAL, 

aflixed  to  certificate  of  incorporation 86 

power  to  adopt  and  alter 32 

use  of,  by  incorporators 79 

SECIlE'rARY   OF   STATE, 

effect  of  certificate  of  due  incorporation 21-28,  88-92 

mandamus  against 84 

SERVICE   OF   PROCESS, 

appointment  of  agent  upon  whom  process  may  be  served    .     .     .     180 

SERVICES, 

payment  of  stock  in 49,  120 

SIGNING   ARTICLES    OF   INCORPORATION 79 

SIMILARITY, 

of  corporate  name  forbidden 14,  31 

SOLE   STOCKHOLDERS 13-14 

SPECIAL    ACT, 

incorporation  by,  forbidden 9-10 

SPECIAL   LIABILITY 173-174 

SPECIAL   REQUIREMENTS, 

as  to  articles  of  incorporation 81-82 

SPECULATIVE   VALUE   RULE 125-137 

STATE, 

police  power  of lGO-164 

powers  of,  in  creation  of  corporations 10,  85 

right  of,  to  attack  corporate  existence 90-92 

repeal  charters 153-154 

STATEMENT, 

of  good  faith  rule 123-125 

of  true  value  rule 122-123 

of  speculative  value  rule 125-137 

STATE   OFFICERS, 

mandamus  against O"* 

STATE   OFFICIALS, 

appraisal  of  property  by 139-141 

power  to  accept  or  reject  articles 82-84 

STATUTES  OF  MORTMAIN 32 

608 


GENERAL   INDEX. 

STATUTORY   LIABILITY, 

of  directors 174-176 

of  stockholders 169-174 

STATUTORY   LIMIT, 

of  indebtedness 74-75 

STOCK, 

amount  paid  in 72-73 

with  whieh  corporation  may  begin  business 73 

assessments lOS-109 

capital 67-69 

extinguishment  of 37 

full  paid 142-143 

issuance  of,  in  exchange  for  services  or  property    .     .      49-50,  112-137 

legislative  authority  necessary  to  issuance  of 68 

non-assessable 141-142 

par  value  of 70 

power  of  corporation  to  purchase  its  own 36-37 

stock  in  other  corporations  .      37-38 

power  to  decrease 41 

forfeit 48-49 

increase 41 

statement  in  articles  as  to  manner  in  which  same  shall  be  paid  for      69 

STOCK   CERTIFICATES 110-111 

STOCKHOLDERS, 

double  liability 173 

exemption  in  articles  from  personal  liability 75 

liability  for  debts  of  the  corporation 169-174 

labor  claims 173-174 

unpaid  stock  subscriptions 169-172 

liability  of  pledgees 172 

transferees 172 

transferors 172 

trustees 172 

special  liability 173-174 

STOCK    NOTES 121 

STOCK   SUBSCRIPTIONS, 

affidavit  as  to 81 

amount  of 70-71 

SUBORDINATE   OFFICERS   AND   A(;ENrS, 

appointment  of 1((7 

SUBSCRIPTIONS   FOR  STOCK, 

afTulavit  as  to 80 

SUBSEQUENT   CONDITIONS 03.  lOO 

SUBSIDIARY   COMPANIES, 

power  to  organize 37 

SUE, 

[)C)wer  to 34 

SURPLUSAGE 65 

39  GOD 


GENERAL   INDEX. 

SURREXDER   OF   CHARTER, 

before  organization       58,  155 

SUSPENSION   OF   BUSINESS 15G,  158-159 

T. 

TAX. 

orgaiiizatiou 84-85 

TAXATION, 

of  domestic  corporations 177-178 

TAXING    POWER, 

of  the  State  as  limited  by  the  inter-state  commerce  clause  of  the 
Federal  Constitution 202-210 

TENDENCY, 

in  favor  of  incorporation   .     .     .     o 9 

TENURE   OF   OFFICE 102,  107 

TERMINATION   OF   CHARTER 154-155 

TIME, 

of  corporate  existence 73-74 

within  which  coi-porations  must  organize   and  commence  busi- 
ness      109-110 

TRADE   MARK, 

name  of  corporatfon  protected  as  a 15 

TRADE   NA:\IE, 

corporation  protected  in  equity  in  use  of  its  name 15 

TRAMP   CORPORATIONS 185 

TRANSFER, 

of  entire  corporate  assets 51-52 

of  shares 171-172 

TRANSFEREES, 

liability  of,  for  unpaid  stock  subscriptions 171-172 

TRANSFERORS, 

liability  of,  for  unpaid  stock  subscriptions 171-172 

TREASURY   STOCK 121-122 

TRUE  VALUE  RULE, 

statement  of 122-123 

TRUST, 

power  to  acquire  and  hold  property  in 33 

voting 103, 105 

TRUSTEE, 

power  of  corporation  to  act  as 33 

TRUSTEES, 

liability  of,  for  unpaid  stock  subscriptions 172 

TRUST   FUND   DOCTRINE 114 

TRUST   LEGISLATION 167-168 

GIO 


GENERAL   INDEX. 

u. 

ULTRA    VIRES, 

doctrine  of 61-65 

UNIFORM   TAXATION '     .'     .       85 

UNLAWFUL   CORPORATIONS 10 

UNPAID   STOCK 142-145 

L/SliiR CQ 

V. 

VACANCIES, 

in  board  of  directors,  power  to  fill  .     « 102 

VALUATION, 

of  property  taken  in  exchange  for  stock 137-141 

VALUE,  PAR 70,110-111 

VERIFIED   REPORTS 174 

VIOLATION   OF   EXPRESS   STATUTES, 

forfeiture  of  charter  for 160 

VISITORIAL   POWERS, 

of  State  legislatures  relative  to  corporations 1G4 

VOLUNTARY  DISSOLUTION 52-53,  155-156 

VOLUNTARY   SURRENDER  OF   CHARTER .'    .       58 

VOTING, 

cumulative  49 

^y  Proiy 49,  104-105 

trusts 103,  105 

w. 

WHAT  CONSTITUTES  DOING   BUSINESS, 

on  the  part  of  foreign  corporations 190-105 

WINDING    LP.     (See  Dihsolutio.v  and  Forfeiture.) 

WORDS  AND  PHRASES {^e  passim.) 


Oil 


INDEX  TO  SYNOPSIS-DIGEST  OF  THE  INCOR- 
PORATION ACTS  OF  THE  SEVERAL  STATES, 
TERRITORIES,   ETC. 


[The  references  are  to  pages.] 


Alabama 

Alaska  . 

Arizona 

Arkansas    . 

California 

Colorado   . 

connkcticut 

Delaware  . 

District  ok  Coltmbia 

Dominion  of  Canada 

Florida 

(Jf.oroia 

Hawaii 

1i»ah(> 


ERRITORY 


Illinois 
Indiana 
Indian  'J' 
Iowa  . 
Kansas 
Kentucky  . 

Ll)t;iSIANA    .       . 

Maine     .     . 
Manitoba   .     . 
Maryland  .     . 
Massachusetts 

MlCIIKJAN 

Minnesota  . 
MiSiiiMSirri  .     . 


211-217 
217-220 
220-223 
223-229 
229-234 
234-239 
239-243 
243-247 
247-250 
396-397 
250-254 
254-257 
398-399 
257-2G0 
260-2<J4 
264-209 
.  .  209 
269-273 
273-277 
277-280 
2H()-2.S3 
283-287 
.  .  397 
287-2H9 
289-295 
29.V299 
299-301 
304-300 


Missouri     .     . 
Montana    . 
Nebraska   .     . 
Nevada  .     .     . 
New  Hampshire 
New  Jersey    . 
New  Mexico  . 
New  York .     . 
North  Carolina 
North  Dakota 
Ohio  .... 
Oklahoma  . 
Oreoon  .     .     . 
Pennsylvania 
PiiiLirriNEs 
Porto  Ric(» 
Rhode  Island 
South  Carolina 
South  Dakota 
'I'ennessee  .     . 
Texas     .     .     . 
Utah 

Vermont     . 
Viiujinia 
Washington    . 
West  Virginia 

WlSCf)NSIN    . 

Wyoming     .     • 


300-310 
310-313 
313-317 
317-320 
320-323 
323-328 
328-331 
331-330 
336-339 
339-342 
342-345 
345-348 
348-351 
351-355 
399-400 
400-401 
350-3r)8 
358-361 
361-305 
3t>5-3r)S 
30.S-371 
371-374 
375-377 
377-3S2 
3S2-3.S5 
385-3.S9 
389-393 
393-390 


r.ir, 


INDEX    TO   FORMS  AND   PRECEDENTS. 


[The  references  are  to  pages.] 


A. 

ACKNOWLEDGMENTS, 

of  articles  of  incorporation  for  the  several  States  and  Terri- 
tories         443-508 

AFFIDAVIT, 

as  to  mailing  notices  of  stockholders'  meeting 541 

AGENT, 

appointment  of 529-531 

AGREEMENT, 

for   sale   of   real  or   personal   property  in   exchange  for   capital 
stock       525-526 

placing  shares  of  stock  in  trust  for  corporations 520 

to  take  stork  in  corporation  to  be  formed 524 

to  underwriters 54;}-544 

to  voting  trust 545-540 

ALABAMA, 

form  for  certificate  of  incorporation  in 443 

ALASKA, 

form  for  articles  of  incorporation  in 444-445 

APPOINTMENT, 

ofa-ont 529-5:U 

ARIZONA, 

form  for  articles  of  incorporation  in  (skt-lctoii  form)       .     .        445-440 

sU-'amboat  and  traiisport.ilion  cIijuIit  rt(iiii>Iit.-      ....        5'!2-5()3 

ARKANSAS, 

form  for  articlf's  of  a_'t' <iii'iii   iimI  iiicoi  jM.i.iii.Mi    ....        44<i-448 

ARTICLES     OF    INCORPORATION.    (Soc   CEnTiKicATKa    of 
Incoiu'okatmn.) 

ASSESSMENT, 

of  stock r>7n 

ASSIGNMENT, 

of  Hubscription 525 

AUDITING  COMPANY, 

charter  of  (under  N«w  Jorsoy  laws) 650-552 

615 


INDEX   TO    FORMS    AND   PRECEDENTS. 

B. 

BANK, 

certificate  to  be  filed  with,  on  opening  account 517 

BOM). 

form  of       532-533 

trust  deed  and  bond 531-511 

BONDS, 

directors  authorized  to  issue 510 

underwriters'  agreement  for       543-544 

BROKERAGE  COMPANY, 

charter  of  (under  New  York  laws) 552-554 

BUSINESS, 

clauses  regulating  business 510-511 

classification  of  directors 510 

holding  stockholders' meetings  without  domiciliary  State    .     ,     .     511 
power  of  directors  to  dispose,of  all  corporate  property     .     .     .     .     510 

power  to  make,  alter,  amend,  or  repeal  by-laws 510 

power  of  directors  to  issue  bonds 510 

appoint  executive  committee 510 

removal  of  officers  and  directors 511 

lien  on  stock  for  indebtedness  of  company 511 

examination  of  books  by  stockholders 511 

cumulative  voting 511 

preferred  stock  clause,  short  form        511 

long  form 511-512 

transaction  of  business  without  domiciliary  State 509 

BY-LAWS, 

form  of 519-524 

directors  authorized  to  make,  alter,  and  repeal 510 

C. 

CALIFORNIA, 

form  for  articles  of  incorporation  in 448-449 

CAPITAL  CLAUSES, 
from  charters  of 

Auditing  Co 551 

Brokerage  Co 553-554 

Coal  Co. 562 

Mining  Co 561 

Oil  Co 559 

Steamboat  and  Transportation  Co 562 

Trust  and  Investment  Co 551 

Typewriter  Co 567 

United  States  Steel  Corporation        547-548 

Vehicle  Motor  Co 566 

preferred  stock 511-512,  547-548,  553-554 

CERTIFICATE  OF  AUTHORIZATION, 

to  countersign  certificates  of  stock 542 

CERTIFICATE  OF  SECRETARY, 

to  passage  of  a  resolution       529 

616 


INDEX   TO    FORMS   AND   PRECEDENTS. 

CERTIFICATES  OF  IXCORPORATIOX, 

skeleton  forms  for  use  in  all  States  and  Territories     .     .     .  4-13-50S 

of  Auditing-  Co '   .     .  550-552 

of  Brokerage  Co 552-554 

of  Coal  Co 561-562 

of  Mining  Co 560-501 

of  Oil  Co 558-559 

of  Steamboat  and  Transportation  Co 502-565 

of  Trust  and  Investment  Co 555-557 

of  Typewriter  Co 566-567 

of  United  States  Steel  Corporation       546-550 

of  Vehicle  Motor  Co 565-566 

CHARTER.     (See  Cektificates  of  Ixcorporatiox.) 

COAL  COMPANY, 

form  for  charter  of  (under  West  Virginia  laws)     ....  501-562 

COLORADO, 

form  for  certificate  of  incorporation 449-450 

COMPANIES, 

objects  for  specific.     (See  Special  Index,  pages  403-404  ) 

CONNECTICUT, 

form  for  certificate  of  incorporation  (skeleton  form)    .     .     .  450-451 

Typewiiter  Co.  charter  complete 566-567 

CUMULATIVE  VOTING 511 

D. 
DEED  OF  TRUST, 

.securing  is.suc  of  bonds 531-511 

DELAWARE, 

form  fur  certificate  of  incorporation  (skeleton  form)        .     .        452-153 
Trust  and  Investment  Co.  charter  complete 555-557 

DIRECTORS, 

ininut'S  of  first  meeting  of 516-51S 

classification  of ;",10 

powers  of         510-511,518-550,551-552,554,557,564 

power  to  adopt  and  alter  by-laws         niO 

power  to  dispose  of  all  corporatr  prupfrty 510 

power  to  appoint  executive  commith-c r,lO 

power  to  cotitract  specific  d(d)t,  resolution  granting  power  to      52S-529 

power  t(>  i.ssne  bonds 510 

removal  of 611 

waivf-r  of  noti<'f' of  first  meeting  of 51H 

DLSTRICT  OK  COF.UMBLA. 

form  for  wrtificaU- of  incorporation  (skeleton  form)    .     .     .       153-151 
Vohiclo  Motor  Co.  charter  compIut<3 565-566 

E. 

EXECUTIVE  COMMITTEE. 

directors  nuthorizcil  to  ii|ipoinl        510 


INDEX   TO    FORMS    AND    PRECEDENTS. 


F. 

FLORIDA, 

form  for  notice  of  incorporation  and  charter  of  corporation  in    454-455 

FOREIGN  CORPORATIONS, 

appointment  of  agent  by 531 


G. 

GENERAL  OBJECT  CLAUSES        509-510 

acquiring  an  established  business 509 

acquisition  of  company's  own  stock 509-510 

authorizing  the  issuance  of  promotion  stock 510 

bond  clause 510 

conducting  business  in  other  States 509 

holding  stock  in  other  corporations 509 

patent  and  trademark  clause 509 

purchasing  clause 509 

trading  clause ;     .     .  509 

GEORGIA, 

form  of  application  for  charter        456 


I. 

IDAHO, 

form  for  articles  of  incorporation 456-457 

ILLINOIS, 

form  for  statement  of  incorporation 457-459 

INCORPORATORS'  MEETING, 

minutes  of 512-516 

proxy  for 515,  524 

waiver  of  notice  of 515,  524 

INDEX, 

special  object  clauses 403-404 

INDIANA, 

form  for  articles  of  incorporation 459-460 

INDIAN  TERRITORY, 

form  for  articles  of  agreement  and  incorporation  ....  460-461 
INSPECTORS', 

oaths  and  report 516,  528 

IOWA, 

form  for  articles  of  incorporation 462-465 


K. 

KANSAS, 

form  for  application  for  charter  and  form  of  charter     .     .     .     465-466 
KENTUCKY, 

form  for  articles  of  incorporation 467 

618 


INDEX  TO    FORMS   AND    PRECEDENTS. 

L. 

LETTER, 

offering  to  transfer  property  in  exchange  for  stock  .....  525 
LIEX, 

on  stock  for  indebtedness  due  company 511 

LOUISIANA, 

form  for  certificate  of  incorporation 407-469 

M. 

MAINE, 

form  for  articles  of  association  and  certificate  of  organization  470-473 
MARYLAND, 

form  for  certificate  of  incorporation       473_474 

MASSACHUSETTS, 

form  for  articles  of  association  and  certificate  of  organization  474-476 
LLEETIXGS, 

minutes  of  first  directors' 516-518 

waiver  of  notice  of  first  directors'  meeting 51S 

minutes  of  incorporators'  meeting 512-516 

proxy  for  incorporators'  meeting 515 

waiver  of  notice  of  incorporators'  meeting 515 

MICHIGAN, 

form  for  articles  of  association 476-478 

MINING  COMPANY, 

form  for  charter  of  (under  Nevada  laws) 560-561 

MINNESOTA, 

form  for  articles  of  incorporation 478-479 

MINUTES, 

of  first  meeting  of  directors 510-518 

of  incorporators'  meeting 512-516 

MISSISSIPPI, 

form  for  charter ■170-'180 

MISSOURI, 

form  for  agreement  of  incorporation 480-481 

MONTANA, 

form  for  articles  of  incorporation 481-4H2 

mortga(;e, 

ilirfctors  authorizid  to  create 510 

Bccunng  issue  of  bonds 5;J1  511 

N. 
NEBRASKA, 

form  for  articles  of  incoq»oration 4H2-484 

NEVADA, 

form  for  articles  of  iiicorfMjration 4Hl-'185 

NEW  IIAMPSIIIitE. 

form  for  articles  of  agreement is.") 

<ii:t 


INDEX   TO    FORMS    AND    PRECEDENTS. 

NEW  JERSEY, 

form  for  certificate  of  incorporation  (skeleton  form)    .     .     .     485-487 

Auditing  Co.  charter  complete 550-552 

Uuited  States  Steel  Corporation  charter 546-550 

NEW  MEXICO, 

form  for  articles  of  incorporation 487-488 

NEW  YORK, 

form  for  certificate  of  incorporation  (skeleton  form)    .     .     .     488-489 
Brokerage  Co.  charter  complete 552-554 

NORTH  CAROLINA, 

form  for  certificate  of  incorporation 489-490 

NORTH  DAKOTA, 

form  for  articles  of  incorporation 490-491 

NOTICE, 

waiver  of  notice  of  directors'  meeting 518 

incorporators'  meeting 515 

O. 
OATH, 

of  inspectors 516 

OBJECT  CLAUSES.     (See  General  Object  Clauses)  .     .     .     509-510 
(See  Specific  Object  Clauses)    .     .     .     403-442 
OFFICERS, 

removal  of -- 511 

OHIO, 

form  for  articles  of  incorporation 491 

OIL  COMPANY, 

charter  of  (under  South  Dakota  laws) 558-559 

OKLAHOMA, 

form  for  articles  of  incorporation       492 

OREGON, 

form  for  articles  of  incorporation 493 

ORGANIZATION, 

subscription  agreement  before 523-524 

ORGANIZATION  MEETING, 

minutes  of 512-516 

ORGANIZING, 

the  corporation 569-570 

P. 

PATENT  RIGHTS 509 

PENNSYLVANIA, 

form  for  notice  of  application  for  charter,  etc 493-494 

PREFERRED  STOCK  CLAUSE, 

long  form 511-512,  547-548,  553-554 

short  clause       511 

PRINCIPAL  OFFICE, 

without  the  state 511 

G20 


INDEX   TO    FORMS    AND    PRECEDENTS. 

PROPERTY, 

directors  empowered  to  sell 510 

PROXY, 

for  incorporators'  meeting 515,_524: 

and  waiver  of  notice  combined 5'2i 

R. 

REGISTRATION  OF  STOCK, 

form  for 542 

REGULATION  OF  BUSINESS, 

clauses  for.     (See  Busixes^s  Clauses.) 
REMOVAL, 

of  otBcers 5H 

of  directors 511 

RHODE  ISLAND, 

form  for  articles  of  association 494-495 

s. 

SOUTH  CAROLINA, 

form  for  declaration  and  petition  for  charter,  etc 495-496 

SOUTH  DAKOTA, 

form  for  articles  of  incorporation  (skeleton  form)    ....     490-497 
Oil  Co.  charter  complete 558-559 

SPECIFIC  OBJECT  CLAUSES.     (See  Special  Index,  page  403.) 

STOCK, 

authority  for  purchase  of  company's  own 509 

certificate  of  common 527 

preferred 528 

clauses  in  charter  for  preferred     ....  511,  512,  547,  548,  553,  554 
liolding  stock  in  other  corporations 509 

STOCKHOLDERS, 

organization  meeting  of,  minutes  of 512-515 

proxy  for  meeting  of 515,  504 

SUBSCRIPTION, 

agreement  before  organization 524 

traiisft-r  of 510 

SUGGESTIONS, 

relative  to  the  preparation  of  charters,  etc 507-570 

T. 

TABLE  OF  ANNUAL  FRANCHISE  TAXES 570 

TABLE  OF  OUGAMZA'riON  TAXES 571 

TABULATED  QUESTIONS  AND  ANSWERS 573-587 

TENNESSEE, 

form  for  charter  of  incorporation 4;i7-499 

TEXAS, 

form  for  charter 499-500 

G21 


IKDILX   TO    FORMS   AND   PRECEDENTS. 

TRANSFER  OF  SUBSCRIPTION 51G,  518 

TRUST  AND, INVESTMENT  CO., 

chaitor  of  (under  Delaware  laws) 555-557 

TRUST  DEED, 

securing  issue  of  bond  (form  for) 531-541 

TYPEWRITER  CO., 

charter  of  (under  Connecticut  laws) 566-567 

U; 

UNDERWRITERS'  AGREEMENT 543-544 

UNITED  STATES  STEEL  CORPORATION, 

charter  of 546-550 

UTAH, 

form  for  articles  of  incorporation 500-502 


V. 

VEHICLE  MOTOR  CO., 

charter  of  (under  District  of  Columbia  laws) -565-566 

VERMONT, 

form  for  articles  of  association 502 

VIRGINIA, 

form  for  certificate  of  incorporation,  etc 503-504 

VOTING  TRUST  AGREEMENT 545-546 


W. 

WAIVER, 

of  notice  of  assessment 529 

first  meeting  of  directors 518 

organization  meeting 515 

WASHINGTON, 

form  for  articles  of  incorporation 504-505 

WEST  VIRGINIA, 

form  for  certificate  of  incorporation 505-506 

WISCONSIN, 

form  for  articles  of  organization  .     .    ' 506-507 

WYOMING, 

form  for  certificate  of  incorporation 507-508 


622 


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